Highlights in FY2008 (ended Mar. 2008)

The total revenue has grown by 11.1% to Rs. 47,516 million on the back of strong growth in export business from Indian operations, moderate growth in Bharat Forge Kilsta AB (BFK) and good improvement in utilization levels in the Chinese operations.

In spite of slowdown in Indian market, the Company has achieved growth across various parameters of performance. The factors which aided the sustained growth were the growth in exports of medium and heavy duty engine parts, increased presence in passenger car market and strong growth in chassis component business in Europe.

Exports revenue (on a stand-alone basis)

(in million Rs.)	FY2008	FY2007	Rate of change
Total income	22,849	19,453	17.5%
Exports revenue	9,610	7,513	27.9%
Total exports revenue as a % of total income	42.1%	38.6%	-

During the year under review, exports turnover of the Company touched Rs. 9,610 million mark, an increase of 27.9% over previous year. This is primarily attribute to :

- Ramp up of supplies for machined, Heavy Duty Engine Crankshafts to USA and Europe.

- Ramp up of supplies of passenger car crankshafts to USA and Europe.

- Growth in chassis components

By region

- India

This year, the rate of growth slowed down to 11.7%. The CV segment which constitutes a major potion of BFL's sales grew less than 5%.

The MCV and HCV segment constitutes the biggest market segment for BFL's sales within India. Despite this sector de-growing by 1.0% on a year-on-year basis BFL has been able to post a moderate growth of 11.0%. This has been possible because of increased market share with all major OEMs.

-USA

BFL (India)

The performance of exports from BFL (India) to US demonstrated the effectiveness of the de-risking strategy. With the significant de-growth in the MCV & HCV segment, the Company's mainstay in the US market, sale of chassis and engine components to the CV segment was adversely affected. However, this fall in sales was offset by 61% increase in sales to the passenger vehicles and non-automotive sectors. Consequently , BFL was able to maintain its exports into the USA.

Bharat Forge America (BFA)

BFA operates mailnly in the pick-up truck space, which witnessed a significant slowdown in 2007-08. Consequently BFA's performance for the year was adversely affected. It is also working on development of engine parts like crankshafts and pistons for the passenger car segment in order to further de-risk its business.

-Europe

The European market accounts for about 50% of BFL's consolidated sales. In FY2008, BFL (India) successfully ramped up several programs for commercial vehicle chassis, heavy duty engine parts and passenger car businesses. As a result of this, exports into Europe took a quantam jump, growing 82%. Consequently, Europe now constitutes 45% of BFL (India)'s total exports as against 31% last year. The strong growth in European exports has helped BFL to grow its total exports by almost 28%.

In Europe, much of the growth in MCV and HCV has come from increased demand from Eastern Europe. On the back of the growth, BFK, the subsidiary in Sweden performed well, improving its profit margins. This company caters to European markets, especially the Scandinavian region, producing CV engine and chassis components.

The other subsidiaries in Europe have recorded a stable performance in line with the markets except Bharat Forge Scottish Stampings Ltd. (Sweden) . CDP-BF(Germany) is also de-risking its product profile by developing new products like passenger car crankshafts.

R&D Expenditure

(in million Rs.)	FY2008
R&D Expenditure	68.81
Total turnover	22,849.00
Total R&D expenditure as a % of total turnover	0.30%

Technology imported

Year	Technology imported
2004	Technical know-how and assistance from MetalArt Corporaiton, Japan for the manufacture of forged products for Toyota's joint venture in India

The Company established the world's largest forging capacity of over 700,000 tonnes per annum (including the ongoing expansion).

Domestic Investments (FY2007)

Capacity expansion plans at Pune plants for close die forging and crankshaft machining have been completed.