Business Overview by Region (FY2009-10)

<India>
-With LCVs registering a growth of 41% and M&HCVs growing by 30%, CV production increased by 36%. There is every indication that the CV segment has emerged from its cyclical low and moving towards an upsurge. Increased infrastructure activity is also expected to fuel further demand in the CV segment.

<USA>
-The Company exports mainly to the M&HCV segment with a specific focus on chassis and engine components in Class 8 commercial vehicles.

<Europe>
-Demand for automobiles contracted significantly in Europe. Europe already had large stocks of inventory in early 2009 - and much of the existing market was catered to from these stocks. Therefore production levels were even lower and demand for automotive forgings reduced significantly.

-As in the US, the Company serves the European market through exports from India as well as through local facilities. Due to the downturn in the European automotive market, the Company & CDP Bharat Forge GmbH, which are predominantly catering to the CV sector, were adversely affected during the year. Bharat Forge Aluminiumtechnik GmbH, the German subsidiary has also been affected - but to a lesser extent due to its presence only in the passenger vehicles segment which was less affected as compared to CV.

<China>
-The Company has developed crankshafts for CVs and has also started supplies to a new customer outside the FAW group.

-Restructuring work, including some manpower rationalisation, has been undertaken and there has been better capacity and some productivity gains.

Restructuring

-The operations of Bharat Forge Scottish Stampings Limited in UK were closed down and its assets and business was transferred to Bharat Forge Kilsta AB, Sweden.

R&D Expenditure

(in million Rs.)

	FY2009-10	FY2008-09	FY2007-08
R&D Expenditure	28.55	36.38	68.81
Total turnover	18,887.36	21,063.54	22,849.00
Total R&D expenditure as a % of total turnover	0.15%	0.17%	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).