The Members,

The Directors are pleased to present the 28^th Annual Report and Audited Financial Statements for the year ended March 31, 2018.

FINANCIAL HIGHLIGHTS:

DIVIDEND:

In view of proposed expansion plans, your Directors do not recommend a Dividend for the financial year ended March 31, 2018.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

During financial year 2017-18, there was no change in the nature of Company's business.

SHARE CAPITAL:

There was no change in the authorized as well as paid up share capital of the Company during the year under review.

The current Authorized Capital of the Company is Rs.13,25,00,000/divided into 1,25,00,000 Equity shares of Rs.10/- each and 7,50,000 4% Non-Cumulative Redeemable Preference Shares of Rs.10/- each and Paid-up Capital of the Company is Rs.10,93,94,000/- divided into 1,09,39,400 Equity Shares of 10/- each.

TRANSFER TO RESERVES:

During the year, the Company has not transferred any amount to General Reserves.

OPERATIONS AND STATE OF AFFAIRS:

Sales income stood at Rs.2078.16 Lakhs as compared to previous year of Rs.426.24 Lakhs. This is a 4 fold increase from the time the new management took over. Export revenue saw an increase from Rs.111.73 Lakhs achieved in previous year to Rs.136.01 Lakhs. The growth in the Company's topline coupled with focus on cost reduction has helped the Company to earn profit of Rs.36.29 Lakhs for the year ended March 31, 2018 as against net loss of Rs.370.19 Lakhs in the previous year.

The affairs of the Company are functioning smoothly and appropriately in compliance with all the applicable laws and regulations.

CORPORATE SOCIAL RESPONSIBILITY:

The company is not having net worth of Rupees Five Hundred Crores or more, or turnover of Rupees One Thousand Crores or more or a Net Profit of Rupees Five Crores or more during any financial year. As such, the provisions of Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company.

VIGIL MECHANISM:

The Company has set up vigil mechanism viz. Whistle Blower Policy to enable the employees and Directors to report to the Audit Committee Chairman, genuine concerns, unethical behavior and irregularities, if any, noticed by them in the Company, which could adversely affect company's operations. This mechanism also provides safeguards against victimization of employees, who avail of the mechanism. The details of the same are explained in the Corporate Governance Report and also posted on the website of the Company at http://www.rkforging.com/wp-content/uploads/2017/04/ WHISEL-BLOWER-POLICY-1.pdf. Further no personnel have been denied access to the Audit Committee during the period under review.

PUBLIC DEPOSITS:

Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, your directors confirm:

1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. that we had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

3. that we had 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;

4. that we had prepared the annual accounts on going concern basis;

5. and that we had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively;

6. that we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS OF BOARD MEETINGS:

During the year, 8 (Eight) Board Meetings were held on May 15, 2017, May 29, 2017, August 11, 2017, September 13, 2017, November 14, 2017, December 04, 2017, February 10, 2018 and March 09, 2018.

COMMITTEES OF THE BOARD:

The composition of the committees of the Board of Directors has been detailed in the Corporate Governance annexure to this Report.

DECLARATION BY INDEPENDENT DIRECTORS:

Mr. R. T. Goel and Ms. Sudha Santhanam are the independent directors on the Board of your Company. In the opinion of the Board and as confirmed by these Directors, they fulfill the conditions specified in Section 149(7) of the Companies Act, 2013, and Rules made thereunder confirming that they meet the criteria of independence.

DIRECTORS AND KEY MANEGERIAL PERSONNEL:

The present Board composition is as follows:

Ms. Shilpa Dixit resigned from the position of Non-Executive Director with effect from April 10, 2017. Subsequently Ms. Sudha Santhanam was appointed in her place with effect from May 15, 2017.

Further, Ms. Shruti Khandelwal resigned from the position of the Company Secretary and Compliance Officer with effect from May 17, 2017 and subsequently Ms. Shruti Patil was appointed in her place with effect from May 29, 2017.

RE-APPOINTMENT OF DIRECTOR:

As per the provisions of Companies Act, 2013, Mr. Arun Jindal, retires by rotation at the ensuing Annual General Meeting and, being eligible, seeks re-appointment. The Board recommends his re-appointment.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANY:

The Company does not have any subsidiary, joint venture and associate company during the year under review.

FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per the guidance note issued by SEBI on January 05, 2017, a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual Directors was carried out for financial year 2017-18. Led by the Nomination & Remuneration Committee, the evaluation was carried out using individual questionnaires covering, amongst others, composition of Board, conduct as per Company values & beliefs, contribution towards development of strategy & business plan, risk management, receipt of regular inputs and information, codes & policies for strengthening governance, functioning, performance & structure of Board Committees, skill set, knowledge & expertise of Directors, preparation & contribution at Board meetings, leadership etc.

Manner in which the evaluation has been carried out and matters incidental thereto, have been detailed in the Report on Corporate Governance, which forms part of this report.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR:

Under Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee (‘NRC') of your Board has formulated a Remuneration Policy for the appointment and determination of remuneration of the Directors, Key Managerial Personnel, Senior Management and other employees of your Company. The NRC has also developed the criteria for determining the qualifications, positive attributes and independence of Directors and for making payments to Executive and Non-Executive Directors of the Company.

The NRC takes into consideration the best remuneration practices in the industry while fixing appropriate remuneration packages and for administering the long-term incentive plans. Further, the compensation package of the Directors, Key Managerial Personnel, Senior Management and other employees is designed based on the set of principles enumerated in the said policy.

The Remuneration Policy has been posted on website of the Company which can be accessed at http://www.rkforging.com/wp-content/ uploads/2017/05/REMUNERATION-POLICY.pdf and the Policy on Appointment of Directors, Key Managerial Personnel, Senior Management & Other Employees is available on the Company's website at http://www.rkforging.com/wp-content/uploads/2018/07/ Policy-on-Appointment-of-Directors-Key-Managerial-Personnel-Senior-Management-Other-Employees.pdf

RELATED PARTY TRANSACTIONS:

The information for related party transactions as required under Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is enclosed as ‘Annexure A’ to this Report. The policy on Related Party Transaction as approved by the Board has been displayed on the Company's website at http://www.rkforging.com/wp-content/ uploads/2017/05/RELATED-PARTY-TRANSACTION-POLICY.pdf There has been no change to the policy of Related Party Transaction during the financial year ended March 31, 2018.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

a. The sum of '9,43,600 /- being the amount of unpaid or unclaimed dividend for a period of seven years was transferred during the financial year 2017-18 to the Investor Education and Protection Fund established by the Central Government in compliance with Section 124 of the Companies Act, 2013.

b. During the year under review, the Company has transferred 5,34,300 shares to the Investor Education and Protection Fund in accordance with the provisions of Section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules').

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

There were no loans, guarantees and investments made by the Company under Section 186 of the Companies Act, 2013 during the period under review.

INTERNAL FINANCIAL CONTROLS:

The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business by virtue of internal audit of the Company. Internal Audits are periodically conducted by an external firm of Chartered Accountants who monitor and evaluate the efficiency and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Board also take quarterly review of internal audit functioning and accounting systems, in order to take suitable corrective actions in case of any deviations. During the year, such controls were tested and no material weakness in their design of operations were observed.

CORPORATE GOVERNANCE CERTIFICATE:

In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the report on Corporate Governance along with the Compliance certificate from the Secretarial Auditor forms part of this Report.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT 9 is annexed as an ‘Annexure B’ to this Report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material change and/or commitment affecting the financial position of your Company has occurred between April 1, 2018 and the date of signing of this Report.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS IN THEIR REPORTS:

There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report.

AUDITORS:

Statutory Auditors

M/s Gokhale Tanksale & Ghatpande, Chartered Accountants, Pune (Firm Registration No. 103277W) was appointed as the Statutory Auditors of the Company to hold office for a period of 5 consecutive years from the conclusion of 27^th Annual General Meeting of the Company held on September 27, 2017 till the conclusion of the conclusion of 32^nd Annual General Meeting of the Company to be held in financial year 2022-23.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2015 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have appointed Mr. Gaurav Nashikkar, Practicing Company Secretary (CP No. 13967) for conducting the Secretarial Audit of the Company for financial year 2017-18.

The Report of the Secretarial Audit is annexed herewith as an ‘Annexure C’ to this Report.

COST RECORDS AND / OR COST AUDIT:

Your Company does not fall under provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Record and Audit) Rules, 2014. Therefore, no such records were required to be maintained.

REPORTING OF FRAUDS BY STATUTORY AUDITOR:

During the period under review, there were no frauds in the Company, hence no reporting made by the Statutory Auditors of the Company under sub-section (12) of Section 143 of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

RISK MANAGEMENT:

The Company has established a strong risk mitigation process which entails regular and stringent monitoring of its business activities to identify, evaluate and resolve risks. The top management of the Company and the Board are involved in monitoring of risk assessment and mitigation, thus ensuring a quick resolution mechanism. The Senior Management prioritizes the risks and finalizes the action plan for mitigation of the key risks.

DISCLOSURE UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION), RULES, 2014:

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration), Rules, 2014 in respect of employees of the Company and Directors is attached as an ‘Annexure D’.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as ‘Annexure E’ to this report.

PERSONNEL:

Information required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2)(i) to (iii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not provided herein, since there are no employee who have received remuneration in excess of the limits prescribed therein.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 & SS-2 on Meetings of the Board of Directors and General Meetings respectively.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE:

Your Company has adopted policy on prevention, prohibition and redressal of sexual harassment at work place, in line of the provisions of the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The policy aims to provide protection to employees at the work place and to prevent and redress complaints of sexual harassment and for matters connected and incidental thereto, with an objective of providing a safe working environment where employees feel secured. The company has not received any complaints during the year.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere appreciation for the steadfast commitment and highly motivated performance by employees at all levels which was instrumental in converting the Company into Profit making as compared with the loss making company through many fold growth during the year as compared to last year. The Directors expect this upward trajectory to continue in the years to come. The Directors also sincerely thank all the shareholders, business partners, government & other statutory bodies, bankers and advisors for their continued assistance, cooperation and support.

For and on behalf of the Board of Directors

RAJKUMAR FORGE LIMITED

Arun Jindal

Place : Pune Chairman

Date : July 21, 2018 DIN : 00121523