AHMEDNAGAR FORGINGS LIMITED

ANNUAL REPORT 2005 - 2006

AHMEDNAGAR FORCINGS LIMITED

DIRECTORS' REPORT
TO

The Members, AHMEDNAGAR FORCINGS LIMITED Your Directors have pleasure in presenting the Twenty Ninth Annual Report and the Audited Accounts of the Company for the year ended 30th June 2006. FINANCIAL INFORMATION (Rs. in Lacs) PARTICULARS Sales/ Income from operations Expenditures Gross Profit Deprecation Profit Before Tax Provisions for Taxation Profit after Tax Provision for Deferred Tax Profit after Deferred Tax Add. Accumulated Profit Balance available for appropriation APPROPRIATIONS Transfer to General Reserve Proposed dividend on equity capital Provision for tax on dividend Surplus carried to Balance Sheet DIVIDEND Considering the encouraging performance of the company, your Directors are pleased to recommend a dividend of Rs.2/- per equity share of Rs.10/- each for the year ended 30th June 2006, subject to the approval of shareholders in the ensuing Annual General Meeting. INCREASE IN AUTHORISED CAPITAL During the year under review, Your Company has increased its Authorised Share Capital from Rs. 25 Crores to Rs. 35 Crores. Accordingly, the Authorised Capital of the Company is Rs. 35 Crores divided into 3,50,00,000 Equity Shares of Rs.10/- each. PREFERENTIAL ISSUE During the year under review, the Company has issued 92,20,000 equity shares of Rs.10/- each at a premium of Rs.151/- each aggregating to Rs. 148,44,20,000/- to the promoters of the Company, Flls, Bodies Corporate and individuals on preferential basis. PERFORMANCE During the year under review, the company has recorded a turnover of Rs. 37542.77 lacs with a net profit after tax of Rs. 4090.21 lacs . Cash profit has been recorded at Rs. 5125.74 lacs. The reserve position of the Company has reached at a level of Rs. 22436.43 lacs. Year ended 30th June 2006 37542.77 30758.63 6784.14 1035.52 5748.62 497.17 5251.45 1161.24 4090.21 363.32 4453.53 3500.00 664.40
93.18

Year ended 30th June 2005 20581.86 17169.27 3412.59 417.55 2995.04 251.99 2743.05 655.66 2087.39 1775.93 3863.32 3500.00
0.00 0.00

195.95

363.32

AHMEDNAGAR FORCINGS LIMITED

EXPANSION PLAN

Considering the huge demand prospects, your Company is trebling its capacity from 46000 tpa. In financial year 2006, the Company has increased its capacity to 86000 tpa. Currently, your company plans to further increase the capacity to 1,30,000 tpa by December 2006. Another 35000 tpa would be added by June 2007 taking the total capacity to 165,000tpa. The Company is also increasing its machining capacity from the current level of 10,000 tpa to 25,000 tpa by next year.
DIRECTORS

Mr. B. Lugani retires at the ensuing Annual General meeting and being eligible offers himself for re-appointment. Mr. Gautam Malhotra who was appointed as additional Director vacates his office at the ensuing Annual General Meeting. The Company has received representations from the members of the Company along with deposits as required under the provisions of Section 257 of the Companies Act, 1956 expressing their intention to propose the appointment of Mr Gautam Malhotra as Director of the Company.
AUDITORS

M/s Manoj Mohan & Associates, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. They have confirmed their eligibility to act as auditors of the Company under Section 224(1B) of the Companies Act, 1956, if appointed at the ensuing Annual General Meeting.
FIXED DEPOSITS

During the year under review, the Company continued to accept deposits under section 58 - A of the Companies Act, 1956.
DE-MATERIALISATION OF SHARES

The Company's equity shares are available for de - materialization on both the depositories viz., NSDL & CDSL. Shareholders may be aware that SEBI has made trading in your company's shares mandatory, in de - materialized form. As on 30th June 2006, 2,30,14,537 representing 69.28% of your Company's Equity shares capital has been dematerialised.
LISTING AT STOCK EXCHANGE

The shares of company are listed on The Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. The company has paid the annual listing fee to the Stock exchanges for the year 2006 - 2007.
STATUTORY INFORMATION

Particular of Employees under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 may be taken as Nil. Statutory details of Energy Conservation and Technology Absorption, R & D activities and Foreign Exchange Earning and Outgo, as required under Section 217(1) (e) of the Companies Act, 1956 and the rules prescribed there under i.e. the Companies (Disclosure of Particulars in Report of Board of Directors) Rules, 1988 are given in the Annexure and form part of this Report (Please refer Annexure- I) Certificate received from the Auditors of the Company regarding Compliance of conditions of Corporate Governance, as required under clause 49 VII of the Listing Agreement, is Annexed to and forms part of this report. (Please refer Annexure - II).
As required under clause 49 (IV) F of the listing Agreement, Management Discussion and Analysis Report is Annexed and forms part of this report (Please refer Annexure - III).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217I2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000 with respect to Directors' Responsibility Statement, it is hereby confirmed : That in the preparation of the annual accounts, the applicable accounting standards have been followed;

AHMEDNAGAR FORCINGS LIMITED

That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
That the Directors have prepared the Annual Accounts on a going concern basis.

INDUSTRIAL RELATIONS

During the year under review, the relations between the Management and the workmen were highly cordial.
INVESTOR RELATIONS

Your Company always endeavors to keep the time of response to shareholders' requests/grievances at the minimum. Priority is accorded to address all the issues raised by the shareholders and provide them a satisfactory reply at the earliest possible time. The shareholders' and investors' Grievances committee of the Board meets periodically and reviews the status of the redressal of investors' grievances. The shares of the company continue to be traded in Electronic Form and the De-materialisation arrangement exists with both the depositories, viz., National Securities Depository Limited and Central Depository Services (India) Limited. As on date, 2,30,14,537 representing 69.28% Equity Shares have been dematerialized.
EMPLOYEE WELFARE

Your Company demonstrated that it is a caring organization by continuing to devise and implement several welfare measures for the employees and their families. Employee welfare programmes and schemes were implemented with utmost zeal and they were constantly reviewed and improvements were made wherever necessary.
ACKNOWLEDGEMENT

Your Directors would like to place on record their appreciation for the contribution made by the employees at all levels, who, through their competence, hard work, solidarity, co-operation, support and commitment have enabled the Company to achieve its strong growth. Your Directors acknowledge with thanks the continued support and valuable co-operation extended by the business constituents, investors, vendors, bankers and shareholders of the Company. Your Directors also take this opportunity to offer their sincere thanks to the financial Institutions, Banks and other Government Agencies for their continued support and assistance.
BY ORDER OF THE BOARD FOR AHMEDNAGAR FORCINGS LIMITED

Place : New Delhi Date : 30th October 2006

(ARVIND DHAM) CHAIRMAN

AHMEDNAGAR FORCINGS LIMITED

ANNEXURE TO THE DIRECTORS' REPORT 2005-2006

ANNEXURE - I INFORMATION REQUIRED UNDER SECTION 2170(6)) OF THE COMPANIES ACT, 1956.

I.

Research & Development (R & D) a) Specific area in which ( R&D) Carried out by the Company b) Benefits derived as a result

II.

Future plan of action in mafg. Process & operation. Technology Absorption: a) Efforts in brief towards technology absorption b) Benefits derived as a result of the above efforts e.g.product c)

c)

Product design & development. Process design & improvement for various products. Reduction in process time. ii) Higher productivity. iii) Consistent quality. To achieve better yield by way of cost reduction through higher level of automation.
The Company is in the process of implementing technical changes & process designs. i) Cost reduction to savings in Raw Material dies & Moulds & Power & Fuel. ii) Increased productivity & better quality. NA

i) ii) i)

In case of imported technology (import during the last 6 years reckoned from beginning of the financial year) III. Foreign Exchange Earnings & Outgo: Activities relating to exports; initiative taken to increase exports; development of new export markets for product and services and export plans. The parent Company has strategically acquired units in UK, USA and Germany to increase its share of business in the international market. (Rs. In Lacs) Particulars
Foreign Exchange Used
IV. CONSERVATION OF ENERGY:

Current Year
1211.44

Previous Year
434.84

Current Year 1. Electricity Purchased :

Previous Year
189.86
768.66 4.05 6,405.00 1015.05 15.85 101,505.00

Purchased Units (in Lacs)

Total Amount (Rs. in Lacs) Average Rate Per Unit - Rs.
2. Furnance Oil / L.D.O. Quantity - K. Liters

197.23

832.74
4.22 5,962.00 1272.67 21.35 127,267.01

Total Cost (Rs. in Lacs)

Average Rate Per Liter / Rs. Total Amt. (Rs)

B)

Consumption per unit of Production

Production - Tonnes
Electricity - Units / Tonne
37,924.00 20,614.00 921.02 310.71

520.07
157.21

Furnance Oil - Ltrs / Tonne

AHMEDNAGAR FORCINGS LIMITED

CORPORATE GOVERNANCE REPORT

I. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

Ahmednagar Forging Limited has implemented and continuously strives to improve the Corporate Governance practices, which attempt to meet stakeholders' expectations and Company's societal commitments through high standards of ethics, sound business decisions, prudent financial management practices, professionalism in decision making and conducting business and finally with strict compliance with regulatory guidelines on governance.
II BOARD OF DIRECTORS

The Business of the Company is managed by the Board of Directors. The Board formulates the strategy, regularly reviews the performance of the Company and ensures that the previously agreed objectives are met on a consistent basis. The Managing Director along with a team of professionals, manages the day to day operations of the Company. The Non-Executive Directors' are eminent professionals, drawn from amongst persons with experience in business, industry and finance. The Board of Directors has the ideal composition with more than half the Directors being nonexecutive Directors. Since the Company has an Non Executive Chairman, the Board's composition meets the stipulated requirement of at least one third of the Board comprising independent Directors, who have no professional and/or business relationship with the Company.
A. Composition of Directorships

The constitution of the Board as on June 30, 2006:-

Non Executive Chairman Mr. Arvind Dham, Chairman Promoter Director

Mr. Arvind Dham

Executive Director
Mr. A. K. Syal

Non Executive Director

Mr. D. S. Malik

Non Executive and Independent Director

Mr. B. Lugani Mr. S. E. Krishnan
Mr. Gautam Malhotra

B.

Pecuniary Relationship

There is no pecuniary relationship or transaction of the non-executive Directors vis-a-vis the Company. C. Attendance Record of Board Meetings

During the year under review, Nine Board meeting were held on 10.08.05,14.10.05, 28.10.05, 09.01.06, 27.01.06, 31.01.2006, 24.02.06, 28.04.06 and 12.06.06. The Board members are given appropriate documents and information in advance of each Board meeting.

The attendance record of all the Directors on the Board is as under:Director

Mr. Arvind Dham

No. of Board Meetings attended

6 7 4 8 5 _

Attendance at last AGM

NO YES NO YES YES NO

Attendance at last EGM

NO YES NO NO YES NO

Mr. D. S. Malik Mr. S. E. Krishnan

Mr. B. Lugani
Mr. A. K. Syal

Mr. Gautam Malhotra

AHMEDNAGAR FORCINGS LIMITED

D.

Directors of the company having directorship in other Companies, Membership/Chairmanship in committees (as prescribed under Corporate Governance) across all Companies, in which they are directors.

Name of Director

Category of Directorship

No. of other directorships Held in Other Public Companies*

8 1
7

No. of Membership in other companies committees ** Member Chairman

3 2 3 4 1 1 1

Mr. Arvind Dham

Non Executive - Chairman

Mr. A.K. Syal Mr. D.S. Malik Mr. S.E. Krishnan Mr. B. Lugani

Executive - Managing Director Non Executive Independent & Non Executive Independent & Non Executive Independent & Non Executive

2 2

Mr. Gautam Malhotra

Mr. Arvind Dham, Non Executive Chairman of the Company is Chairman and Managing Director of the Holding Company, Amtek Auto Limited and Mr. D.S. Mailk is Joint Managing Director and Mr. B. Lugani is director of Amtek Auto Limited.

* This excludes directorship held in Private Companies, Foreign Companies and Companies formed under section 25 of the Companies Act, 1956

** The Committee of Directors include Audit Committee, Shareholders/Investors Grievance Committee and Remuneration Committee of Directors only. This does not include Memberships/Chairmanship in committees of Private Limited companies.
III. BOARD PROCEDURES

The members of the Board have been provided with the requisite information in the listing agreement well before the Board Meeting and the same was dealt with appropriately. All the Directors who are in various committees are within the permissible limit of the listing agreement and none of the Directors are disqualified for appointment as director under any provision of the Companies Act, 1956.
IV. AUDIT COMMITTEE

The Board of the Company has constituted Audit Committee, comprising of three directors. All the members of the committee viz. Mr. B. Lugani (Chairman), Mr. S.E.Krishnen and Mr. D.S.Malik are independent and non executives. The constitution of the Audit Committee meets the requirement of section 292A of the Companies Act, 1956. The power and role of the audit committee is as per the guidelines set out in the listing agreement and as prescribed under section 292A of the Companies Act, 1956. During the year, the committee met 5 times and the attendance of members at the meetings was as follows:
Name of Member
Mr. B. Lugani Mr. S. E. Krishnan Mr. D. S. Malik
V.

Status Chairman Director Director

No. of Meetings attended

5 5 5

REMUNERATION COMMITTEE

The Board has constituted a Remuneration Committee, comprising three non executive and independent directors viz. Mr. D.S. Malik (Chairman), Mr. Arvind Dham and Mr. B. Lugani. The committee has been constituted to review and approve the annual salaries, commission, service agreement and other employment conditions for the executive directors.
The remuneration policy is directed towards rewarding performance, based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice.

During the year under review, only one meeting of the Remuneration Committee was held, in which all the members were present.

AHMEDNAGAR FORCINGS LIMITED

(A)

The details of the remuneration to the Executive Director, provided as per accounts, for the year ended June 30, 2006 are given below:Salary* (Rs. in Lacs)
13.38

Managing Director A K Syal

Commission

Total (Rs. in Lacs)

13.38

Service Contract 5 years

Salary includes basic salary, perquisites and allowances, contribution to provident fund etc.

(B)

The details of the remuneration to the Non Executive Director, provided as per accounts, for the year ended June 30, 2005 are given below:Sitting Fee (Rs.)
NIL 1,04,000 28,000 92,000 NIL

Non Executive Director

Mr. Mr. Mr. Mr. Mr.
VI.

Commission
NIL NIL NIL NIL NIL

Total (Rs.)
NIL 1,04,000 28,000 92,000 NIL

Arvind Dham B. Lugani S. E. Krishnan D. S. Malik Gautam Malhotra

SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE

The Board has constituted a Shareholders'/Investors' Grievance Committee, comprising three non executive and independent directors viz. S.E. Krishnan (Chairman) , Mr. B. Lugani and Mr Arvind Dham. The committee has been constituted to specifically look into redressal of shareholders' and investors grievances such as transfer, dividend, dematerialisation related matters. During the year, the committee met five times. All the members were present in all the meetings held during the period. Total number of letters and complaints received and replied to the satisfaction of shareholders during the year under review was 26. As on 30th June 2006, there are Nil complaints pending with the Company.
The Company has also adopted code of Internal procedures and conduct for prevention of insider trading in the shares of the Company, pursuant to Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended. The Board has designated Company Secretary as the Compliance Officer for this purpose and has authorized this committee to monitor the compliances as required under the aforesaid Regulation
VII. SHARE TRANSFER COMMITTEE

The Board has delegated the powers to approve transfer of the Shares to Share Transfer Committee. The Committee comprising three non executive and independent directors viz. S.E.Krishnan (Chairman) , Mr.D. S. Malik and Mr, Arvind Dham, held 33 meeting during the year and approved transfer of the shares lodged with the company. All the committee members were present in all the meetings of the committee held during the year.

The committee deals with the following matters: Transfer/transmission of shares; Issue of new share certificates; Review of de - materialisation of shares. All other matters relating to shares.
VIII. GENERAL BODY MEETINGS

The last three Annual General Meetings were held as under:-

Year
2004-2005 2003-2004 2002-2003

Location
Gat No.614, At Village Kuruli Tal. Khed: Pune-410 501 Gat No.614, At Village Kuruli Tal. Khed: Pune-410 501 Gat No.614, At Village Kuruli Tal. Khed: Pune-410 501

Date
31.12.2005 30.10.2004 16.12.2003

Time
9.30 A.M. 9.30 A.M. 9.30 A.M.

AHMEDNAGAR FORCINGS LIMITED

No Special Resolution was passed at the last three Annual General Meeting. During the last year, no resolution was put through postal ballot.
DISCLOSURES

During the year under review, the Company did not have any materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc., that may have potential conflict with the interest of company at large. Whistle Blower Policy The company encourages an open door policy, where employees have access to the Head of the business / Function. In terms of Amtek Code of Conduct, any instance of non adherence to the Code / any other observed unethical behavior is to be brought to the attention of the immediate reporting authority, who is required to report the same to the Head of Corporate Human Resources. We hereby affirm that no personnel has been denied access to the Audit Committee. Also, Stock Exchanges or Securities & Exchange Board of India and any other Statutory authority did not imposed any penalty on any matter relating to capital markets during the last three years.
The Company has complied with all mandatory requirements of the revised Clause 49 of the Listing agreement, which came into effect from 1st January 2006. Further, the Company has also complied with the non-mandatory requirements relating to constitution of Remuneration Committee, Shareholder Rights and establishing the Whistleblower Policy.

IX. Means of Communication

Results for quarter ended 30th September, 2005, 31st December 2005, 31st March 2006 and 30th June 2006 have been published in English and Marathi newspapers (viz Indian Express and Loksata).
The company also uploads its financial results, shareholding pattern and other Information on the website of the company i.e. www.amtek.com

The Company uploads its financial results, shareholding pattern and other information on the EDIFAR Website maintained by the National Informatics Centre (NIC), which can be accessed through the Website of the Securities and Exchange Board of India (SEBI): http://www.sebi.gov.in A Management Discussion and Analysis report, which forms part of the Annual, Report is given by means of a separate annexure and is attached to the Directors' Report.
X. 1. GENERAL SHAREHOLDERS INFORMATION ANNUAL GENERAL MEETING

Date Day Time and Venue

December 30, 2006

Saturday 9.30 A.M,

Gat No.614,

At Village .- Kuruli, TaLKhed Distt.: Pune-410 501

FINANCIAL CALENDER:

(Tentative & Subject to change) Financial year . 2006-2007 First Quarter Results Second Quarter Results Third Quarter Results Fourth Quarter Results
3. DATES OF BOOK CLOSURE

July End End End End

1, 2006 to June 30, 2007 October, 2006 January, 2007 April, 2007 July, 2007

Wednesday, December 27 2006 to Saturday, December 30, 2006 (Both days inclusive)

AHMEDNAGAR FORCINGS LIMITED

4.

LISTING ON STOCK EXCHANGES :

The Shares of the Company are listed on The Bombay Stock Exchange Limited and The National Stock Exchange of India Limited. Listing fees for the year 2006-2007 has been paid to the Stock Exchanges within the stipulated time.
6. STOCK CODES :

BOMBAY STOCK EXCHANGE : NATIONAL STOCK EXCHANGE ISIN NO. for dematerialised shares 6a. STOCK MARKET DATA 30th June 2006.

Security Code 513335 Trading Symbol AHMEDFORGE INE 425A01011

Monthly high and low quotations of shares traded at National and Bombay Stock Exchanges for the year ended Month High
July, 2005 August, 2005 September, 2005 October, 2005 November, 2005

BSE Low
319.90 440.05 147.45 123.00 122.20 132.00 150.00 192.00 181.35 210.00 167.95 133.50

NSE

High
477.90 512.80 541.40 157.45 172.45 160.05 210.15 212.35 213.45 225.15 219.15 186.50

Low
332.15 452.70 150.10 126.15 128.45 132.70 152.35 196.20 183.35 212.05 172.50 141.30

December, 2005 January, 2006 February, 2006

March, 2006 April, 2006 May, 2006 June, 2006
7.

490.05 531.80 556.45 162.00 181.90 164.25 214.00 220.00 216.00 244.65 228.00 190.00

REGISTRARS AND TRANSFER AGENTS:

Beetal Financial & Computer Services Pvt. Ltd.

BEETAL HOUSE, 3rd Floor, 99, Madangir,

Behind Local Shopping Centre, New Delhi - 110 062

Phone No. : Oil - 29961281-3 Fax No. Oil - 29961284 SHARE TRANSFER SYSTEM

8.

The shares of the Company are traded in compulsory demat mode for all investors, therefore, the shares sent for transfers in physical form are first registered within a week (if in order and complete in all respect) and a demat option form is sent to the shareholders for exercising the option to receive the shares in demat form within 21 days. Then the share are confirmed to the respective accounts with depositories of National Securities Depository Limited (NSDL) and
Central Depository Services Limited (CDSL).
9. DISTRIBUTION OF SHAREHOLDING AS ON JUNE 30, 2006

No. of Shares held (Rs.10/- paid up)

Up to 5001 10001 20001 30001 40001 50001 100001
TOTAL : 5000 10000 20000 30000 40000 50000 100000 Above

Shareholders Number
6254 1409 233 108 28 22 60 126 8240

% of Total
75.90 17.10 2.83 1.31 0.34 0.27 0.73 1.53 100.000

Total (in Rs,)

9575570 9194770 3408660 2845660 1029550 1004680 4307760 300833350 332200000

% of Total Shareholding
2.88 2.77 1.03 0.86 0.31 0.30 1.30 90.56 100.00

10

AHMEDNAGAR FORCINGS LIMITED

10. The Shareholding Pattern as on June 30 2006 Category Code (A) Category of Shareholder Shareholding of Promoter and Promoter Group Total Number of Shareholders
Total Number of Shares
16666665

Percentage 50.17

(1)
(a) (b) (c) (d) (e)

Indian
Individual's/Hindu Undivided Family Central Government/State Government(s) Bodies Corporate Financial Institutions / Banks Any Other (specify) Sub - Total (A) 0)
0 0 1 0 0
0 0 16666665 0 0 16666665 0 0 50.17 0 0 50.17

1
0 0 0 0 0 1

(2)
|a) (b) (c) Id)

Foreign
Individuals (Non-Resident Individuals/Foreign Individuals) Bodies Corporate Institutions Any Other ) Specify) Sub - Total (A) (2)
0 0 0 0
0 16666665 0 0 0 0 0 50.17

Total Shareholding of Promoter and Promoter Group (A) = (A)(1MA)(2)

(B) Public Shareholding

(1)
(a) (b| (c) (d) (e) (f) (g) (h)

Institutions
Mutual Funds/UTI Financial Institutions / Banks Central Government / State Government(s) Venture Capital Funds Insurance Companies Foreign Institutional Investors Foreign Venture Capital Investors Any Other (Specify)
4 7 0 0 0 0 0 22 2129782 3800 0 0 0 6829769 0 0 8963351 6.41 0.01 0 0 0 20.56 0 0 26.98

Sub Total (B) (1)

(2)
la)

Non-Institutions
Bodies Corporate
423 2902020 8.74

(b) i. ii.
(c)

Individuals Individual Shareholders holding nominal Share Capital upto Rs. 1 lakh. Individual Shareholders holding nominal Share Capital in excess of Rs. 1 lakh
Any Other (specify) Sub-Total (B)(2) Total Public Shareholding (B) = (B)(l) + (B)(2)
TOTAL (A) + (B) ____ 7737 57 0 8217 8239 8240 2779811 1908153 0 7589984 16553335 33220000 8.37 5.74 0 22.85 49.8 100.00

(C)

Shares held by Custodians and against which Depository Receipts have been issued
GRAND TOTAL (A)+(B)+(Q 8240 33220000 100.00

11

AHMEDNAGAR FORCINGS LIMITED

11.

DEMATERIALISATION OF SHARES AND UQUIDITY :

The Dematting facility exists with both the NSDL and CDSL for the convenience of shareholders. As on 30th June 2006, 2,30,14,537 representing 69.28% of Subscribed Capital have been de-materialised.
12. OUTSTANDING GDRS / ADRS / WARRANTS / OR ANY CONVERTIBLE INSTRUMENTS, CONVERSION DATE AND LIKELY IMPACT ON EQUITY

The Company has not issued GDRS/ADRS/ WARRANTS or Any convertible instruments
13. PLANT LOCATION

Unit I - MIDC Area, Ahmednagar Unit II - Chakan, Dist. Pune Unit III - Kuruli, Dist. Pune Unit IV - Parwanoo, Dist. Solan (H.P.)

14.

INVESTORS CORRESPONDENCE MAY BE ADDRESSED TO:-

Mr. Prabhjot Singh Ahluwalia, Company Secretary Ahmednagar Forgings Limited, The Great Eastern Plaza, 604, 6th Floor, 1996 A, Airport Road, Near Gunjan Theatre, Yerwada, Pune - 411 006.
Tel. : 020 4031188

BY ORDER OF THE BOARD FOR AHMEDNAGAR FORGINGS LIMITED

Place: New Delhi Date : 30th October 2006

(ARVIND DHAM) CHAIRMAN

12

AHMEDNAGAR FORCINGS LIMITED

AUDITORS' REPORT ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To The Shareholders Ahmednagar Forgings Limited We have examined the compliance of conditions of corporate governance by Ahmednagar Forgings Limited, for the year ended on 30th June 2006 as stipulated in clause 49 of the Listing Agreement of the said Company with stock exchanges. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to best of our information and according to the explanations given to us, we certify that the Company has complied, in all material respects, with the conditions of corporate governance as stipulated in the above mentioned Listing Agreement.
We state that no investor grievances are pending for a period exceeding one month against the Company not the efficiency or effectiveness, with which the management has conducted the affairs of the Company.

For Manoj Mohan & Associates Chartered Accountants New Delhi 30th October 2006 (AA.K. Aggarwal) Partner

DECLARATION BY CEO UNDER CLAUSE 49 OF THE LISTING AGREEMENT

As required under Clause 49 of the Listing Agreement with Stock Exchanges, it is hereby confirmed that for the year ended 30th June 2006, the Directors' of Ahmednagar Forgings Limited have affirmed compliance with the Code of Conduct for Board Members as applicable to them and members of the senior management have affirmed compliance with the Employee Code of Conduct as applicable to them.
New Delhi 30th October 2006 A.K. Syal CEO & Managing Director

13

AHMEDNAGAR FORCINGS LIMITED

CEO AND CFO CERTIFICATION

We, A.K. Syal, CEO & Managing Director and IK. Laskar, DGM (Finance & Accounts), responsible for the finance function certify that:
a) We have reviewed the financial statements and cash flow statement for the year ended 30th June 2006 and to the best of our knowledge and belief:

i) ii)
b)

these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; these statements together, present a true and fair view of the Company's affairs and are in compliance with existing Accounting Standards, applicable laws and regulations.

To the best of our knowledge and belief, no transactions entered into by the Company, during the year ended 30th June 2006 are fraudulent, illegal or violative of the Company's code of conduct.

c)

We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of internal control systems of the Comapny pertaining to financial reporting. Deficiencies in the design or operation of such internal controls, if any, of which we are aware, have been disclosed to the Auditors and the Audit Committee and steps have been taken to rectify these deficiencies. i)
ii)

d)

There has not been any significant change in internal control over financial reporting during the year under reference;
There has not been any significant change in accounting policies during the year requiring disclosure in the notes to the financial statements; and

iii)

We are not aware of any instance during the year of significant fraud with involvement therein of the management or any employee having a significant role in the Company's internal control system over financial reporting.

New Delhi 30th October 2006

T.K. LASKAR D.G.M. (Finance & Accounts)

A.K. SYAL CEO & Managing Director

14

AHMEDNAGAR FORCINGS LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. THE FORGING INDUSTRY - AN OVERVIEW

Globally, the automotive industry size is estimated at $1.2 trillion and auto OEMs purchases auto components worth $450bn from global markets. Out of this market, the estimated auto forgings market size is around $50 bn. Forging have applications in various industries like auto, oil & gas, equipment manufacturing etc. The Indian Forging Industry size is estimated to be around Rs.120 billion. The forging market in India is fragmented at tower level. It is very difficult to estimate the total number of forging manufacturers in India, but in organised sector only, there are around 330 units operating in the market. Out of 330 units, only 9-10 units are considered to be large units and around 100 units are categorized as medium units. The other players are considered to be tiny units. The total installed capacity of Indian forging market is estimated to be around 900,000 AATPA.
Globally major auto giants like General Motors (GM) FORD, Hyundai, and Auto ancillaries like Delphi, Arvin Meritor, have been facing problems of lower margins mainly because saturated global auto markets and rising costs mainly labour costs and certain overheads.

Low cost producing countries like India, China, Brazil, Thailand have emerged as the solution to this problem. Global OEMs have started procuring auto components from the companies based in low cost producing countries. Indian auto component companies have proven their delivery capability and engineering skill sets to global OEMs. But still the number of Indian auto component companies, which exports their products to global OEMs, is very few. We believe that considering the labour cost differentiation, engineering skill sets and delivery capabilities of Indian auto component companies, this number is bound to improve at a faster rate over the next 2-3 year.

Auto component export have registered almost a three-fold growth in last 6 years. In FY01, Indian auto component exports were around $625 mn and it has touched the figure of $1.8bn in FY06. Out of total auto component exports made from India, forging exports are estimated to be around 15% or $270mn.
Going forward, we expect the Forging export market to grow at a CAGR of 35-40% for next 4-5 years. The Association of Component Manufacturers' Association of India (ACMA) expects auto component market in India to grow at a CAGR of 17% till 2014 to $40bn from $10bn in 2006. ACMA also expects the Indian auto component exports to grow at a CAGR of 34% till 2014 to $25bn from $1.8bn in 2006 and forging exports to grow at a CAGR of 38% till 2014 to $5bn from $270mn in 2006.
2. OPPORTUNITIES & CONSTRAINTS

OPPORTUNITIES

Consolidation benefits in domestic market opportunity Huge Outsourcing opportunity

Well established customer base for parent company Rising demand from domestic auto market
Less presence in large forging components Delay in implementation of expansion

CONSTRAINTS

3.

Slowdown in domestic auto market Inadequate testing and validating facilities for smaller forging companies

SEGMENT WISE PERFORMANCE

The company deals in only one segment i.e. automotive components. Therefore, it is not possible to give segment wise performance
4. FUTURE OUTLOOK

Your company, currently, exports to the USA and Europe markets. Apart from other customers AFL also supplies to its group companies like GWK, UK. We believe that going forward with the increase in business of GWK UK, AFL would also get more orders for supply of forging components. We estimate that about 30% of AFL's exports would be supplied to GWK in FY07E and FY08E. The other major customers of AFL include Fairfield Atlas, USA, Cummins, King Automotive Systems Ltd. Coventry, Letchworth, Zeiter Gmbh, Hennef etc. Recently AFL has won initial orders from GE Transportation

15

AHMEDNAGAR FORCINGS LIMITED

Systems, USA and Cummins for supplying connecting rods, which would also help fuel AFL's export growth in near future. Your company expects exports to grow at a CAGR of 267% for FY07E-08E.The Company expects export of Rs.lSOOmn in FY07E from Rs.200mn in FY06A and Rs2700mn in FY08E. Further FY08E onwards we expect to ramp up from global auto OEMs and from Amtek group companies.
5. RISKS & CONCERNS

During the year 2005-2006, raw material and components formed substantial part of the total sales. For the past over two years, steel prices have been extremely volatile and trend is likely to persist. The Company has been partly countering such increase through long term contracts, identification of alternative sources, through cost reduction and VA/VE activities. However, if these input costs continues to increase, and thus remain unabated, it will undoubtedely affect overall margin and operating results.

The profitability of the Company may further be affected by changes in Government Policies regarding Excise Duty, Import Duty, Income Tax, Fringe Benefit Tax, VAT and any other Central/State levy etc . Though, the rupee is getting stronger and stable, any sudden change due to rupee depreciation, may affect adversely the profitability of the Company. Any significant downturn in the domestic Commercial Vehicle, Two Wheeler markets and export markets could impact Company's earning negatively.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place an adequate system of internal controls to ensure efficacy of opertions and compliance with applicable legislation. Audit Committee is reviewing the internal control systems procedures, periodically. An external firm of Chartered Accountants have been appointed for conducting the Internal Audit. The key elements of internal control systems are:
7.

Revenue and Capital Budget monitoring system Management Information System Proper authorization for conducting business Periodical presentation by managerial personnel

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year, the total sales and other income increased by more than 82% to Rs. 37542.77 lacs, from Rs. 20581.86 lacs in the previous year.

The Gross profit before taxation has increased from Rs. 2995.04 lacs during the previous year to Rs. 5748.62 lacs during the current year registering an increase of 92%
The Profit after tax has also increased from Rs. 2087.39 lacs during the previous year, to Rs. 4090.21 lacs during the current year representing an increase of 96%.
During the year ended 30th June 2006, the Company has Reserve & Surplus amounting to Rs. 22436.46 Lacs as compared to Rs 6781.63 lacs in the previous year.

All the units of the company operated satisfactorily during the year.
8. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT

Your Company firmly believes in human capital and deeply believes that quality and positive attitude of the people are the keys to face the ever growing competition. Accordingly, change of mindset, innovation, cost and process optimization, anticipation and management of change, culture of trust and transparency have been our major HR initiatives during the year through our various program on naturopathy.
The Industrial relations remained cordial throughout the year.
9. CAUTION STATEMENT

This report contains forward looking statements. All such statements are subject to risks and uncertainties. Actual results could differ materially from those expressed or implied.
BY ORDER OF THE BOARD FOR AHMEDNAGAR FORINGS LIMITED

Place : New Delhi Date : 30th October 2006 16

(ARVIND DHAM) CHAIRMAN

AHMEDNAGAR FORCINGS LIMITED

AUDITORS' REPORT
TO

The Members, Ahmednagar Forgings Limited, We have audited the attached Balance Sheet of Ahmednagar Forgings Limited, as at 30th June 2006, the Profit & Loss Account and also cash-flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An Audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. We report that: i) ii) iii) iv) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of accounts as required by the law have been kept by the Company so far as appears from our examination of the books. The Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, are in agreement with the Books of Accounts. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956.
On the basis of written representations received from Directors as on 30th June 2006 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th June 2006 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

v)

vi)

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India: a) b)
c)

In the case of the Balance Sheet, of the state of affairs of the company as at 30th June 2006. In the case of the Profit & Loss Account, of the Profit for the year ended on that date; and
In the case of the Cash Flow Statement, of the cash flow for the year ended on that date

vii)

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section (4A) of section 227 of the Companies Act, 1956, we report as under on the matters specified in paragraphs 4 & 5 of the said order:

1.

In respect of fixed assets: a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets on the basis of available information.

b.

As explained to us, the fixed assets have been physically verified by the management during the year in a phased manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification. In our opinion, the company has not disposed off substantial part of fixed assets during the year and the going concern status of the company is not affected.

c. 2.

In respect of its inventories:

17

AHMEDNAGAR FORCINGS LIMITED

a. b.

As explained to us, inventories have been physically verified by the management at reasonable intervals during the year. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.
The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories, as compared to book records.

c.

3.

In respect of loans, secured or unsecured granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956:
a) The Company has granted loans to group companies aggregating to Rs. 11.40 Lacs. The maximum amount involved during the year was Rs. 11.40 lacs.

b) c) 4.

In our opinion and according to the information and explainations given to us, the rate of interest, wherever applicable and other terms and conditions are not prima facie prejudical to the interest of the Company. In respect of the loan granted to holding company, the loan is interest free and being repayable on demand are not overdue.

In our opinion and according to the information and explainations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase, inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in internal controls.

5. In respect of transactions covered under section 301 of the Companies Act, 1956:

a)

In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956. We are of the opinion that the terms and conditions thereof are not prime facie prejudical to the interest of the company.

b)

6.

In our opinion and according to the information and explanation given to us, the company has complied with the provision of section 58A, 58AA and other Provisions of the Companies Act, 1956 and the companies (Acceptance of deposits) Rule, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or Reserve Bank of India or National Company Law Tribunal or any Court or any Tribunal.
In our opinion, the internal audit system of the company commensurate with its size and nature of its business. The Central Government has prescribed maintenance of Cost Records under Section 209(l)(d) of the Companies Act, 1956 in respect of certain machining activities of the company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prime facie, the prescribed accounts and records have been properly maintained.

7. 8.

9.

In respect of statutory dues: a) According to the records of the company, undisputed statutory dues including provident fund, Investor Education and Protection fund, Employees' State Insurance, Income-Tax, Sales-Tax, Fringe Benefit Tax, VAT, Wealth-Tax, Customs Duty, Excise Duty, Cess, Service Tax and other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts, payable in respect of the aforesaid dues, were outstanding as at 30th June 2006, for a period of more than six months from the date of their becoming payable. The disputed statutory dues aggregating to Rs.2.73 Lacs, that have not been deposited on account of matters pending before appropriate authorities are as under:

b)

18

AHMEDNAGAR FORCINGS LIMITED

S. No 1.

Name of the Statute Customs & Central

Excise Act Total

Nature of Dues Interest

Forum where dispute is pending Asst. Commissioner, Ahmednagar Division, Ahmednagar

Amount (in Lacs)

2.73

2.73

10.
11.

The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.
Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or debenture

holders. 12.
13.

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.
In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provision of clause 4(xiii) of the companies (Auditor's Report) Order 2003, are not applicable to the company.

14.

In our opinion, the Company is not engaged in trading of securities, debentures and other investments. However, proper records of transactions and contracts in respect of long term investments have been maintained and timely entries have been made therein. All securities including shares, debentures and other investments have been held by the company in its own name. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. The Company has not given guarantees for loans taken by others from banks or financial institutions. The company has raised term loans during year to the extent of Rs.4250.00 Lacs from financial institutions/banks and the same has been used for the purpose, for which it has been raised.
According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment and long term funds have not been used to finance short term assets except for the purpose of meeting the long term working capital. During the year, the company has made preferential allotment of 92,20,000 Equity shares of Rs 10/-each at a premium of Rs 151/-per share including 16,50,000 Equity share of Rs. 107- each to the parties and Companies

15. 16.
17.

18.

covered in the register maintained under Section 301 of the Companies Act, 1956. The allotment and pricing of the shares have been made in accordance with the guidelines laiddown in this regard by SEBI and hence price, of which the shares have been issued is not prejudicial to the interest to the Company.
19. The company has not raised any money by way of public issue during the year.

20. Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the year. For Manoj Mohan & Associates Chartered Accountants

(M.K. Aggarwal) Place : New Delhi. Date : 30th October 2006

PARTNER Membership No.: 76980

19

AHMEDNAGAR FORCINGS LIMITED

BALANCE SHEET AS AT 30TH JUNE 2006

(Rs. In Lacs)
PARTICULARS SCHEDULE

As at 30th June 2006

As at 30th June 2005

1.

SOURCES OF FUNDS 1. SHAREHOLDER'S FUNDS

(a) Share Capital (b) Reserves & Surplus

2. LOAN FUNDS

1 2

3,322.00 22,436.46

800.00 6,781.63

(a) Secured (b) Unsecured

TOTAL II. APPLICATION OF FUNDS 1. FIXED ASSETS Gross Block

10,175.00 1,154.56 37,088.02

4,973.61 1,256.53 13,811.77

Less : Cumulative Depreciation Net Block

2. 3. INVESTMENTS 5

38,148.63 4,919.59 33,229.04 142.35

14,340.71 4,019.18 10,321.53 161.80

CURRENT ASSETS, LOANS & ADVANCES 6

(a) Current Assets (ij Inventories (ii) Sundry Debtors (iii) Cash & Banks Balances (b) Loans & Advances

6,368.69 3,914.28 972.22 1,816.60 13,071.79

4,830.99 2,452.06 1,287.08 948.55 9,518.68

Total Current Assets

Less: Current Liabilities & Provisions 7 Current Liabilities Provisions Total Current Liabilities & Provisions Net Current Assets 4. MISCELLANEOUS EXPENDITURE 8 (To the extent not written off or adjusted) TOTAL Notes to the accounts 12

8,181.38 1,261.78 9,443.16 3,628.63 88.00 37,088.02

6,301.79 20.45 6,322.24 3,196.44 132.00 13,811.77

In terms of our report of even date attached. For Manoj Mohan & Associates Chartered Accountants
(M K AGGARWAL)

For Ahmednagar Forgings Limited

A.K. SYAL Managing Director
PRABHJOT SINGH Company Secretary ARVIND DHAM Director B. LUGANI Director T.K. LASKAR DGM (Fin. & Acctt.)

Partner
Place : New Delhi Dated : 30th October 2006

20

AHMEDNAGAR FORCINGS LIMITED

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30TH JUNE 2006
(Rs. In Lacs)
PARTICULARS SCHEDULE

For the year ended 30th June 2006

For the period ended 30th June 2005

INCOME Sales & Other Income

EXPENDITURE

37,542.77

20,581.86

Material & Manufacturing Expenses Personnel Expenses Administrative, Selling & Other Exps. Financial Expenses

10 11

27,893.89 1,491.73 837.27 535.74

30,758.63

14,696.89 1,296.82 740.52 435.04

17,169.27

TOTAL

Profit Before Depreciation Depreciation

Profit Before Tax Provision for Taxation

6,784.14 1,035.52
5,748.62

3,412.59 417.55 2,995.04

Current Tax Deffered Tax

Profit After Tax Add: Accumulated Profit

497.17 1,161.24 4,090.21 363.32

251.99 655.66 2,087.39 1,775.93

Balance Available For Appropriation

APPROPRIATIONS: Trfd. to General Reserves

4,453.53

3,863.32

3,500.00 664.40 93.18 195.95

12

3,500.00 0.00 0.00 363.32

Proposed Dividend on Equity Capital Provision for Tax on Dividend Surplus carried to Balance Sheet Notes to the accounts In terms of our report of even date attached. For Manoj Mohan & Associates Chartered Accountants
(M K AGGARWAL)

For Ahmednagar Forgings Limited

A.K. SYAL Managing Director
PRABHJOT SINGH

ARVIND DHAM Director B. LUGANI

Partner
Place : New Delhi Dated : 30th October 2006

Company Secretary

Director
T.K. LASKAR DGM (Fin. & Acctt.)

21

AHMEDNAGAR FORCINGS LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH JUNE 2006
(Rs. In Lacs)
PARTICULARS

For the year ended

30th June 2006

For the year ended 30th June 2005

2,995.04 417.55 0.00 (27.67) (0.50) (11.12) 44.00 3,417.30
(1,061.16)

A.

CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit before tax & extraordinary items Adjustments to reconcile profit before tax & extraordinary items to cash provided by operation : Add : Depreciation Loss/(Gain) on sale of Investments, net LossX(Gain) on sale of fixed assets, net Dividend Income Interest Received & Other Income Deferred & Preliminary Exp. Written off
Changes in current assets, Loans & Advances : (Increase) / Decrease in Inventories (Increase) / Decrease in Sundry Debtors

5,748.62 1,035.52 (34.84) (8.11) (0.09) (52.61) 44.00 6,732.49 (1,537.70) (1,462.22) (868.05) 704.93 3,569.45 52.61 0.09 3,622.15
(24,130.29)

(Increase) / Decrease in Loans & Advances Increase / (Decrease) in Current Liabilities

Cash generation by operations Interest Received & Other income

(275.74) (78.55) (850.03) 1,151.82 11.12 0.50 1,163.44 (3,966.45) 159.44 (1.89) (3,808.90)
0.00 3,965.89 (370.83)

Dividend Received Net cash from operating activities

B. CASH FLOW FROM INVESTING ACTIVITIES Addition to Fixed Assets (including Capital Work In Progress) Proceeds from Sale of Investment

Proceeds from Sale of Assets Net Cash from Investing activities

C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from issue of share capital

54.29 195.37 (23,880.63) 14,844.20 5,099.42 0.00 19,943.62 (314.86) 1,287.08 972.22

Proceeds from new borrowings Repayment of borrowings Net Cash from financing activities Net cash flows during the year (A+B+Q Cash & Cash equivalents (opening balance) Cash & cash equivalents (closing balance)
NOTES TO CASH FLOW STATEMENT 1. Figures in brackets indicate cash outflow and without brackets indicate cash inflow. 2. Interest paid during the year is considered part of operating activities 3. Bank borrowings comprising of cash credit have been grouped as part of financing activities.

3,595.06 949.60 337.48 1,287.08

For AHMEDNAGAR FORGING LIMITED ARVIND DHAM Director PRABHJOT SINGH Company Secretary A.K. SYAL Managing Director B. LUGANI Director T.K. LASKAR DGM !Fin.& Acctt.)

We have examined the above Cash Flow Statement of Ahmednagar Forging Limited for the year ended 30fh June 2006 and verify that it has been derive from the audited accounts (and underlying records] of the company reported on by us as per our report. For Manoj Mohan & Associates Chartered Accountants Place Dated New Delhi 30th October 2006 (M.K. AGGARWAL) Partner

22

AHMEDNAGAR FORCINGS LIMITED

SCHEDULES FORMING PART OF THE BALANCE SHEET

Schedule 1
SHARE CAPITAL PARTICULARS

(Rs. In Lacs)
As at 30th June 2006 As at 30th June 2005

AUTHORISED 3,50,00,000 Equity Shares of Rs. 10/- each

(Previous year 1,00,00,000 Equity share of Rs. 10/- each)

ISSUED, SUBSCRIBED AND PAID UP 3,32,20,000 Equity shares of Rs. 10/fully paid up (Previous Year 80,00,000 Equity shares of Rs. 10/- each) TOTAL

3,500.00 3,322.00

1,000.00 800.00
800.00

3,322.00

Schedule 2
RESERVES & SURPLUS PARTICULARS

(Rs. In Lacs)
As at 30th June 2006 As at 30th June 2005

Share Premium Opening Balance Less Bonus Shares Issued Add Issue of Shares Capital Subsidy General Reserve Opening Balance Less: Bonus Shares Issued Add Trf. during the year
Profit & Loss Account
TOTAL

1,302.56 (1,302.56) 13,922.20

IT 900 on

81.67

1,302.56 81.67

5,034.08 (297.44)

3,500.00

r\r\ f

/A

195.95 22,436.46

5,034.08 363.32 6,781.63

Schedules
LOAN FUNDS PARTICULARS

(Rs. In Lacs)
As at

As at
30th June 2005

30th June 2006

Secured Loans: (i) Bank Borrowings (ii) Loans from Financial Institutions
TOTAL Notes:

3,675.00 6,500.00
10,175.00

2,723.61 2,250.00 4,973.61

Term debts from Financial Institutions/Banks are secured by way of first mortgage of Company's all immovable properties ranking pari passu interse and hypothecation of whole of the Company's movable properties including plant & machinery, machinery spares, tools and accessories (save and except book debts) present and future, subject to prior charges created/to be created in favour of the Company's bankers on inventories book debts and other specified movables for securing the borrowing for working capital requirements and loans under EFS/ECS/HP/Lease schemes if any are secured by way of charge on the specified assets financed under the scheme.

23

Schedule 4
FIXED ASSETS GROSS BLOCK

(Rs. in Lacs)
DEPRECIATION
WRITTEN DOWN VALUE

PARTICULARS

As on 01.07.05
86.00

Additions

Sales/

Transfers 2.11

As on 30.6.06
83.89

As on 1.7.05
-

During the year -

Written Back/adj. -

As on
30.6.06

As on 30.6.06
83.89

As on 30.6.05
86.00

Land & Site Development (Including Leasehold) Building

Plant & Machinery Furniture & Fixture Office Equipment

1,079.95 9,118.00 95.01 46.06 129.86 75.99

10,630.87

3.34 8,242.52 3.37 2.90 26.32 11.00 8,289.45 23,944.69 32,234.14

30.65 270.69 2.16 0.21 2.32 14.23 322.37 8,103.85 8,426.22

1,052.64 17,089.83 96.22 48.75 153.86 72.76 18,597.95 19,550.68 38,148.63

340.50 3,503.79 51.81 19.37 74.51 29.20

35.07 964.77 5.99 2.37 20.47 6.85 1,035.52 1,035.52

10.73 109.67 1.39 0.13 2.22 10.97 135.11 135.11

364.84 4,358.89 56.41 21.61 92.76 25.08 4,919.59 4,919.59

687.80 12,730.94 39.81 27.14 61.10 47.68 13,678.36 19,550.68 33,229.04

739.45 5,614.21 43.20 26.69 55.35 46.79 6,611.69 3,709.84 10,321.53

Data Processing Unit Vehicle

TOTAL

4,019.18

Capital Work-in-Progress 3,709.84

TOTAL GROSS BLOCK CURRENT YEAR 14,340.71

4,019.18

Total Gross Block (Previous Year)

10,581.14

7,262.85

3,503.28

14,340.71

3,676.74

417.55

75.11

4,019.18

10,321.53

AHMEDNAGAR FORCINGS LIMITED

Schedules
tJVESTMENT PARTICULARS _________________ As at 30th June 2006 13.00 (Rs. In Lacs) As at 30th June 2005

(Quoted-Long Term Trade) at Cost 1,00,000 Equity Shares of Rs. 107- each of Grapco Mining & Co. Ltd. (Previous year 1,00,000 Equity Shares of Rs. 10/- each) 1,03,100 Equity Shares of Rs. 10/- each of Global Infrastructure & Technologies Ltd. (Previous year 1,03,100 Equity Shares of Rs. 107- each) 700 Equity Shares of Rs. 10/- each of Sanghvi Movers Ltd. AT cost (Previous year 17,700 Equity Shares of Rs. 10/- each) 50,000 Equity Shares of Rs. 10/- each of Patheja Forging & Auto Parts Ltd. At cost (Previous year 50,000 Equity Shares of Rs. 107- each) 5,000 Equity Shares of Rs. 107- each of Good Value Marketing Ltd. At cost (Previous year 5,000 Equity Shares of Rs. 107- each) 7,014 Equity Shares of Rs. 107- each of Dena Bank At cost (Previous year Nil Equity Shares of Rs. 10- each)) (Unquoted - Long Term Non Trade) at Cost Nil Equity Shares of Rs. 1007- each of Usav Forgings Ltd. At cost (Previous year 5,000 Equity Shares of Rs. 1007- each) 50,000 Equity Shares of Rs. 107- each of Photon Biotech Ltd. (Previous year 50,000 Equity Shares of Rs. 107- each) 10,000 Equity Shares of Rs. 107- each of SICOM Ltd. (Previous year 10,000 Equity Shares of Rs. 107- each)
TOTAL

13.00

54.86 0.60

54.86

15.05

50.00
2.00 1.89

50.00

2.00

1.89

0.00
12.00 8.00

5.00
12.00

8.00

142.35

161.80

Schedule 6
CURRENT ASSETS, LOANS & ADVANCES (Rs In Lacs)

PARTICULARS As at As at _____________________________________30th June 2006________30th June 2005

a) Current Assets i) Inventory -. (As Certified by the Management) - Raw Material - Semi Finished Goods - Finished Goods - Consumable Stores - Other Stocks
TOTAL

955.00 3,662.02 885.87 748.14 117.66

6,368.69

1,192.10 1,516.58 1,235.70 761.05 125.56

4,830.99

ii)

Sundry Debtors: (Unsecured considered good) Outstanding for over six month Other Debts
TOTAL

441.96 3,472.32
3,914.28

539.27 1912.79
2,452.06

25

AHMEDNAGAR FORCINGS LIMITED

ill)

Cash and Bank Balances Cash in Hand Balances with Scheduled banks : In Current Accounts In Fixed Deposits/Margin Money
TOTAL

37.23 727.03 207.96 972.22

51.15 944.43 291.50 1,287.08

b)

Loans and Advances

a) Advances Recoverable in Cash or in kind or for value to be received (considered good)
TOTAL 1,816.60 948.55 948.55

1,816.60

Schedule 7
CURRENT LIABILITIES & PROVISIONS PARTICULARS
CURRENT LIABILITIES

(Rs. In Lacs)
As at 30th June 2006
3,069.10 0.94 4,974.29 137.05 8,181.38

As at 30th June 2005

1,735.40 0.94 4,378.26 187.19 6,301.79

Sundry Creditors Unpaid Dividend Other Liabilities Provision for Expenses

TOTAL ~A~ PROVISIONS

Provision for Taxation Proposed Dividend Provision for Tax on Dividend

TOTAL ~B~
GRAND TOTAL (A+B)

504.20 664.40 93.18 1,261.78 9,443.16

20.45 0.00 0.00 20.45 6,322.24

Schedule 8
MISCELLANEOUS EXPENDITURE

(Rs. In Lacs)
As at 30th June 20O6

PARTICULARS

As at 30th June 2005

(To the extent not written off or adjusted) 1. Deferred Revenue Expenses a) Deferred Expenditure
TOTAL

88.00

132.00 132.00

88.00

26

AHMEDNAGAR FORCINGS LIMITED

SCHEDULES FORMING PART OF PROFIT & LOSS ACCOUNT

Schedule 9
/MATERIAL & MANUFACTURING EXPENSES PARTICULARS

(Rs. In Lacs)

For the year ended 30th June 2006

25,530.99 (1,787.71) 23,743.28 888.79 2,127.09 887.25 119.14 128.34
27,893.89

For the period ended 30th June 2005

11,732.95 (862.63) 10,870.32 814.55 1,804.88 998.10 124.34 84.70 14,696.89

Material Consumed Add : Decrease / (Increase) in Stock

Consumables Power & Fuel Other Manufacturing Expenses Freight Inwards Repairs to Plant & Machinery
TOTAL

Schedule 10
PERSONNEL EXPENSES

(Rs. In Lacs)
For the year ended 30th June 2006
1,292.04 199.69
1,491.73

PARTICULARS

For the period ended 30th June 2005

1,124.87 171.95 1,296.82

Salary and Wages Contribution to P.F., Gratuity, Leave Encashment, Staff Welfare etc.
TOTAL

Schedule 11
ADMINISTRATIVE, SELLING AND OTHER EXPENSES PARTICULARS

(Rs. In Lacs)

For the year ended 30th June 2006

1.08 3.00 0.57 0.01 13.38 6.50 17.91 0.04 91.45 1.29 10.11 18.56 (15.27) 29.16 17.13 4.52 35.52 59.46 17.48 379.14 102.23 44.00 837.27

For the period ended 30th June 2005

0.94 2.50 0.83 3.46 11.33 7.82 25.25 1.72 76.70 9.30 7.93 20.08 123.68 24.19 12.71 2.75 28.10 53.59 0.05 225.60 57.99 44.00 740.52

Advertisement & Publicity Auditor's Remuneration Books & Periodicals Charity & Donation Directors' Remuneration & Perquisites Business Promotion & Development Expenses Insurance Charges ISO Expenses Legal & Professional Loss on Sale of Assets Office and Factory Exps. Printing & Stationery Rates, Fee & Taxes Rent Running & Maintenance of Vehicle Subscription & Membership Fees Telephone, Telex & Postage Exps. Travelling & Conveyance
SELLING & DISTRIBUTION EXP

Cash Discount Freight Outwards Packing & Forwarding

EXPENSES WRITTEN OFF

Deferred Expenditure
TOTAL

217

AHMEDNAGAR FORCINGS LIMITED

SCHEDULE : 12 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS (ATTACHED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30TH JUNE 2006)
I.
A.

SIGNIFICANT ACCOUNTING POUCIES:

BASIS OF ACCOUNTING

These accounts are prepared on the historical cost basis and on the accounting principles of a going concern. Accounting

policies not specifically referred to otherwise are consistent and in accordance with generally accepted accounting principles in India (Indian GAAP) and in compliance with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) as referred in sec. 211 (2c) of the Companies Act, 1956.
B. C. REVENUE RECOGNITION FIXED ASSETS

Sales are recognized at the time of despatch of goods and all expenses and income are accounted on accrual basis.

Fixed assets are stated at cost less accumulated depreciation. The cost of fixed assets includes their original cost of acquisition net of cenvat and including taxes, freight and other incidental expenses related to acquisition and installation of the concerned assets.
D. DEPRECIATION

Depreciation on fixed assets is provided on "Straight Line Method" in the manner and at the rates as specified in Schedule XIV of the Companies Act, 1956. Depreciation on additions / deductions to Fixed Assets is provided on pro-rata basis from the date of actual installation or upto the date of such sale / disposal, as the case may be.
E. INVENTORIES

Raw Materials, Stores & Spares, Goods under process and Finished Goods are valued at Cost or Net Realizable Value

whichever is lower. Waste and scrap is valued at Net Realizable Value. Cost of inventories of Raw Materials and Stores and Spares is ascertained on FIFO Basis. Cost of goods under process and finished goods comprises of cost of materials, production overhead and depreciation on plant and machinery. Cost of material for this purpose is ascertained on First In first Out basis. Provision for obsolescence in inventories is made whenever required.
f. INVESTMENT

Investments are stated at cost of acquisition. Provision for diminution in value of long term investment is made, if the diminution is other than temporary.
G. FOREIGN CURRENCY TRANSACTIONS

a)

The working capital loans are revalued at exchange rates prevailing at the year end. Exchange difference arising on such revaluation are duly recognized in the Profit & Loss Account.

b)

In case of forward exchange contracts to repay working capital loans, the difference between the forward rate and the exchange rate at the date of transaction, is recognized as income or expenses over the life
of the contract.

c)

Debtors and working capital loans in foreign currency are revalued at the year end exchange rates. Exchange differences arising on such revaluation are recognized in Profit & Loss Account.

d)
H.

Exchange differences arising on revaluation of foreign currency loans relating to acquisition of fixed assets from outside India are adjusted against relevant fixed assets.

EXCISE DUTY

Excise duty is paid according to the prevailing excise rules but is accounted for in the books on accrual basis. Accordingly, provision for excise duty is made for goods lying in the bonded warehouse.
I. EMPLOYEES' RETIREMENT BENEFITS

i)

ii)

Retirement benefits in the form of Provident Fund and Pension Schemes whether in pursuance of law or otherwise, is accounted for on accrual basis and charged to Profit & Loss Account of the Year. Provision for present liability for future payment of gratuity is being made to approved Gratuity Fund, which covers the same under Cash Accumulation Policy of Life Insurance Corporation of India, for employees of all plants and Head Office.

2i8

AHMEDNAGAR FORCINGS LIMITED

iii|
J.

Superannuation: Contribution made to Life Insurance Corporation for employees covered under Super Annuation Scheme are accounted for at the rate of 12% of such employees' annual salary.

RESEARCH AND DEVELOPMENT

Capital Expenditure is shown separately under respective heads of fixed assets. Revenue expenses including depreciation are included under the respective heads of expenses.
K. BORROWING COST

Interest on borrowings are recognized in the Profit and Loss account. Interest incurred on borrowings, specifically raised for Projects, is, however, capitalized with the cost of the asset until such time the asset is ready to be put to use for intended purpose.
L TAXATION

A)

B)

Provision for Taxation is made on the basis of the taxable profits computed for the current accounting period ( reporting period) in accordance with Income Tax Act, 1961. Deferred Tax resulting from timing difference are expected to crystallize in case of deferred tax liabilities with reasonable certainty and in case of deferred tax assets with virtual certainty that there would be adequate future taxable income, against which such deferred tax assets, can be realized.

M. DEFERRED REVENUE EXPENSES

Consequent to the Accounting Standard on Intangible Assets' (AS26) becoming applicable, expenditure on product development, which was earlier classified as deferred revenue expenditure, is now accounted for in accordance with the said standard, accordingly, i) ii)
N.

Product development expenditure relating to product up-gradation has been charged off during the year to the Profit and Loss Account. Deferred Revenue Expenses incurred prior to 01.07.2003 is amortized over a period of 5 years.

IMPAIRMENT OF ASSETS

There is no impairment of fixed assets of the company and as such no impairment loss has been recognized during the year as required by Accounting Standard "AS-28" on Impairment of Assets.
II. NOTES ON ACCOUNTS:

1. 2.

Schedule 1 to 12 form an integral part of the Balance Sheet and Profit & Loss Account. Contingent Liabilities:

(Rs. in Lacs)

Current Year
30.06.06

Previous Year
30.06.05

a)

Estimated amount of contracts remaining to be executed on Capital Account and not provided for
Unexpired Letters of Credit

1,115.13

583.18

b)

61.50

55.00

c) 3.

Disputed Tax Liability

2.73
4,090.21 80,00,000 160,00,000 92,20,000 3,32,20,000 2,70,56,493 10/-

7.04
2087.39 80,00,000

Earning Per share: Net Profit after tax ( Rs. Lacs ) Number of equity shares at the begining of the year Issue of Bonus Shares Issue of Fresh Shares No. of Shares at the end of year Weighted Average of Shares Face value of each equity share (Rs.) Earning Per Share (Rs.) (Basic/Diluted)

80,00,000 80,00,000 10/-

1 . 2 51

26.09

29

AHMEDNAGAR FORCINGS LIMITED

4.

In the opinion of the Board of Directors, all Current Assets and Loans and Advances, if realised in the ordinary course of business, would be realised at least equal to the amounts at which they have been stated in the Balance Sheet. Provision for all known liabilities have been made in the books of accounts.
The Company is primarily focused on manufacturing Steel Forgings. Therefore, there are no separate segments within the Company as defined by Accounting Standard 17 (Segment Reporting), issued by Institute of Chartered Accountants of India and hence the same is not reported.

5.

6.

Related party Disclosures

Related party disclosures as required under Accounting standard on " Related Party Disclosures", issued by the Institute of Chartered Accountants of India, are given below: (Rs. In lacs)
Sr. No.
1. 2. 3.
4.

Particulars
Sale of goods Purchase of Goods Advances taken
Remuneration of Key Management:

Holding Company
367.84 (123.16) 405.92 (773.62) -11.40 (-121.41)

Key Management Personnel

13.38 (11.33)

Note : Name of the related parties and description of relationship Sr. No. Particulars 1. 2.
7.

Name of the Party Amtek Auto Ltd Mr Arvind Dham Mr. A.K. Syal

Holding Key Management Personnel

Other liabilities under Current Liabilities include amount recovered from customers on account of CST/LST/Surcharge, but not deposited, as the Company had been issued an eligibility certificate for Sales Tax deferment under the Maharashtra Sales Tax Act, 1959.

8.
9.

Maximum amount outstanding at any time during the year due from /due to directors is Rs. Nil. (Previous year Rs. Nil).
Confirmation of Balances in some of the Debtors Account as at 30th June 2006 are yet to be received as at the date of Auditors' Report.

10. Consequent to the amendment to Schedule VI of The Companies Act, 1956 the information in respect of Small Scale Industrial Undertakings, to whom the Company owe a sum exceeding Rs. 1,00,000 and which is outstanding for more than 30 days, are not ascertainable as at 30th June 2006.

11.

The balances with Schedule Banks include:

Current Year

(Rs. in Lacs)
Previous Year
291.50

a) 12.

Fixed Deposits, which stand pledged against Letters of Credit for purchase of raw material

207.96

Advances recoverable in cash or in kind or for value to be received include: Prepaid Expenses 21.55

16.41

30

AHMEDNAGAR FORCINGS LIMITED

(Rs. in Lacs)

Current Year
Miscellaneous income include: a) Interest 52.61 0.09 b) Dividend Income 0 Misc. Income 56.03 9.40 d) Profit on sale of assets Profit on sales of Investment 34.84 e) Other Sales & Income 1600.04 f) 14. Managerial remuneration includes the following payments to Director 13.38 a) Salary & other perquisites Details of remuneration to directors are given in note 6 of Note to Account 15. Auditors Remuneration includes a) Audit Fees 2.50 b) Reimbursement of Expenses 0.50 16. Market Value of the Quoted investments as on 30.06.2006. 13.

Previous Year

11.12 00.50 34.06 36.98 1422.44 11.33

2.50

Sanghvi Movers Ltd. Rs. 701.70 per share Dena Bank Rs. 25.95 per share Grapco Mining & Co. Ltd., Good Value Marketing Ltd., Patheja Forging & Auto Parts Ltd. and Gloabal Infrastructure & Technologies Ltd. Not Available 17. Unsecured loans include loans from Promoters, Associates, on account of investments, Public Deposits, Short Term loans etc. 18. The Company made Preferential allotment of 92,20,000 Equtiy shares of Rs 10/ each at a premium of Rs 1517- per share to promoter of the Company, Fll's, Bodies Corporates and individuals for the purpose of augmenting resources for capacity expansion of the existing units of the Company. The proceeds of the issue have been utilised for the purpose, for which it was raised.
19. A) INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPHS 3,4C & 4D OF PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956

a)

Materials Consumed

Sr

Hem

Unit
MTs.

Current Year
Rs. Lacs
25530.99

Unit
MTs.
25133

Previous Year
Rs. Lacs
11732.95

i) ii! iii)

Carbon and alloy steel Die Steel Stores

43873

158.81 729.98 26419.78

98.68 715.88 12547.51

b) Sr Item

Particulars in respect of goods manufactured

Unit

Licenced Capacity
74,000 (46,000) 16,000 (12,050)

Installed Capacity
74,000 (46,000) 16,000 (12,050)

Production

i)

Steel Forgings

M.T. M.T.

*29425 (18553) 8499 (568)

ii)

Finished / Semi Finished Steel Forgings

*Production includes rejection. 31

AHMEDNAGAR FORCINGS LIMITED

c)

Stocks and turnover of Goods Manufactured by the Company

Opening Stock
Qty M.T.s

Closing Stock
Qty M.T.s
1005 (1393) 4197 (1964)

Sales
Qty M.T.s

Value Rs. (Lacs)

1235.70 (457.80)
1642.14 (1557.43)

Value Rs. (Lacs) 885.87 (1235.70)

3779.67 (1642.14)

Value Rs. (Lacs)

i)
ii)

Steel Forging
Work-in-progress

1393 (596)
1964 (2173)

37503 35789.76 (17784) (16621.60)

(-) (-) (-) (-)

B)

Expenditure in Foreign Currency

Current Year
A) B) Foreign Travel Other Matters i) Interest
13 .70 116 .60

Previous Year
9.07

137.77

C)

GIF Value of Imports i) Semi-finished Goods ii) Capital Goods iii) Spares

940.09 141.05

251.27 19.25 17.48

C) Exports Income 4,361 1324.00 20. Export Sales include sales in transit to its overseas customers, acknowledged in subsequent year, indirect export/deemed export.

21. Details of units manufactured, material consumed and sales include component bought and sold. 22. Previous year's figures have been regrouped and rearranged wherever necessary.

32

AHMEDNAGAR FORCINGS LIMITED

II. I.

BALANCE SHEET ABSTRACT & COMPANY'S GENERAL BUSINESS PROFILE:

Registration Details:
Registration No. Balance Sheet Date State Code | 19569 | 130-06-2006] I 11 I

II.

Capital Raised during the year (Rs. In Lacs) Public Issue

Nil

Right Issue
I Nil |

Bonus Issue | 1600.00 | CRPS

Private Placement/Promoters/ Financial institutions

922.00

Premium
|13922.20|

Nil

III.

Position of Mobilisation and Deployment of Funds: Total Assets Total Liabilities

[37088.021 Sources of Funds: |37088.02|

(Rs. In Lacs.)

Paid-up Capital

Reserves & Surplus

|22436.46|

[3322.00 | Share Application Money

I Nil |

Secured Loans
110175.00 |

Unsecured Loans
| 1154.56 |

Application of Funds: Net Fixed Assets

|33229.04| Net Current Assets [3628.63 |

Investments
| 142.35 |

Misc. Expenditure
I 88.00 I

IV.

Performance of Company (Amount in Lacs.) Total Expenditure Turnover

[37542.771

[31794.151

Profit before Tax

I 5748!62|

Profit after Tax

I 4090.21 I

Earning per sharee

I 15.12 |

Dividend Rate %
\ 20

V. Generic Names of Three Principal Products/Services of Company (as per monetary terms) Code Products Name
Die Steel Forgings

Forged Machined Components

For Ahmednagar Forgings Limited

T.K. LASKAR DGM (Fin. & Acctt.)
PRABHJOT SINGH ARVIND DHAM

Company Secretary

Director

A.K. SYAL Managing Director

B. LUGANI

Director

For Mono} Mohan & Associates Chartered Accountants

Place : New Delhi Dated : 30th October 2006
33

(M K. Aggarwal) Partner