41st ANNUAL REPORT...COMPANY WHICH HAVE OCCURRED FROM 01.04.2013 DATE : No material change and commitment have been made by the company from 01.04.2013 to date that has adverse effect

Scooters India Limited(A Government of India Enterprise)

An ISO 9001 Company

41st ANNUAL REPORT2012-13

SCOOTERS INDIA LIMITED

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Contents Page No.

Board of Directors 3

Directors' Report 4

Management Discussion & Analysis 5

Corporate Governance Report 15

Auditors' Report 24

Comments of C & AG u/s 619(4) of the Companies Act. 1956 33

Management Replies to the Auditors' Report 34

Balance Sheet 40

Profit & Loss Statement 41

Cash Flow Statement 42

Accounting Policies & Notes Annexed to and forming part of the accounts 44

Notice 75

SCOOTERS INDIA LTD.Serving the Common man Since 1972


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BOARD OF DIRECTORSFunctional DirectorsShri R.K. Singh, IAS - Chairman & Managing Director w.e.f. 15.05.2013

(Additional Charge)Shri Ajai Kumar - Chairman-cum-Managing Director w.e.f 23.04.2008 to 13.04.2013Shri Rahul Bali - Director (Technical) w.e.f. 02.04.2013Shri P.P. Sarkar - Director (Technical) w.e.f. 16.05.2007 to 15.05.2012GOI, Nominee DirectorsShri Harbhajan Singh, IAS - GOI, Part time official Director w.e.f. 13.09.2011Shri S.K. Goyal - GOI, Part time Non official Director w.e.f. 17.05.2012

M/s Dhirendra Tripathi & Co.,Chartered Accountants,C-121, Indira Nagar,Lucknow-226 016.

M/s Jayaswal Associates,Chartered Accountants,A-160, IInd Floor,Vikas Marg, Shakarpur,Delhi-110 092.

M/s K.S. Karandikar & Co.Chartered Accountants,6, Amit Complex,474-B, Sadashiv PethOpp. New English SchoolTilak Road, Pune-411030

M/s B. Biswas & Co.Chartered Accountants,67/2, East Kapte Para RoadNehru Market, Shyamnagar,24, Pargannas (N)West Bengal-743127

M/s K.S. Ramakrishna & Co.Chartered Accountants,285 & 286, 2nd Floor,Chenoy Trade Centre,'C' Block, Park Lane,Secunderabad-500 003.

INTERNAL AUDITORS

The Delhi Stock Exchange

Association Ltd.,

DSE House,

3/1 Asaf Ali Road,

New Delhi - 110002

Bombay Stock Exchange Ltd.,

1st Floor,

Phiroze Jeejeebhoy Towers,

Dalal Street,

Mumbai - 400001

STOCK EXCHANGES

Statutory AuditorS. Srivastava & Co.Chartered AccountantsC/o Vijay Shankar Mathur2/165, Vijay Khand, Gomti Nagar,Lucknow-226010 (U.P.)

Cost AuditorsShri R. N. TripathiC-121, Indira Nagar,Faizabad Road,Lucknow-226016.

BankersState Bank of IndiaIndian Overseas Bank

Delhi Sales & Liaison Office64-65, Najafgarh RoadIndustrial Area,New Delhi-110015.

Registered Office & WorksLucknow-Kanpur Road,(16th Mile Stone),Post Bag No. 23 (GPO),(P.O.) Sarojini Nagar,Lucknow-226008.

Registrar & Transfer AgentSkyline Financial Services Pvt. Ltd.,D-153,/A, 1st FloorOkhla Industrial Area, Phase-1New Delhi-110020Tel. : 011-26812682, 83 & 84Fax : 011-26812681


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DIRECTORS' REPORT

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 41st Annual Report on the businessand operations of the Company together with the audited Balance Sheet and Profit and Loss Accountand Auditors' Report thereon for the financial year ended 31st March, 2013.

1. PRODUCTION REVIEW :The production performance for the year is shown below in physical terms :

(Nos.)Description 2011-2012 2012-2013Three wheelers 17,512 15,807

2. SALES REVIEW :The Sales performance for the year is shown below :

2011-2012 2012-2013Description Physical Financial Physical Financial

(in Nos.) (` in lakhs) (in Nos.) (` in lakhs)

Three Wheelers 17,584 20,655.36 15,837 19,020.74Spares - 654.37 - 546.27Petrol, Diesel, Lubricants etc. - 1,364.13 - 1,415.25Other Sales - 123.98 - 1.44

TOTAL - 22,797.84 - 20,983.70

3. FINANCIAL REVIEW :The salient features of the Company's financial results for the year under review are as follows:

(` in Lakhs)Description 2011-2012 2012-2013

a) PBDIT (319.12) (281.43)b) Profit before Interest, Depreciation & Exceptional items (2.42) (281.43)c) Profit before Exceptional item (1,677.29) (600.06)d) Profit/(Loss) for the year (1,993.99) (600.06)

During the year under report :(1) The loss before depreciation, interest & taxes have decreased by ` 37.69 lakhs.(2) The loss before depreciation, interest, taxes and exceptional items has increased by ` 279.01

lakhs.(3) The net loss before Exceptional items has decreased by ` 1,077.23 lakhs as compared to the

corresponding previous year.(4) However, the net loss after exceptional items for the year has decreased by ` 1,393.93 lakhs

as compared to the previous year.

4. CONTRIBUTION TO NATIONAL EXCHEQUERThe company has contributed a sum of ` 4,852.12 lakhs to the exchequer during the periodunder review vis-a-vis ` 4,837.65 lakhs during previous financial year.


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5. EXPORTS

The company has achieved exports of ` 38.23 lakhs during the period under review.

6. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY :

An expenditure of ` 10.12 lakhs was incurred on account of advertisement and publicity duringthe year.

7. MATERIAL CHANGES AND COMMIMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED FROM 01.04.2013 DATE :

No material change and commitment have been made by the company from 01.04.2013 to datethat has adverse effect on the financial position. However it is pertinent to note that GOI has videletter no. F. No. 3-33/2009 – PE VI dated 22.02.2013 conveyed that Cabinet has approved therevival package of ` 201.96 crores, which inter-alia includes the infusion of fresh funds, conversionof plan & non plan loan in to equity & waiver of interest and directed for taking necessary approvalfrom BIFR. Since the Draft Rehabilitation Scheme (DRS) was under preparation by OperatingAgency (SBI) and sanction by BIFR was likely to take some time, pending finalization of DRS &sanction by BIFR, SIL filed the Miscellaneous application for seeking necessary permission/appropriate directions for reliefs & concessions enabling conversion of loan in to equity/issue ofshares/reduction of shares capital etc. without further approval of shareholders/CentralGovernment/SEBI/Stock exchanges in terms of provisions of section 81(1A) of the Companies Act,1956, listing agreement, Securities And Exchange Board Of India (Issue of Capital And DisclosureRequirements) Regulations, 2009 and Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulation, 2011, restructuring of balance sheet and forrelease of funds for capital expenditure and working capital in line with the cabinet decision forrevival of SIL. BIFR in its hearing dated June 19, 2013, allowed the Miscellaneous application ofSIL and vide order dated 24.06.2013 issued necessary directions accepting the prayers of SIL.Accordingly SIL has given effect to BIFR order envisaging inter-alia restructuring in share capital &write off of interest on plan & non plan loan against accumulated losses etc. in the annualaccounts for the year ended at 31st March, 2013. The Company has also received interest freeworking capital loan of ` 20 crores from GOI and is expecting release of ` 31.90 crores from GOIout of CAPEX of ` 70.38 Crores approved by GOI.

8. MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Mission, Vision & Objective

Vision To improve the performance of the company so as to be competitive andprofitable through constantly improving existing products, adding newproducts and expanding customer base.

Mission To fulfill customers' needs for economic and safe mode of road transportand quality engineering products through contemporary technologies.

Objective l To sustain production till finalization of revival plan.l To achieve 2% decrease in cost.l Induction of Manpower to fill the gap.l To reduce energy input per unit of production.

(B) MARKET SCENARIO

(i) The total number of 3-wheelers produced and sold in the domestic market by manufacturersin India during the year 2012-13 as against 2011-12 is given below :


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Category Production (In Nos.)

Segment/Sub-segment Apr .11 - Mar.12 Apr .12 - Mar.13

Passenger Carrier 768,687 740,689

Goods Carrier 110,602 99,053

Total : 879,289 839,742

Domestic Sales (In Nos.)

Passenger Carrier 406,260 441,118

Goods Carrier 107,021 97,173

Total : 513,281 538,291

Note : Sales excluding Export of 361,753 Nos. in 2011-12 and 303,088 Nos. in 2012-13.Source-SIAM

Scooters India Limited has been a pioneer in bringing out various models of 3-wheelersrunning on Diesel, Electric, LPG and CNG for application as both passengers and loadcarrier versions. Company has played an important role in popularization of 3-wheelersof larger capacity in the country. With focused efforts and approach, SIL has achieved salesof 15836 nos. in 2012-13. By achieving these sales, SIL has utilized 95.97% of their capacity.This has also resulted in decreasing the SIL market share from 3.43% in 2011-12 to 2.94%in 2012-13.

The company continues to be the leader in larger capacity of vehicles i.e. passenger carrier(6+1) segment and goods carrier exceeding 1 ton of vehicles. The market share of companyis 70.02% in 2011-12 (SIL sales 5,697 nos. out of 8136 nos.)

(ii) 3-Wheeler growth drivers in future are as under :l Rapid development of infrastructure and focus of both Central as well as State Govt. on

infrastructure mainly on roads, the demand of 3-wheeler may see an upward trend in comingyears. The demand driver for 3-wheeler are its affordability as an economical viable transportsolution. However, the demand for 3-wheeler passenger carrier depends on the availabilityof permits issued by Local RTOs.

l Increased demand from semi-urban & rural areas for 3-wheelers because of its highproduct manoeuvrability and drivability.

l Suitability of 3-wheelers for congested Indian roads and tropical conditions.l Self employment opportunity for a large no of youths especially with the Govt. focus on various

schemes for the unemployed youth.l 3-wheeler of smaller capacity are in great demand in load carrier segment because of

increase in organised retail marketing across the country which requires faster andeconomical transportation.

l 3-wheeler is a low cost transport solution to daily commuting passenger. Hence the marketfor 3-wheelers shall continue to be there because of higher cost of transportation in othermodes of transport like taxi, contract carriages, buses etc.

l 3-wheelers are also better earning opportunity for unemployed youth. With a minimumexpenditure i.e. ` 45,000 – ` 50,000 (margin money), one can start earning ` 300 – ` 400per day right from the day one of purchasing a new 3-wheeler.

(C) Resources and Liquidity :

In view of the continuing cash losses, the company's liquidity position was under strain.


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(D) Quality :

Your company is an ISO 9001 : 2000 company. The company has taken several initiativesincluding manufacturing of no problem vehicle and up-gradation of its products to ensurethat the best quality products are made available to its customers. Vehicle reliability hasimproved significantly which has generated goodwill leading to better sales.

(E) Opportunities & Threats :

E.1. Opportunities :

v Growing automobile sector including three-wheelers.

v Untapped markets-Rural, South, West & Exports

v Developing hub and spoke transportation model.

v Increasing allocation of funds for proverty alleviation under various Govt. Schemes likePMRY, SC/ST, NREGA etc.

v Rapidly growing awareness about vehicular pollution leading to policy formulation forincrease use of alternate fuel vehicles.

v Options for technology infusion.

v Rapidly growing network for CNG/LPG supply.

E.2 Threats :

v Increase in product substitution effect by rapidly growing 4 Wheel Small CommercialVehicle.

v Increased competition both from organized and unorganized players.

v Strict enforcement of the pollution norms and Passenger Vehicle permits.

v Increased customer expectations.

v Rising interest and fuel cost could dampen demand for company's products.

v Volatility in Raw Materials prices/input and difficulty in passing on cost increase.

(F) Future Outlook :

i) Challenges faced by the Company :

v The need for consistency in quality demands for enhanced investment in R & D andupgradation of plant & machinery. Existing over-lived plant & machinery is a cause ofconcern.

v Manpower cost in the company is still high and so is the average age profile of theemployees. While your company needs to reduce its manpower cost at the same timeit also needs to infuse fresh blood.

v Retention of young officers who joined in the last couple of years is difficult as private/other PSUs are offering substantially higher remuneration. Young executives are regularlyleaving for greener pastures.

v Though 3-Wheeler as an industry continue to grow but increase in competition andavailability of 4-Wheelers in 1.0 ton and sub 1.0 ton category is expected to aggravatethe extremely competitive scenario and impact the volumes & margins.

v Strict regulatory laws concerning pollution and their strict implementation by banningsale of diesel vehicles in certain states shall act as deterrent for company growth.

v SIL has lesser presence in small 3-wheeler segment which has strong marketpreference. In this segment contribution is lower and competition is higher asestablished players viz. Piaggio, Mahindra etc. dominate the market.


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(ii) Strategic Road Map :

Although there has been negative growth in three wheeler segment of Auto sector in India,the performance of your company has improved considerably in comparison to the previousyear. Monthly production of vehicles has shown significant improvement with highest everproduction achieved during March 2012. Your company is evaluting various new productdevelopment options to cater to various market segments with a view to higher production andsales.

(iii) Status Before BIFR

On 18th February, 2010, BIFR has declared the Company as sick industrial company in termsof the provisions of section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act,1985 (SICA) on reference being made after full erosion of the Networth of the Company, asper annual accounts for the year ended at 31st March, 2009. Last meeting of BIFR was heldon 19th June, 2013, wherein BIFR approved the miscellaneous application filed by the Companyfor seeking necessary permission/appropriate directions for reliefs & concessions enablingissue of shares, restructuring of balance sheet and for release of funds for capital expenditureand working capital in line with the cabinet decision for revival of SIL. Draft rehabilitation scheme(DRS) shall be submitted by State Bank of India (Operating Agency) shortly for approval by BIFR.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Your company is ISO 9001: 2000 certified which focuses on quality management system.

Information in accordance with provision of Section 217(1)(e) of the Companies Act, 1956 regardingthe conservation of energy, technology absorption and foreign exchange earnings and outflow aregiven in Annexure-I, I-A and I-B to this report.

10. PARTICULARS OF EMPLOYEES:

Information under Sec. 217(2-A) of the Companies Act, 1956 read with the Companies (Particularsof Employees) Rules, 1975 be treated as NIL as none of the employee of the company is gettingsalary more than the prescribed limit.

11. INDUSTRIAL RELATIONS:

During the year under review the industrial relations in the Company improved with the cabinetapproval inter-alia for enhancement of the superannuation age from 58 years to 60 years inrelaxation of DPE Guidelines. The implementation of 2002 negotiated pay scales for workmen,who are on the rolls of SIL as on 01.04.2013, reduced the discontentment amongst workmen andimproved the morale.

12. VIGILANCE:

Vigilance Group continues to function with particular emphasis on the aspects of preventive andcorrective vigilance. Strict vigil was exercised over various activities as part of Preventive Vigilancemeasures and suggestions were made to Management for system improvement. Companyalso observed Vigilance Awareness Week from October 29, 2012 to November 03, 2013.

13. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands thatwithout their motivation and development Company can not progress. The Company has beenanalyzing developmental needs in technical and managerial areas and provides requisite trainingand exposure to the employees at all levels in the area on Professional Excellence throughMotivation, Advance Engine Combustion & Diagnostics, Competence Building for EffectiveManagement, Healthcare Services, Part Programming for CNC Machines, Leadership Strategiesfor Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety,Environment Protection through Legal Reforms & technological Innovations, Building & Leading


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Effective Teams, Safety Engineering & Management, Value Based Management, Legal frameworkfor Cost Audit Compliances, Cost Accounting Record Rules 2011 & Cost Audit Report Rules 2011,Finance for Non-finance Executives, International Commercial Practices, Energy Conservation,House Keeping etc.

14. HINDI IMPLEMENTATION:

Official Language Implementation Committee monitors and reviews the progress ofimplementation of the Annual Programme issued by Department of Official Language, Ministry ofHome Affairs, Government of India. Hindi Divas is commemorated every year by observing officiallanguage week in the month of September. Various competitions are organized for employeesand winners are felicitated on Republic Day.

15. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

As on 31.03.2013 the total strength of the company is 612. Out of these, 143 employees belongto Scheduled Castes and 01 employee to Scheduled Tribe.

16. DIRECTORS:

The tenure of Shri Ajai Kumar as Chairman cum Managing Director of the Company came to anend w.e.f. 13.04.2013. Shri R K Singh, Jt. Secretary, Department of Heavy Industries, Ministry ofHeavy Industries & Public Enterprises, Government of India has been given Additional charge asChairman & Managing Director w.e.f. 15.05.2013. Tenure of Shri P P Sarkar, Director (Technical)came to an end on 15.05.2012 and Shri Rahul Bali has been appointed as Director (Technical)w.e.f. 02.04.2013. The Company has taken up the matter with Ministry for filling up the vacantpositions of Independent Directors as well as Director (Finance) on the Board.

The Board records the appreciation for contribution made by aforesaid Directors during hisassociation with the Company.

17. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect toDirectors’ Responsibility Statement, it is hereby confirmed:

a) That in the preparation of the accounts for the financial year ended 31st March 2013, theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

b) That the Directors have selected such accounting policies and applied them consistently andmade judgements and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for the year under review;

c) That the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) That the Directors have prepared the accounts for the financial year ended 31st March 2013 ona ‘going concern’ basis.

18. ADEQUACY OF INTERNAL CONTROL:

The Company has proper and adequate system of internal controls to ensure that all activities aremonitored and controlled against any unauthorized use of disposal of assets, and that thetransactions are authorized, recorded and reported correctly.

The Company ensures adherence to all internal control policies and procedures as well ascompliance with all regulatory guidelines.


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19. FIXED DEPOSITS:

The Company has not accepted any deposits under Companies (Acceptance of Deposit) Rules,1975 during the year.

20. STATUS OF REPAYMENT OF LOAN FROM GOI

In terms of Cabinet approval the existing term Plan & non plan Loan as of 31st March, 2012 of `85.21 crores (Plan loan - ` 1.93 Crores & non plan – 83.28 Crores) of has been converted intoequity share capital of ` 85.21 crores by issue of 8.52 crores equity share of ` 10 each at par andfurther the Equity Share Capital of the Company has been reduced by ̀ 85.21 crores by cancellationof aforesaid ` 85.21 crores equity share capital held by the Government of India in terms of BIFRorder dated 24.06.2013. The existing Interest Accrued as on 31 March, 2012 amounting to` 2,637.60 Lacs on GOI loan (Plan loan of ` 193 lacs & Non plan loan of ` 8328 lacs) has beenwritten off against accumulated losses and no further interest has been provided for on theaforesaid loan from 31st March, 2012 onwards. No provision of interest on Non Plan Loan of `189 lacs released during the financial year 2012-13 has been made.

21. AUDITORS’ REPORT:

M/s S. Srivastava & Co., Chartered Accountants have been appointed by the Comptroller andAuditor General of India, as Statutory Auditors of the Company for the year 2012-13. The StatutoryAuditors’ Report on the Accounts of the Company for the financial year ended 31st March 2013alongwith Management replies are enclosed at Annexure – III .

The Accounts of the company were submitted to the Comptroller & Auditor General of India for theirreport under Section 619(4) of the Companies Act 1956 and their report is appended as Annexure-IV .

22. COST AUDITOR:

Shri R.N. Tripathi, Cost Accountant, Lucknow has been appointed as Cost Auditor of the Companyby the Govt. of India, Ministry of Corporate Affairs, for auditing cost records relating to manufactureof Motor Vehicles for the financial year ending 31st March 2013.

23. CORPORATE GOVERNANCE:

A Certificate from M/s S Srivastava & Co, Auditors of the Company regarding compliance of conditionsof Corporate Governance as stipulated under Clause 49 of the Listing Agreement along with thereport on Corporate Governance is attached as Annexure – II to this report.

24. ACKNOWLEDGEMENT:

The Board of Directors would like to express their grateful appreciation for the sincere support andco-operation extended by its Bankers, Financial Institutions, Dealers and Suppliers. The Directorswould also like to express their sincere thanks for the co-operation and advice received from Govt.of India, particularly, Deptt. Of Heavy Industry and Public Enterprises, BIFR, BRPSE, the State Govt.and the local authorities for their continued support, co-operation and guidance.

Your Directors wish to place on record their deep sense of appreciation for the devoted servicesof employees and are deeply grateful to the shareholders for reposing the confidence and faith inus.

For and on behalf of the Board

R K Singh Chairman & Managing Director

Place : New Delhi

Date : August 23, 2013


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ANNEXURE - II. CONSERVATION OF ENERGY :

(a) Measures being taken

Compressors

v Stopping wastage of compressed air.

v Periodic servicing of suction filters, moisture traps, unloader and delivery valves.

Water

v Monitoring of control of water wastage.

v Recycling of cooling water.

Power

v Control of maximum demand in peak hours.

v Monitoring and control of power factor on regular basis and power factor improved

by 0.01 approx.

v Monitoring and control of electricity consumption in different sections of the plant.

v By using low consumption accessories and equipments.

v Full capacity utilization of ovens and furnaces.

(b&c) Impact of Energy Consumption Measures , Total energy consumption and

energy consumption per unit of production as per Form 'A' in respect

of industries specified in the scheme thereto.

The details are given in attached Annexure I-A.

II. TECHNOLOGY ABSORPTION :

Efforts made in technology absorption as per Form-B attached as Annexure I-B.

III. FOREIGN EXCHANGE EARNINGS AND OUTGO :

(a) Efforts and initiative in relation to exports :

Foreign exchange earned by way of export of goods is ` 30.19 lakhs in

2012-13 as compared to ` 49.93 lakhs during previous year.


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ANNEXURE - IAForm - A

Form for Disclosure of particulars with respect to Conservation of Energy.

Description 2011-2012 2012-2013

A. Power and fuel consumption1. Electricity

a) PurchasedUnit* 65,59,200 60,82,000Total Amount (`) 3,49,71,689 4,03,18,563Rate / Unit (`) 5.3317 6.629162

b) Own Generationi) Through Diesel Generator Unit* 200 3860

Units per litre of diesel oil 0.3356 1.4582Cost / Unit (`) 126.71 34.34

ii) Through Steam Turbine / Gen. N.A. N.A.Unit* NIL NILUnit per litre of diesel oil NIL NILCost / Unit (`) NIL NIL

2. Coal N.A. N.A.Quantity (Ton) NIL NILTotal Cost NIL NILAverage rate NIL NIL

3. (a) Furnace OilQuantity (Ton) 47.440 57,830Total Amount (`) 2,191,750.00 24,61,999.00Average Rate per Kg. (`) 46.20 42.59

(b) Light Diesel OilQuantity (Kilo litres) 84.00 96.00Total Amount (`) 4,831,145 60,42,402Average Rate per Kg. (`) 57.51 63.17

4. Others / Internal generation N.A. N.A.(Please give details)

Quantity NIL NILTotal cost NIL NILRate / Unit NIL NIL

B. Consumption per unit of production

Description Standards 2011-2012 2012-2013(if any)

Production (in Nos.) - 17,512 15,807Electricity (Unit) - 374.566 384.7662Furnace oil (Ton) - 0.31 -Light Diesel oil (Kilo litres) - 0.00526 -Coal (Specify quality) - NIL NILOthers (Specify) - NIL NIL

*Unit denotes KWH


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Annexure I-B

1. Specific areas in which R&D carried out

by the company

2. Benefits derived as a result of the above

R&D

3. Future plan of action

4. Expenditure on R&D

A) Capital

B) Recurring

C) Total

D) Total R&D expenditure as a

percentage of total turnover

l Upgradation of lighting system

l Development of design and prototype of new

aluminum die cast wet clutch system.

l Development of concept small 3-seater soft top

3-wheeler for passenger carrier application.

l Legislative compliance of modification and

conformation of performance as per CMVR

l Constant upgradation of products through

CMVR compliance

l All 3-wheelers models Type approved for

upgraded lighting system.

l Commonisation/standardization of development

upgrades in several models.

l Improved product performance and reliability

through upgradation of systems like braking,

clutch, suspension, styling etc.

l To develop small 3-wheeler for commercial

application for CNG operation in front/rear

mounted engine configuration

l Consider development of small 4-wheeler for

commercial application in association with

Design Houses/Jv.

NIL

` 10,62,000/-

` 10,62,000/-

0.05%

Form - BForm for disclosure of particulars with respect to technology absorption

Research and Development (R&D)


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1. Efforts, in brief, made towards

technology absorption, adaptation and

innovation

2. Benefits derived as a result of the above

efforts e.g. product improvement, cost

reduction, product development, import

substitution etc.

3. In case of imported technology (imported

during the last 5 years reckoned from the

beginning of the financial year),

following information may be furnished:

A) Technology imported.

B) Year of import.

C) Has technology been fully

absorbed?

D) If not fully absorbed, areas

where this has not taken place,

reasons therefore and future

plans of action.

Officers and staff of R&D have been sponsored for

training programmes attending seminars, courses,

interactive sessions etc. relating to technology

absorption and innovation.

Associative R&D has been carried out with different

organizations and design houses like ARAI etc. for

improvement, development and product innovation.

Development of concept small 3-seater soft top

3-wheeler for passenger carrier application and

improvement in reliability and performance of

existing products.

Nil

Technology absorption, adaptation and innovation


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CORPORATE GOVERNANCE

The Company's philosophy of Corporate Governance is aimed at safeguarding and adding valueto the interest of its various stakeholders including that of shareholders, lenders, employees andpublic at large. SIL is committed to good Corporate Governance to ensure that all functions of theCompany are discharged in professionally sound and competent manner. SIL has also adoptedthe Guidelines issued by DPE on Corporate Governance.

1.A) SIL’s PHILOSOPHY ON CORPORATE GOVERNANCE

Over the past few years, the transition in the Indian business environment, coupled withliberalization and changing market conditions, has led to a fundamental shift in theManagement’s approach to enhancing shareholder value. In this context corporate governancehas attained paramount importance for ensuring fairness, transparency, accountability &responsibility to all stakeholders. Company believes that all its operations and actions mustserve the underlying goal of enhancing overall shareholder value over a sustained period oftime.

B. Code of Business Conduct & Ethics

The Board of Directors of the company have adopted a Code of Conduct and Ethics forDirectors and Senior Management incorporating best practices in Corporate Governance.The Code is also available on website of the company www.scootersindia.com. In terms ofClause 49 of the Listing Agreement a confirmation from the CMD/CEO and CFO regardingcompliance with the code by all the Directors and Senior Management is given in Annexure.

C. Whistle Blower Policy

Scooters India Limited has formulated a Whistle Blower Policy to establish procedures forthe submission of complaints or concerns regarding financial statement disclosures,accounting, internal accounting controls, auditing matters or unethical behaviour, actual orsuspected fraud or violations of the Company's Code Conduct.

D. CEO/CFO Certification

In terms of Clause 49 of the Listing Agreement the Certification by CMD/CEO and CFO of thefinancial statment has been obtained and attached as Annexure.

E. Compliance Certificate of the Auditors

Scooters India Limited has annexed to this report a certificate obtained from the StatutaryAuditors, M/s S. Srivastava & Co., Chartered Accountants regarding compliance of conditionsof Corporate Governance as stipulated in clause-49 of the Listing Agreement.

2. BOARD OF DIRECTORS

The Board of Directors of the Company as on 31.03.2013 is comprised of four directors-twofunctional & two nonfunctional. Functional Directors include Chairman & Managing Director& Director (Technical) & non functional directors include one part time official Director & onepart time non official director, nominated by Government of India.

Annexure - II


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A) List of Directors

Name of Director Tenure No.of No. of otherother committee ship

Directorship

Member Chairman

Whole time Functional Director

Shri R.K. Singh, IAS, CMD 15.5.2013 till date 5 - -

Shri Rahul Bali, Director (Technical) 02.04.2013 till date - 1 -

Shri Ajai Kumar, CMD 23.04.2008-13.04.2013 1 3 -

Shri P.P. Sarkar, Director (Technical) 16.05.07 -15.05.2012 - 2 -

Part-time Non Executive Director (Official)

Shri Harbhajan Singh, IAS, 13.9.2011 till date 7 - -Director, GOI Nominee

Part time Non Executive Director

Shri Suresh Kumar Goyal (Non official) 17.05.2012 till date 4 3 -

The matter of induction of independent director on the Board has been taken up with the Govt.of India.

B) Presence of Directors in Board Meetings and Annual General Meeting held duringthe year.

Sl. Name of BM BM BM BM BM AGMNo. Directors dated dated dated dated dated dated

15.5.12 14.6.12 8.11.12 21.1.13 12.2.13 29.9.12

Total Strenghth 3 3 3 3 3 3

1. Shri Ajai Kumar P P P P P P

2. Shri Harbhajan Singh P P P P P -

3. Shri S.K. Goyal - P P P P -

4. Shri P.P. Sarkar P - - - - P

P = Present, A = Absent, NA = Not Applicable

There has not been a gap of over four months between two Board Meetings and at least oneBoard Meeting was held in each quarter of the financial year.


17

C. Information supplied to the BoardThe board is presented with all the relevant information on various vital matters affecting theworking of the company, as well as those that require deliberation at the highest level. Extensiveinformation is provided on various critical items such as :v production, sales and capital expenditure budgets and updates.v sales, investments and financial performance statistics.v review of zone-wise business.v quarterly results of the company,v staff matters, including senior officers appointments and extensions,v legal proceedings by or against the company including show cause demands,notices etc.v share transfer and demat compliance,v minutes of meetings of Audit Committee and other Committees of the Directors.v R & D efforts of the company,v labour matters and human resources issues,v any material default in financial obligation to and by the company or substantial non-

payment for goods sold by the company,v vigilance and related matters,v write-off and disposal of capital items,v legal compliance reporting system and other such matters,v fatal or serious accidents dangerous occurrence, any material effluent or pollution

problems,v transactions involving payment towards goodwill, brand equity or intellectual property,

3. COMMITTEES OF THE BOARDA. Audit Committee & Shareholders/Investors Grievance Committee

In view of absence of Independent Directors on the Board of the Company, the Company ispresently not having functional Audit/Shareholders/Investors Grievance Committee. TheCompany has taken up matter regarding the appointment of Independent Directors on theBoard, with the Government of India, accordingly the Committees shall be constituted againafter their appointment.

B. Share Transfer CommitteePresent Composition of Share Transfer Committee is :

1. Shri R.K. Singh, CMD

2. Shri Rahul Bali, Director (Tech.)

3. Shri B.N. Raj, Financial Controller

Company Secretary acts as Secretary to the Committee4. General Body Meetings :

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

Year Location Date Time2009-2010 Gandhi Bhawan, Prekshagrih, Lucknow 27th Sept., 2010 3.00 p.m.2010-2011 Gandhi Bhawan, Prekshagrih, Lucknow 30

th Sept., 2011 3.00 p.m.

2011-2012 Gandhi Bhawan, Prekshagrih, Lucknow 29th Sept., 2012 3.00 p.m.


18

5. Remuneration policy :The following are the details of the remuneration paid to Directors for the year 2012-13 :

(Amount in `)

Name Design ation Sitting Salary Benefits & Total& Fee Contribution

Period to PF/Pension/Others

Sri Ajai Kumar CMD - 10,56,366 1,21,310 11,77,676Sri P. P. Sarkar Director (Tech.) - 72,476 9,879 82,355

Total : 11,28,842 1,31,189 12,60,031

Apart from the Sitting Fees which is paid in accordance with the Articles of Association of thecompany, all other remuneration paid to Directors are in compliance with Govt. orders issuedfrom time to time.

6. General Shareholder Information:

Annual General Meeting :

Date and Time : 30th September, 2013 at 3.00 p.m.

Financial Calender : 1st April, 2012 to 31st March, 2013

Venue : Kisan Mandi Bhawan Auditorium, Vibhuti Khand,Gomti Nagar, Lucknow-226 010, Uttar Pradesh

Book Closure date : 23rd September, 2013 to 30th September, 2013.

Listing of Equity : BSE, DSE

Stock code : 505141

Special Resolution (if any) & Postal Ballot :

AGM Date Special Whether Put Through Details Person WhoResolution Postal Ballot of Voting Conducted

Pattern Postal Ballot 27.9.2010 ONE No N.A. N.A.

30.9.2011 ONE No N.A. N.A.

29.9.2012 TWO No N.A. N.A.

- Procedure for Postal Ballot is as per the guidelines.- No Special Resolution is proposed to be conducted through Postal Ballot.


19

Registrar & Transfer Agent : Sky Line Financial Services Private LimitedD-153/A, Ist Floor, Okhla Industrial Area,Phase-1, New Delhi-110020

Dematerialization of Shares : CDSL - 3,27,783As on 31.03.2013 : NSDL - 9,17,223

Outstanding GDR / ADRs / : NILWarrants or any ConvertibleInstruments, Conversion Date andlikely impact on Equity

Plant Location : Lucknow- Kanpur Road (16th Mile Stone), Post Bag No. 23 (G.P.O) P.O. Sarojini Nagar, Lucknow-226 008.

Address for Investor : Lucknow- Kanpur RoadCorrespondence (16th Mile Stone), Post Bag No.23 (G.P.O)

P.O. Sarojini Nagar, Lucknow-226 008.


20

Stock PricesScript Code : 505141Company : SCOOTERS INDIA LTD. For the period : April, 2012 to March, 2013

Months Open High Low Close No.of No.of Total Turnover *Spread ( `)Price Price Price Price Shares Trades (`) H-L C-O

April 12 33.80 34.95 31.70 33.20 38.421 327 12,69,028 3.25 -0.60

May 12 33.05 33.80 25.25 25.90 54.919 422 15,91,190 8.55 -7.15

June 12 25.95 29.00 24.65 27.00 23,836 214 6,22,495 4.35 1.05

July 12 29.40 33.50 26.00 27.95 27,269 331 8,18,811 7.50 -1.45

August 12 27.95 31.50 25.70 27.40 29,243 298 8,23,234 5.80 -0.55

September 12 28.75 30.40 26.70 28.60 20,520 161 5,84,772 3.70 -0.15

October 12 29.55 30.35 25.55 25.55 20,749 170 5,78,737 4.80 -4.00

November 12 26.70 27.35 24.10 24.90 26,970 280 6,81,065 3.25 -1.80

December 12 24.75 29.40 24.75 27.05 26,854 233 7,38,292 4.65 2.30

January 13 26.10 42.05 26.10 36.55 5,99,846 3,101 2,31,65,130 15.95 10.45

February 13 38.35 40.25 25.90 26.25 68,570 521 23,40,353 14.35 -12.10

March 13 25.70 26.00 17.95 18.95 34,552 287 7,95,772 8.05 -6.75

* Spread H-L-> High-Low C-O - > Close - Open

7. Disclosures:

a) Disclosures on materially significant related party transactions i.e.transactions of the Company of material nature, with its promoters, the directorsor the management, their subsidiaries or relatives etc. that may have potentialconflict with the interests of the company at large.

Company had no related party transaction except remuneration paid to the Directors.

b) Details of non-compliance by the Company, penalties, structures imposed on theCompany by Stock Exchanges or SEBI, or any statutory authority, on any matterrelated to capital markets, during the last 3 years.

None

c) No person has been denied access to Audit Committee

8. Means of communication:

a) Quarterly Results The Company has published quarterly(Approved in the meetings held on results in Rastriya Swarup, Fin. Express13.08.12, 08.11.12, 12.02.13 & 28.05.13) & Business Standard

b) Management Discussion and Analysis This forms part of the Directors’ Report,which is posted to the Shareholders of theCompany.

c) Web Site www.scootersindia.com


21

10. Distribution of shareholding as on March 31, 2013

Shareholding of Share Holders Share Amount in RupeesNominal Value

Category Number % Physical NSDL CDSL TOTAL %Upto 500 8500 94.76 587859 249191 112281 949331 1.75501 - 1000 294 3.28 62950 135397 54149 252496 0.461001 - 2000 94 1.05 41050 72125 29853 143028 0.332001 - 3000 29 0.32 13600 39053 20718 73371 0.143001 - 4000 18 0.20 3700 40793 21102 65595 0.124001 - 5000 08 0.09 4350 28142 4300 36792 0.065001 - 10000 12 0.13 25800 54019 10000 89819 0.1610001 and above 15 0.17 51495490 294096 82237 51871823 96.98

TOTAL 8970 100.00 52234799 912816 334640 53482255 100.00

Category Percentage

1. Central Government 96.282. Nationalized Banks & Financial Institutions 0.043. Corporate Bodies 0.334. Indian Public and Others 3.35

Total 100.00

11. Any Query on the Annual Report : Secretarial Department,Scooters India Limited,Lucknow - Kanpur Road,(16

th Mile Stone), Post Bag No. 23 (G.P.O.),

P.O. Sarojini Nagar, Lucknow-226 008.

R.K. Singh, IASChairman and Managing Director

Scooters India Ltd.Lucknow-226 008

9. Share Transfer System

The Company has signed agreement with both NSDL and CDSL on 18th Jan, 2002 and 25th

Feb.2002 respectively. The company has been allotted ISIN Code No. INE 959E01011 andsince then the trading of company's shares is being done in dematerialized form. The companyhas appointed M/s Skyline Financial Services Pvt. Ltd. D-153/A, 1ST FLOOR OKHLAINDUSTRIAL AREA PHASE - 1, NEW DELHI-110020, as its Registrar and Transfer Agent(RTA).


22

Certification in terms of clause 49 of the Listing Agreement

1. We have reviewed financial statements and the cash flow statement for the year 2012-13and that to the best of our knowledge and belief :

i) These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

ii) These statements together present a true and fair view of the company's affairs andare in compliance with existing accounting standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by thecompany during the year which are fraudulent, illegal or violative of the company's code ofconduct.

3. We accept responsibility for establishing and maintaining controls and that we have evaluatedthe effectiveness of the internal control systems of the company and we have disclosed tothe auditors and the Audit Committee, deficiencies in the design or operation of internalcontrols, if any, of which we are aware and the steps we have taken or propose to take torectify these deficiencies.

4. We have indicated to the auditors and the Audit Committee :

(i) significant changes in internal control during the year ;

(ii) significant changes in accounting policies during the year and that the same havebeen disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which we have become aware and the involvementtherein, if any, of the management or and employee having a significant role in thecompany's internal control system.

5. We confirm that all Directors and Members of the Senior Management have affirmedcompliance with SIL's Code of Business Conduct & Ethics.

B.N. Raj R. K. SinghFinancial Controller CMD / CEO

Place : New DelhiDated : August 23, 2013

Annexure II-A


23

CERTIFICATE

TO THE MEMBERS OF SCOOTERS INDIA LIMITEDON

CORPORATE GOVERNANCE

We have examined the compliance of conditions of Corporate Governance by Scooters India Limitedfor the year ended 31st March, 2013 as stipulated in Clause 49 of the Listing Agreement of the saidCompany with Stock Exchange.

The compliance of conditions of Corporate Governance is responsibility of the management. Ourexamination was limited to a review of the procedures and implementation thereof adopted by theCompany for ensuring the compliance of the conditions of the Corporate Governance as stipulatedin the said Clause. It is neither an audit nor an expression of opinion on the financial statementsof the Company.

In our opinion and to the best of our information and according to the explanations given to us, wecertify that the Company has complied with the conditions of Corporate Governance as stipulatedin the above mentioned Listing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India, wehave to state that no investor grievances were pending for period exceeding one month as at 31st

March, 2013 against the Company as per the records maintained by the Company.

We further state that such compliance is neither an assurance as to the further viability of theCompany nor the effectiveness with which the management has conducted the affairs of theCompany.

For S. Srivastava & Co.Chartered Accountants

Place : LucknowDate : August 23th, 2013

Sanjeev SrivastavaPartner

M.No. 073449

ANNEXURE - II-B


24

REVISED INDEPENDENT AUDITOR REPORTTO THE MEMBERS OF SCOOTERS INDIA LIMITED, LUCKNOW

This Revised Audit Report is issued in supersession of our earlier Audit Report dated 15th July2013, in accordance with format prescribed in SA 700, (Revised) issued by “The Institute ofChartered Accountants of India”. Further we confirm that there is no change in the opinion asexpressed earlier and also none of the findings, facts and figure have undergone changed inthe financial statement of the company as at March 31, 2013.

Report on the Financial Statements

1. We have audited the accompanying financial statements of Scooters India Limited(“the Company”), which comprise the Balance Sheet as at March 31, 2013, the Statementof Profit and Loss and the Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Management is responsible for the preparation of these financial statements thatgive a true and fair view of the financial position, financial performance and cash flows ofthe Company in accordance with the Accounting Standards referred to in Section 211(3C)of the Companies Act, 1956 (“the Act”) and in accordance with the accounting principlesgenerally accepted in India. This responsibility includes the design, implementationand maintenance of internal control relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from material misstatements,whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India. Those Standards require that we complywith the ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend onthe auditor’s judgment, including the assessment of the risks of material misstatementof the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers the internal control relevant to the Company’spreparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by Management, as well as evaluating the overall presentation of thefinancial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Annexure III


25

Opinion

6. In our opinion and to the best of our information and according to the explanations givento us, the financial statements give the information required by the Act in the manner sorequired and subject to:

(i) Para no. 3 of Note no.1, regarding non provision of depreciation on assets whichhave been declared as surplus.

(ii) Para no 7 of Note no.1 regarding adhoc provision of 0.5% on the value of closingstock of raw material and components, stores, spares & consumables forredundancy.

(iii) Para no 15 of Note no.1 regarding valuation of job done for internal use on technicalestimate of material than the actual cost incurrence.

(iv) Para no. 16 of Note no.1, regarding non provision of deferred tax on account oftiming difference between taxable income and accounting income is providedconsidering the tax laws enacted or substantively enacted up to the BalanceSheet date.

(v) Para 17 (i) (A) of Note no.1,regarding non consideration of obligations of variousshow cause notices issued by government authorities the amount of which hasneither been considered as disputed obligation nor as contingent liabilities andits consequent effect over the profitability/ loss of the company.

(vi) Note no. 13 regarding deferred tax Assets aggregating of Rs. 4142.69 lakhshas not been recognized by the company in financial statements of currentyear.

(vii) Note no. 15 regarding inclusion of Stock lying with Third Party/Contractors to thetune of ̀ 68.57 lakhs in inventories against which company have no security andits consequent effect over the profitability/ loss of the company.

(viii) Note no. 16(a) regarding realization of outstanding of ̀ 85.65 lakhs from AmausiMotors in pursuant to phased arrangement entered into by the company forliquidating the outstanding balance and its consequent effect over the profitability/loss of the company.

(ix) Note no. 22 regarding consumption of material is not accounted for on actualconsumption basis but taken as a differential/ balancing quantity of stock asOpening stock plus purchases deducted by closing stock and its consequentadjustment of abnormal loss (if any) into consumption.

(x) Note no.27 regarding non provision of payment of arrears amounting to`269 lakhs to the workmen who were on roll of the company as on 01.08.2004.

(xi) Note no. 30(i)(a) regarding contingent liability of 11 cases of consumer forum(estimated amount of ` 13 lakhs) and 73 other cases (The amount of which isindeterminate.) and its consequent effect over the profitability/ loss of the company.

(xii) Note no.30(i) ( c ) regarding contingent liability of cases of private parties of`122.91 lakhs and its consequent effect over the profitability/ loss of the company.


26

(xiii) Note no. 30(i)(d) regarding contingent liability of ` 431.65 lakhs in connectionwith guarantee/indemnity given by Company to OBC against which Writ Petitionhas been filed before High Court, Lucknow Bench and its consequent effect overthe profitability/ loss of the company

(xiv) Note no. 30(i) ( e) regarding non recognition of liability of ` 27.34 lakhs onaccount of Demand of ESI, the appeal of which is pending before Allahabad HighCourt, Lucknow bench and its consequent effect over the profitability/ loss of thecompany.

(xv) Note no. 30(i) (f) regarding non recognition of liability of ` 213 lakhs raised byPunjab national bank on account of indemnity provided by the company for loanavailed by UP tyres/tubes. The case is pending with DRT Lucknow and itsconsequent effect over the profitability/ loss of the company.

(xvi) Note no. 30(i) (g) regarding non recognition of liability of ̀ 74.23 lakhs plus interest& further penalty (indeterminate) on account of demand notice raised by CentralExcise and Service Tax authority and its consequent effect over the profitability/loss of the company.

(xvii) Note no. 30(ii) regarding non recognition of liability of ̀ 23.85 lakhs plus interestthereon on account of unfavourable arbitration in the matter of Ordinance FactoryBoard and its consequent effect over the profitability/ loss of the company.

(xviii) Note no. 30(iii) on account of non recognition of counter claim of UPSIC as liabilityof ̀ 9.27 lakhs plus interest thereon and its consequent effect over the profitability/loss of the company.

(xix) Note no. 30(iv) regarding cases pending of 36 employees in labour courts and 110other cases pending in other courts, the amount of which is indeterminate and itsconsequent effect over the profitability/ loss of the company.

(xx) Note no. 30(v) on account of non recognition of Recovery Notice of TehsildarLucknow, for recovery of ` 2412 lakhs which is pending with High CourtLucknow Bench and its consequent effect over the profitability/ loss of thecompany.

(xxi) Note no 30 (vi) on account of demand of ` 2936.96 lakhs raised by NagarNigam Lucknow against house tax liability, against which company hasmade no provision and its consequent effect over the profitability/ loss ofthe company.

(xxii) Note no. 31 regarding non recognition of liability for pending UPVAT & CST casesfor the F.Y 2010-11 onwards and its consequent effect over the profitability/ lossof the company.

(xxiii) Note no. 32 regarding non confirmation of most of the balances of Debtors/ Creditorsaccounts claims recoverable, loans and advances material lying with third parties,various deposits to electricity, custom, court, land lord and other parties and theconsequent effect on the book balance and the actual balance over the profitability/loss to the company.

(xxiv) Note no. 33 regarding non recognition of liability on account of nonpaymentof lease rent to M/s Ganesh Flour Mills Ltd. (now HVOC Ltd.) from 1982-83onwards and its consequent effect over the profitability/ loss of the company.


27

(xxv) Note no. 38 regarding approval of revival package of ` 20196 lakhs by cabinetcommittee of GOI and acceptance of Miscellaneous application by BIFR forearly implementation of it on June 19, 2013, and its implementation withretrospective effect 31.03.2013, without finalization of “Draft RehabilitationScheme” (DRS) by the operating agency (SBI).

7. Subject to the observation given as per no. (i) to (xxv) referred to above we report that;

(i) In absence of the certainty of the estimates of amount involved in various legalcases, we are unable to comment upon the correctness of amount of the Contingentliabilities as given in Note no. 30 and its consequent effect over the profitability/losses of the company.

(ii) The company should take stringent action for recovery of outstanding/ Recoverableamount against which 100% provisioning has already been made in the earlieryears by deciding an approved policy for the same.

(iii) The Royalty recoverable from Fine White Line Limited (FWL) till 31.03.2012amounting ` 91.57 lakhs ( ` 30.37 lakhs for F.Y.2010-11 and ` 61.20 lakhs forF.Y. 11-12), against which company has spent ` 98.49 lakhs. ( ` 59.35 laks inF.Y.12-13, ` 34.02 lakhs. in F.Y. 11-12. and ` 5.12 in F.Y 10-11,) thereby spend` 6.92 lakhs more than amount recoverable and entire amount of ` 91.57lakhs provided in the books and is still recoverable , thereby added `190.06lakhs loss to the company.

(iv) There is unfunded liability of `190.10 lakhs on account of retirement benefitaccording to Actuarial Valuation.

(v) The company is required to maintain the cost record for the manufacturingprocess but does not maintain the cost of material consumed on actualconsumption basis, instead accounted for the difference of Inventory as“presumed to be consumed “against production cost of unit produced,resultantly all the normal and abnormal losses (if any) are adjusted in theproduction cost.

(vi) The company has implemented the restructuring as per the approval of revivalpackage of government of India of ` 20196 lakhs after the sanction of BIFRon June 19 June 2013, whereas draft Rehabilitation scheme(DRS) is underpreparation by the operating agency (SBI) and has not been submitted toBIFR for sanction.

(vii) The company has in pursuance to comply the approval of implementation ofBIFR dated 19.06.2013 increased its authorized capital from 7500 lakhs to25000 lakhs, retrospectively w.e.f. 31.03.2013 and amended its financialstatement accordingly, considering section 18 and 32 A of the Sick IndustrialCompanies (special provision) Act, 1985 overriding the provision of companiesact 1986 and SEBI (ICDR) Regulation 2009 and other process of law.

(viii) The company has converted plan and non-plan loan of government of indiaof ` 8521.12 lakhs into equity share capital and further adjusted the sameamount of ` 8521.12 lakhs against accumulated losses of the company byreduction of share capital, simply on the basis of sanction of miscellaneous


28

application by BIFR, without submission of the “draft rehabilitation scheme”by the Operating Agency (SBI) to BIFR.

(ix) The company has waived and written off Interest accrued & due as on31.03.2012 of ` 2217.38 lakhs and Interest accrued but not due as on 31.03.2012of ` 420.22 lakhs, simply on the basis of sanction of miscellaneous applicationby BIFR, without submission of the “draft rehabilitation scheme” by theOperating Agency(SBI) to BIFR.

(x) The company has not made any provision for income tax on account ofwaiver of interest accrued and due as on 31.03.12 of ` 2217.38 lakhs andinterest accrued but not due as on 31.03.12 of ` 420.22 lakhs claimed asexpenses as early years, but written off during the current year.

Give a true and fair view in conformity with the accounting principles generally accepted inIndia:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit/(loss) of the Companyfor the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

Report on Other Legal and Regulatory Requirements8. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by

the Central Government of India in terms of Section 227(4A) of the Act, we give in theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

9. As required by Section 227(3) of the Act, we report that:(a) we have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit;(b) in our opinion, proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books;(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt

with by this Report are in agreement with the books of account;(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow

Statement comply with the Accounting Standards referred to in Section 211(3C) ofthe Act.

(e) As per the Notification No. GSR 829 (E) dated 21.10.2003 issued by the Departmentof Company Affairs; disqualification of Directors in term of clause (g) of sub-section(1) of Section 274 of the Companies Act, 1956 is not applicable to the companybeing a Government Company.

For, S. Srivastava & Co.Chartered Accountants

Place: LucknowDate: 22nd July 2013


M.No-073449


29

ANNEXURE TO INDEPENDENT AUDITORS’ REPORT OF SCOOTERS INDIA LIMITED, LUCKNOW

Referred to in paragraph 8 under ‘Report on Other Legal andRegulatory Requirements’ Section of our Report of even date

On the basis of such checks as we considered appropriate and according to the informationand explanations given to us during the course of our audit, we report that:

(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As informed, all the fixed assets have not been physically verified by themanagement during the year but there is a phased programme of verification whichin our opinion is reasonable having regards to the size of the Company and natureof its business. No material discrepancies were noticed on such verification.

(c) As informed, the Company has not disposed of substantial part of fixed assetsduring the year thereby affecting the going concept status of the company.

(ii) (a) As explained to us, the company has conducted physical verification of the stores(excluding Inventory with third parties) as per the system of continuous physicalverification of the Inventory adopted during the year and finished goods and work inprogress at the end of the year, which is considered to be reasonable.

(b) In our opinion and according to information and explanations given to us, theprocedures of Physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature ofits business.

(c) According to information and explanations given to us, the discrepancies noticedon physical Verification of inventory conducted the management from time to timeas compared to book Records were not material and have been properly dealt within the books of accounts.

(iii) (a) According to information and explanations given to us, the Company has not grantedany loan Secured or unsecured, to the companies, firm or other parties covered inregister maintained under section 301 in the Act.

(b) According to information and explanation given to us, the Company has not takenany loan, Secured or unsecured, to the companies, firm or other parties covered inregister maintained under section 301 in the Act.

(c) In our opinion and according to information and explanations given to us, there areadequate Internal control systems commensurate with the size of the companyand the nature of its business for the purchase of inventory and fixed assets andalso for the sale of goods. During the Course of Audit, we have not observed anymajor weaknesses in control system.


30

(iv) According the information and explanations given to us, the company has not madeany contracts or arrangements that need to be entered in register referred to in Section301 of the Act.

(v) As informed and as per records, the company has not accepted any deposits from thepublic during the year.

(vi) In our opinion, the company has an internal audit system commensurate with the sizeand nature of its business.

(vii) We have broadly reviewed the accounts and records maintained by the company pursuantto the other made by the Central Government for the maintenance of Cost Recordsunder Section 209(i) (d) of the Act and are of the opinion that, prima-facie, the prescribedaccounts and records have been made and maintained. We have not, however, made adetailed examination of the records with a view to determine whether they are accurateand complete.

(viii) (a) As per records, the Company is regular in depositing undisputed statutory duesincluding Provident Fund, Investor Education & Protection Fund, Employee StateInsurance, Income Tax, Sales Tax, Wealth tax, Service Tax, Customs Duty, ExciseDuty, Cess and any other statutory dues, to the extent applicable to it with theappropriate authorities and as informed no undisputed amount were outstandingas at 31st March, 2013 for a period of more than six month the date of becomingpayable, except the following:

Sl. Name of the Status Nature of dues Period AmountNo. (in Lakhs)

1 Kerala sales Tax State sales Tax 92-93,93-94 & 94-95 4.22

Total 4.22

(b) The disputed statutory dues aggregating ̀ 255 lakhs plus interest & further penaltyindeterminate that have not been deposited on account of matters pending beforeappropriate authorities are as under:

Sl. Name of the dues Nature of Forum where Period AmountNo. the dues dispute is pending (In lakhs)

1. (a) State Sales Sales Tax & Dy.Com.(Appeal) 77-78, 86-87, 25.02Tax Act Interest 87-88, 92-93,

93-94, 96-97 &98-99

(b) State Sales Entry Tax & Comm. Of 97-98 to 06-07 113.77Tax Act Penalty Commercial Taxes

(c) State Sales Entry Tax & Tribunal 03-04,04-05 & 10.55Tax Act Penalty 05-06

(d) State VAT Act Entry tax & Additional 08-09 18.56Interest Commissioner

(Appeal)


31

2 (a) Central Sales Interest Dy. Com. 82-83, 86-87 & 5.83Tax Act (Appeal) 93-94

(b) Central sales Central Deputy 92-93 & 93-94 7.04Tax Act Sales Tax Commissioner

(Appeal)

3 (a) Central Excise & Service Tax Additional Oct.2002- 7.86+7.91Service Tax Commissioner Mar.2007 Penalty+

FurtherpenaltyIndeterminate

(b) Central Excise & Service tax Additional Apr.2007- 0.69+0.69Service Tax Commissioner Mar.2008 Penalty

(c) Central Excise & Central Excise Customs,Central Jan. 2006 0.33Service Tax Excise and Service

Tax AppellateTribunal,New Delhi

(d) Central Excise & Central Excise Assistant 2001-02 2.98Service Tax Commissioner

(e) Central Excise & Central Excise Joint 2001-02 10.83Service Tax Commissioner

(f) Central Excise & Central Excise Additional 2005-06 to 10.72+10.72Service Tax Commissioner 2008-09 Penalty

(g) Central Excise & Central Excise Assistant Apr.2009- 2.19+2.19Service Tax Commissioner Sept.2009 Penalty

(h) Central Excise & Central Excise Commissioner Oct.2009- 0.12+0.12Service Tax (Appeals) Mar.2010 Penalty

(i) Central Excise & Central Excise Assistant Apr.2010- 1.99+1.99Service Tax Commissioner Sept.2010 Penalty

(j) Central Excise & Central Excise Additional 2005-06 to 6.27+6.27Service Tax Commissioner 2008-09 Penalty

(k) Central Excise & Central Excise Assistant Oct.2010 to 0.12+0.12Service Tax Commissioner Mar.2011 Penalty

(l) Central Excise & Central Excise Assistant Apr.2011 to 0.06+0.06Service Tax Commissioner Sep. 2011 Penalty

Total : 255 + Interest& FurtherPenaltyIndeterminate

(ix) The company has an accumulated loss of ` 1597.94 lakhs at the end of the financialyear and has incurred cash losses in the financial year under report and also in theimmediately preceding financial year. The Company has been declared sick under section


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3 (1) (o) of the SICA, by BIFR in its meeting held on February 18, 2010, consequent tothe reference made by the Company, due to erosion of its net worth as on March 31,2009. The Cabinet committee, GOI has approved the revival package of 20,196 lakhs,which inter-alia includes the infusion of fresh funds, conversion of plan & non plan loanin to equity & waiver of interest. The Draft Rehabilitation Scheme (DRS) is underpreparation by Operating Agency (SBI) and shall be submitted in due course beforeBIFR for sanction

(x) In our opinion and according to information and explanations given to us, the companyhas not defaulted in repayment of dues to financial institutions or bank or debenturesholders, except term loan of Government of India, which has been waived and written offby accepting company’s miscellaneous application by BIFR dated June 19, 2013.

(xi) According to the information and explanations given to us, the company has not grantedloans and advances on the basis of security by way of pledge of shares, debentures orother securities.

(xii) In our opinion Company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.Therefore, the provision of clause 4(xiii) of the Order is not applicable to the company.

(xiii) In our opinion and according to information and explanation given to us, the Company isnot dealing or trading in clause 4(xiv) of the order is not applicable to the Company.

(xiv) According to information and explanation given to us the Company has not given anyguarantee for the loans taken by others from bank or financial institutions

(xv) According to information and explanations given to us, the company has received a nonplan term loan amounting to ` 189 lakhs from Government of India in financial year2012-13, which has since been utilized as per terms of the sanction letter.

(xvi) According to information and explanations given to us, and on an overall examinationsof the Balance Sheet, we are of the opinion that funds raised on short term basis have,prime-facia, not been used during the year for long term investment.

(xvii) According to information and explanations given to us, the Company has not made anypreferential allotment of shares to parties and Companies covered in the Registeredmaintained under section 301 of the Act.

(xviii)According to information and explanations given to us, the company has not issued anydebentures, thereof; the question of creation of securities or charges in respect ofdebentures issued is not applicable.

(xix) The Company has not raised any money by way of public issue during the year.(xx) Based upon the audit procedures performed and information given to us, we report that

no fraud on or by the company has been noticed or reported during the year bymanagement. However, checking of minutes of the Board of Directors revealed that acommercial agreement was executed by the then CMD without the authority of theBoard and after due consideration the board decided to refer the matter of the appropriateauthority for future action.

For, S. Srivastava & Co.Chartered Accountants

Place: LucknowDate: 22nd July 2013


M.No-073449


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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDERSECTION 619 (4) OF THE COMPANIES ACT, 1956, ON THE ACCOUNTS OF SCOOTERSINDIA LIMITED FOR THE YEAR ENDED 31 st MARCH, 2013.

The preparation of financial statements of Scooters India Limited for the yearended 31st March, 2013 in accordance with the financial reporting framework prescribedunder the Companies Act, 1956 is the responsibility of the management of the company.The Statutory Auditor appointed by the Comptroller and Auditor General of India underSection 619(2) of the Companies Act, 1956 is responsible for expressing opinion onthese financial statements under section 227 of the Companies Act, 1956 based onindependent audit in accordance with the standards of auditing prescribed by theirprofessional body, the Institute of Chartered Accountants of India. This is stated tohave been done by them vide their Revised Audit Report dated 22 July, 2013.

I, on behalf of the Comptroller and Auditor General of India have conducted asupplementary audit under section 619 (3) (b) of the Companies Act, 1956 of thefinancial statements of Scooters India Limited for the year ended 31 March 2013. Thissupplementary audit has been carried out independently without access to the workingpapers of the statutory auditor and is limited primarily to inquiries of the statutoryauditor and company personnel and a selective examination of some of the accountingrecords. On the basis of my audit nothing significant has come to my knowledgewhich would give rise to any comment upon or supplement to the Statutory Auditor'sReport under section 619 (4) of the Companies Act, 1956.

For and on the behalf of theComptroller & Auditor General of India

Naina A. KumarPrincipal Director of Commercial Audit& Ex-Officio Member, Audit Board - II,

New DelhiPlace : New DelhiDate : 23.08.2013

Annexure IV


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ANNEXURE - V

Reply to Independent Auditor Report 2012-2013

TO THE MEMBERS OF, SCOOTERS INDIA LIMITED, LUCKNOW

The Revised Audit Report is issued in supersession of our earlier Audit Report dated 15th July2013. Revised Audit report is issued in accordance with format prescribed in SA 700, (Revised)issued by the Institute of Chartered Accountants of India. Further we confirm that there is nochange in the opinion as expressed earlier & also none of the figure have undergone change inthe financial statement of the company as at March 31, 2013.

Report on the Financial Statements

1. We have audited the accompanying financial statements of Scooters India Limited (“theCompany”), which comprise the Balance Sheet as at March 31, 2013, the Statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Management is responsible for the preparation of these financial statements that givea true and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956 (“the Act”) and in accordance with the accounting principlesgenerally accepted in India. This responsibility includes the design, implementation andmaintenance of internal control relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatements, whetherdue to fraud or error.

Auditor Responsibility

3. Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withthe ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders the internal control relevant to the Company’s preparation and fair presentationof the financial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by Management, as wellas evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.


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6. In our opinion and to the best of our information and accordingto the explanation given to us, the financial statements give theinformation required by the Act in the manner so requiredsubject to:(i) Para no.3 of Note no.1, regarding non provision of

depreciation on assets which have been declared assurplus.

(ii) Para no 7 of Note no.1 regarding adhoc provision of0.5% on the value of closing stock of raw material andcomponents, stores, spares & consumables forredundancy.

(iii) Para no 15 of Note no.1 regarding valuation of job donefor internal use on technical estimate of material thanthe actual cost incurrence.

(iv) Para no. 16 of Note no.1, regarding non provision ofdeferred tax on account of timing difference betweentaxable income and accounting income is providedconsidering the tax laws enacted or substantivelyenacted up to the Balance Sheet date.

(v) Para 17(i)(A) of Note no1, regarding non considerationof obligations of various show cause notices issued bygovernment authorities the amount of which has neitherbeen considered as disputed obligation nor ascontingent liabilities and its consequent effect over theprofitability/ loss of the company.

vi) Note no.13 regarding deferred tax Assets aggregatingof ` 4142.69 lakhs has not been recognized by thecompany in financial statements of current year.

vii) Note no. 15 regarding inclusion of Stock lying with ThirdParty/Contractors to the tune of ` 68.57 lakhs ininventories against which company have no securityand its consequent effect over the profitability/ loss ofthe company.

viii) Note no.16(a) regarding realization of outstanding of` 85.65 lakhs from Amausi Motors in pursuant to phasedarrangement entered into by the company for liquidatingthe outstanding balance and its consequent effect overthe profitability/ loss of the company.

COMMENTS MANAGEMENT REPLIES

No comments required since it isthe accounting policy based onapplicable mandatory AccountingStandard 6. Further there is nocase of surplus assetsrecognized during the year.

No comments required since it isthe accounting policy of thecompany. Further appropriatedisclosure has been made in Para7 of Note No. 1.No comments required since it isthe accounting policy of thecompany. Further appropriatedisclosure has been made in Para15 of Note No. 1No comments required since it isthe accounting policy based onapplicable mandatory AccountingStandard 22. Further appropriatedisclosure has been made in NoteNo. 13.Appropriate disclosure has beenmade in Para 17 (i) B & C of NoteNo. 1.

Appropriate disclosure made inNote No. 13.

Appropriate disclosure made inNote No. 15a.



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(ix) Note no. 22 regarding consumption of material is notaccounted for on actual consumption basis but takenas a differential/ balancing quantity of stock as Openingstock plus purchases deducted by closing stock andits consequent adjustment of abnormal loss (if any)into consumption.

(x) Note no.27 regarding non provision of payment ofarrears amounting to ` 269 lakhs to the workmenwho were on roll of the company as on 01.08.2004.

(xi) Note no. 30(i)(a) regarding contingent liability of 11 casesof consumer forum (estimated amount of ` 13 lakhs)and 73 other cases (The amount of which isindeterminate.) and its consequent effect over theprofitability/ loss of the company.

(xii) Note no.30(i) ( c ) regarding contingent liability of casesof private parties of ` 122.91 lakhs and its consequenteffect over the profitability/ loss of the company.

(xiii) Note no. 30(i)(d) regarding contingent liability of ̀ 431.65lakhs in connection with guarantee/indemnity given byCompany to OBC against which Writ Petition has beenfiled before High Court,Lucknow Bench and itsconsequent effect over the profitability/ loss of thecompany

(xiv) Note no. 30(i) ( e) regarding non recognition of liabilityof ` 27.34 lakhs on account of Demand of ESI, theappeal of which is pending before Allahabad High Court,Lucknow bench and its consequent effect over theprofitability/ loss of the company.

(xv) Note no. 30(i) (f) regarding non recognition of liability of` 213 lakhs raised by Punjab national bank on accountof indemnity provided by the company for loan availedby UP tyres/tubes. The case is pending with DRTLucknow and its consequent effect over the profitability/loss of the company.

(xvi) Note no. 30(i) (g) regarding non recognition of liabilityof ` 74.23 lakhs plus interest & further penalty(indeterminate) on account of demand notice raised byCentral Excise and Service Tax authority and itsconsequent effect over the profitability/ loss of thecompany.

(xvii) Note no. 30(ii) regarding non recognition of liability of` 23.85 lakhs plus interest thereon on account ofunfavourable arbitration in the matter of OrdinanceFactory Board and its consequent effect over theprofitability/ loss of the company.

(xviii) Note no. 30(iii) on account of non recognition of counterclaim of UPSIC as liability of ` 9.27 lakhs plus interestthereon and its consequent effect over the profitability/loss of the company.



Appropriate disclosure made inNote No. 30(i)(a).

Appropriate disclosure made inNote No. 30(i)(c).

Appropriate disclosure made inNote No. 30(i)(d).

Appropriate disclosure made inNote No. 30(i)(e).

Appropriate disclosure made inNote No. 30(i) (f).

Appropriate disclosure made inNote No. 30(i)(g).

Appropriate disclosure made inNote No. 30(ii).

Appropriate disclosure made inNote No. 30(iii).


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(xix) Note no. 30(iv) regarding cases pending of 36employees in labour courts and 110 other casespending in other courts, the amount of which isindeterminate and its consequent effect over theprofitability/ loss of the company.

(xx) Note no. 30(v) on account of non recognition ofRecovery Notice of Tehsildar Lucknow, for recoveryof ` 2412 lakhs which is pending with High CourtLucknow Bench and its consequent effect over theprofitability/ loss of the company.

(xxi) Note no 30 (vi) on account of demand of ` 2936.96lakhs raised by Nagar Nigam Lucknow against housetax liability, against which company has made noprovision and its consequent effect over theprofitability/ loss of the company.

(xxii) Note no. 31 regarding non recognition of liability forpending UPVAT & CST cases for the F.Y 2010-11onwards and its consequent effect over the profitability/loss of the company.

(xxiii) Note no. 32 regarding non confirmation of most of thebalances of Debtors/ Creditors accounts claimsrecoverable, loans and advances material lying withthird parties, various deposits to electricity, custom,court, land lord and other parties and the consequenteffect on the book balance and the actual balance overthe profitability / loss to the company.

(xxiv) Note no. 33 regarding non recognition of liability onaccount of nonpayment of lease rent to M/s GaneshFlour Mills Ltd. (now HVOC Ltd.) from 1982-83onwards and its consequent effect over theprofitability/ loss of the company.

(xxv) Note no. 38 regarding approval of revival package of` 20196 lakhs by cabinet committee of GOI andacceptance of Miscellaneous application by BIFR forearly implementation of it on June 19, 2013, and itsimplementation with retrospective effect 31.03.2013,without finalization of “Draft Rehabilitation Scheme”(DRS) by the operating agency (SBI).

7. Subject to the observation given as per no. (i) to (xxv) referredto above we report that;(i) In absence of the certainty of the estimates of amount

involved in various legal cases, we are unable tocomment upon the correctness of amount of theContingent liabilities as given in Note no. 30 and itsconsequent effect over the profitability/ losses of thecompany.

(ii) The company should take stringent action for recoveryof outstanding/ Recoverable amount against which100% provisioning has already been made in the earlieryears by deciding an approved policy for the same.

Appropriate disclosure made inNote No. 30(iv).

Appropriate disclosure made inNote No. 30(v).

Appropriate disclosure made inNote No. 30(vi).





Appropriate disclosure has beenmade in Note No. 30.

Noted.


38

(iii) The Royalty recoverable from Fine White Line Limited(FWL) till 31.03.2012 amounting ` 91.57 lakhs ( ` 30.37lakhs for F.Y.2010-11 and ` 61.20 lakhs for F.Y. 11-12),against which company has spent ` 98.49 lakhs.(` 59.35 laks in F.Y.12-13, ` 34.02 lakhs. in F.Y. 11-12.and ` 5.12 in F.Y 10-11,) thereby spend` 6.92 lakhs more than amount recoverable and entireamount of ` 91.57 lakhs provided in the books and isstill recoverable , thereby added ` 190.06 lakhs lossto the company.

(iv) There is unfunded liability of ` 190.10 lakhs on accountof retirement benefit according to Actuarial Valuation.

(v) The company is required to maintain the cost recordfor the manufacturing process but does not maintainthe cost of material consumed on actual consumptionbasis, instead accounted for the difference ofInventory as “ presumed to be consumed “ againstproduction cost of unit produced, resultantly all thenormal and abnormal losses (if any) are adjusted inthe production cost.

(i) The company has implemented the restructuring asper the approval of revival package of government ofIndia of ` 20196 lakhs after the sanction of BIFR onJune 19 June 2013, whereas draft Rehabilitationscheme(DRS) is under preparation by the operatingagency (SBI) and has not been submitted to BIFR forsanction.

(ii) The company has in pursuance to comply theapproval of implementation of BIFR dated 19.06.2013increased its authorized capital from 7500 lakhs to25000 lakhs, retrospectively w.e.f. 31.03.2013 andamended its financial statement accordingly,considering section 18 and 32 A of the Sick IndustrialCompanies (special provision) Act, 1985 overridingthe provision of companies act 1986 and SEBI (ICDR)Regulation 2009 and other process of law.

(iii) The company has converted plan and non-plan loanof government of india of ` 8521.12 lakhs into equityshare capital and further adjusted the same amountof ` 8521.12 lakhs against accumulated losses of thecompany by reduction of share capital, simply on thebasis of sanction of miscellaneous application byBIFR, without submission of the “draft rehabilitationscheme” by the Operating Agency(SBI) to BIFR.

The Legal proceedings initiatedare not only for recovery of theroyalty amount due but majority ofthe amount spent is for protectionof rights of SIL in respect ofLambretta Trademark in variouscountries including U.K., Italy.Legal expenses incurred hadbeen duly accounted for in thebooks and the amountrecoverable has been fullyprovided for, therefore there is noover/under statement of losses asstated.Appropriate disclosure has beenmade vide Note No 10a & there isno understatement/Overstatement of Profit/Loss.Appropriate disclosure has beenmade in Note No. 22a.





39

For S. Srivastava & Co.Chartered Accountants

Place : LucknowDate : 22nd July, 2013

Sanjeev SrivastavaMembership No. 073449

(iv) The company has waived and written off Interestaccrued & due as on 31.03.2012 of ` 2217.38 lakhsand Interest accrued but not due as on 31.03.2012 of` 420.22 lakhs, simply on the basis of sanction ofmiscellaneous application by BIFR, withoutsubmission of the “draft rehabilitation scheme” bythe Operating Agency(SBI) to BIFR.

(v) The company has not made any provision for incometax on account of waiver of interest accrued and dueas on 31.03.12 of ` 2217.38 lakhs and interest accruedbut not due as on 31.03.12 of ` 420.22 lakhs claimedas expenses as early years, but written off during thecurrent year.Give a true and fair view in conformity with the accountingprinciples generally accepted in India.(i) In the case of the Balance Sheet, of the state of

affairs of the Company, as at 31st March, 2013.(ii) In the case of Profit & Loss Account, of the Profit/

(Loss) of the year ended on that date: and(iii) In the case of Cash flow Statement, of the cash

flows of the year ended on that date.



Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by theCentral Government of India in terms of Section 227(4A) of the Act, we give in the Annexurea statement on the matters specified in paragraphs 4 and 5 of the Order.

9. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in Section 211(3C) ofthe Act.

(e) As per the Notification No. GSR 829 (E) dated 21.10.2003 issued by the Departmentof Company Affairs; disqualification of Directors in term of clause (g) of sub-section(1) of Section 274 of the Companies Act, 1956 is not applicable to the companybeing a Government Company.


40

BALANCE SHEET AS AT MARCH 31, 2013

Particulars Note No. AS AT AS AT31-3-2013 31-3-2012

` in Lakhs ` in Lakhs

I. EQUITY AND LIABILITIES

1) Shareholders' Fundsa) Share Capital 2 5,348.39 4,299.39b) Reserves & Surplus 3 (1,588.68) (12,147.34)c) Money received against share warrnats - - -

(2) Share application money pending allotment 4 - 1,049.00

(3) Non-Current Liabilities(a) Long-term borrowings 5 151.20 4,211.72(b) Deferred tax liabilities (Net) - -(c) Other Long term liabilities 6 244.66 255.75(d) Long term provisions - -

(4) Current Liabilities(a) Short-term borrowings 7 1,264.04 1,307.49(b) Trade payables 8 2,974.47 2,795.47(c) Other current liabilities 9 939.12 8,223.44(d) Short-term provisions 10 202.80 68.88

Total 9,536.00 10,063.80

II. Assets(1) Non-current assets(a) Fixed assets 11

(i) Tangible assets 1,540.13 1,633.96(ii) Intangible assets - -(iii) Capital work-in-progress 11.44 11.12(iv) Intangible assets under development - -

(b) Non-current investments 12 - -(c) Deferred tax assets (net) 13 - -(d) Long term loans and advances 14 305.08 265.63(e) Other non-current assets - -

(2) Current assets(a) Current investments - -(b) Inventories 15 3,553.32 3,839.08(c) Trade receivables 16 260.87 239.98(d) Cash and cash equivalents 17 3,336.60 3,251.07(e) Short-term loans and advances 18 436.75 736.92(f) Other current assets 19 91.81 86.04

Total 9,536.00 10,063.80

Accounting Policies & Notes to acconts 1 to 41

B.N. Raj Rahul Bali R.K. SinghFinancial Controller Director (Technical) Chairman and Managing Director

Place : LucknowDate : 15th July, 2013

As per our separate report of even dateFor S. Srivastava & Co.Chartered Accountants

Sanjeev Srivastava(Partner)

Membership No.73449


41

PROFIT AND LOSS STATEMENT FOR THE YEAR ENDED MARCH 31,2013

Note No. YEAR ENDED YEAR ENDED31-3-2013 31-3-2012

` in Lakhs ` in Lakhs

I. Revenue from operationsGross Sales 20 20,982.26 22,673.86Less : Excise Duty 2,008.82 1,874.89

Net Sales 18,973.44 20,798.97II. Other Income 21 368.48 396.61

III. Total Revenue ( I + II) 19,341.92 21,195.58

IV. Expenses :Cost of materials consumed 22 13,283.76 14,419.64Cost of sales at petrol pump 22 1,382.69 1,335.01(Accretion)/Decretion to Stock 23 (62.11) 242.88Employee benefit expense 24 3,422.24 3,471.85Other expenses 25 1,630.65 1,774.29Finance Cost 26 187.25 1,540.87Depreciation 11 131.38 134.00

Total 19,975.86 22,918.54Less : Expenditure included in above capitalized 33.88 45.67

Total Expenses 19,941.98 22,872.87

V. Profit before exceptional and extraordinary Items and (600.06) (1,677.29)tax (III-IV)

VI. Exceptional Items 27 - 316.70VII. Profit before extraordinary Items and tax (V-VI) (600.06) (1,993.99)VIII. Extraordinary Items - -IX. Profit before prior year adjustments (600.06) (1,993.99)X. Prior Year Adjustments - -

XI. Profit before tax (VII-VIII) (600.06) (1,993.99)

XII. Tax expense :(1) Current tax - -(2) Deferred tax - -

XIII. Profit (Loss) from the period from continuing operations(IX-X) (600.06) (1,993.99)

XIV. Profit/(Loss) from discontinuing operations - -XV. Tax expense of discounting operations - -XVI. Profit/(loss) from Discontinuing operations (XIV-XV) - -

XVII. Profit/(Loss) for the period (XI+XIV) (600.06) (1,993.99)

XVIII. Earning per equity share :(1) Basic 28 (1.12) (4.64)(2) Diluted 28 (1.12) (4.64)

Accounting Policies & Notes to accounts 1 to 41





Membership No.73449


42

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 st MARCH 2013PURSUANT TO CLAUSE 32 OF THE LISTING AGREEMENT

Particulars Current Year Previous year` in lakhs ` in lakhs

Cash flow from operating activities :

Net Profit/(Loss) before Tax and extra ordinary items (600.06) (1,993.99)Adjustment for :

Depreciation(i) For Current Year 131.38 134.00(ii) For Prior Period - -Deffered Revenue Expenditure(i) Writen Off for The Year - -(ii) Addition For the Year - -Loss Written off* 11,158.72 -Provision for Loss in Value of Investment - -Provision/Written off for Doubtful Debts 8.26 122.68Provision for inventory Obolesence 6.74 -Interest Income (301.08) (186.43)Interest Paid* 187.25 1,540.87(Profit)/Loss in exchange rate change 0.39 -(Profit)/Loss on sale of fixed assets - 11,191.66 - 1,611.12

Operating profit before working capital changes 10,591.60 (382.87)Adjustment for :

Trade receivables (29.15) (60.87)Inventories 279.02 (284.43)Other current assets (5.77) (42.44)Long Term Loans & advances (39.45) (31.61)Short Term Loans & advances 300.17 432.74Other Long Term Liabilities (11.09) (3.00)Trade payables 179.00 451.35Other Current Liabilities (3,012.72) 1,241.74Provisions 133.92 (2,206.07) 17.67 1,721.15

Cash generated/(Loss) from operations : 8,385.53 1,338.28Less Taxes paid :Income Tax - -

Cash in flow/(outflow) before extra ordinary items 8,385.53 1,338.28Extra ordinary items : - -

Net cash from operating activities 8,385.53 1,338.28Cash flow from investing activities

Increase in fixed assets / capital expenditure (37.87) (60.89)Sale / Adjustments of fixed assets - -Interest Income 301.08 186.43(Loss)/Gain in exchange rate (0.39) -

Net cash used in investing activities 262.82 125.54Cash flow from financing activities :

Interest paid* (187.25) (1,540.87)Increase in share capital - -Repayment of term loan to G.O.I. - -Receipt of long term loan from G.O.I. 189.00 808.00Settlement of GOI Loan* (8521.12) -(Decrease) / Increase in cash credit limits (43.45) 877.80

Net cash used in financing activities (8,562.82) 144.93Net increase / (decrease) in cash and cash equivalents 85.53 1,608.75Cash and cash equivalents (Opening balance) 3,251.07 1,642.32Cash and cash equivalents (Closing balance) 3,336.60 3,251.07

*Please Refer Note No.38


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Notes to the Cash Flow Statement

1. Cash and Cash Equivalents

Cash and cash equivalents consist of cash and cheques on hand and balances with banks andinvestment in short term deposit accounts. Cash and cash equivalents included in the Cash FlowStatement comprise the following Balance Sheet amounts.

Cash and cash equivalents For the FY 2012-13 For the FY 2011-12as at 31st March'13/31st March'12 ` `Cash and stamps in hand 14.26 2.44Cheques in hand 51.54 1.98Balance with Banks to be held as margin money or security

against borrowings, guarantees and other commitments 3,072.26 3,036.39Balance with Scheduled Banks 198.54 210.26Cash and Cash Equivlents 3,336.60 3,251.07

Net change in cash and Cash equivalents 85.53 1,608.75

2. Cash & Cash Equivalent includes :

(a) Term Deposits for ` 50.55 lakhs (Previous year ` 50.40 lakhs) for E.S.I. Case, Court Order& Welfare Fund.

(b) Term Deposits for ` 1804.00 lakhs (Previous year ` 1660.00 lakhs) held against LCmargin.

(c) Term Deposits for ` 1217.71 lakhs (Previous Year ` NIL) given as security against Bank

Guarantee, Cash Credit & Overdraft.





Membership No.73449


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Annexed to and forming part of the Accounts

NOTE NO.-1

ACCOUNTING POLICIES

1. SYSTEM OF ACCOUNTING :

(i) Basic assumptions :

The accounts have been prepared under historical cost convention on accrualbasis and as per applicable Mandatory Accounting Standards.

(ii) Going concern :

Accounts have been prepared on the principle applicable to a going concern.

(iii) Use of Estimates :

The preparation of financial statements requires management to make certain estimatesand assumptions that affect the amounts reported in the financial statement andnotes thereto. Differences between actual results and estimates are recognized inthe period in which they materialize.

2. a) FIXED ASSETS :

(i) Fixed Assets are stated at original cost and are inclusive of all expenses to bringthem to a state of use.

(ii) Land is valued at original cost.

(iii) The cost of the leasehold land is amortized over the lease span.

(iv) The tools manufactured departmentally costing individually ̀ 5000 and below and/orhaving estimated average useful life of 5 years and below being of consumable natureare accounted for as revenue expenditure under relevant natural heads.

(v) Construction period expenses exclusively attributable to projects are capitalized.

(vi) Borrowing cost directly attributable in relation to acquisition, construction of assetsthat takes substantial period of time to get ready for its intended use are capitalisedas part of the cost of such assets upto the date when such assets are ready forintended use. Other borrowing costs are charged as expenses in Profit & Loss Accountin the year in which they are incurred.

b) INTANGIBLE ASSET :Intangible assets are stated at cost of acquisition less accumulated amortisation. TechnicalKnow how is amortised over the useful life of the underlying plant. Computer Software isamortised over a period of 6 years. Amortisation is done on straight line basis.


45

c) IMPAIRMENT OF FIXED ASSET :The carrying values of fixed assets of the identified cash generating units (CGU) arereviewed for impairment at each Balance Sheet date. When events or changes incircumstances indicate that the carrying values may not be recoverable and the carryingamount exceeds the estimated recoverable amount, the assets of the CGU are writtendown to the recoverable amount and the impairment loss is recognized in the profit andloss account.

3. DEPRECIATION :

Premium on leasehold land is amortised over the period of lease.

Depreciation on other fixed assets is charged on straight-line method in accordance withrates prescribed in Schedule XIV to the Companies Act, 1956 as amended from time totime, except.

(a) Plant, Machinery, Equipment and Jigs & Fixtures costing individually ` 5000 andbelow are depreciated fully in the year of purchase.

(b) In case of tools where average estimated useful life is greater than five years but lessthan ten years, depreciation is charged @ 20% as was being done prior to introductionof Schedule XIV.

Depreciation is not provided on assets which have been declared surplus and are not inuse. These are distinctively shown under other Current Assets at net realisable value.

4. INVESTMENTS :Investments are valued at cost. However, in case of permanent diminution in the value ofinvestments, suitable provision is made in the books of accounts.

5. INVENTORIES :(i) Raw materials, components, stores & spares, tools, consumables and other stocks

are valued at cost (net of CENVAT) determined on FIFO Basis. Scrap and disposablegoods are valued at estimated realisable value.

(ii) Stock-in-trade is valued at lower of cost.or realisable value.

(iii) Work-in-progress is valued at cost. Where the jobs are in progress their conversioncost is taken at 50% of the standard cost regardless of the stage of completion.Completed jobs, including jobs pending inspection are valued at cost or realisablevalue whichever is less.

(iv) Customs duty on bonded material is allocated to the cost of goods and equipment.

(v) Expenditure on stationery, uniform, medicine etc. is charged off to revenue at thetime of receipt. But the stock remaining at the year end are credited to the revenueaccount at cost and shown as closing stock.


46

6. DUTIES ON BONDED STOCK :Excise duty on finished stocks lying in bond is provided for, on the assessable value

applicable for each product.

7. PROVISION FOR REDUNDANCY/OBSOLESCENCE :A general provision for redundancy is made at 0.5% of the value of closing inventory of raw

materials and components, stores and spares and loose tools and consumables. Whereverneccessary, additional provision for redundancy/Obsolescence of inventory is made in

individual cases keeping in view estimated reaizable value.

8. CENVATCenvat credit on eligible Revenue / Capital purchase is taken on receipt of such materials.

9. SALES :Sales are set up as per the Sale of Goods Act. They represent value of goods sold at the

ex-factory price plus incidentals like freight, insurance etc. embedded in the sale price.

10. ACCOUNTING FOR INCOME AND EXPENDITURE :Income and expenditure are accounted for in the current year on accrual basis under

natural heads of account.

11. FOREIGN EXCHANGE VARIATION :All transactions denominated in foreign currencies are translated at the rate of exchange

on the day of the transaction. Monetary assets and liabilities denominated in foreign

currencies are translated at the exchange rate ruling on the balance sheet date. Exchangedifferences arising on foreign currency transactions at the time of translation or settlement

are included in the profit and loss account.

12. RETIREMENT BENEFITS :Contribution to Provident Fund is made to the company's provident fund trust. The fund is

compared to aggregate liability and shortfall if any is additionally contributed by the company

and recognized as expenses.

Gratuity and Leave Encashment liability is ascertained on actuarial valuation. However,any excess/deficit in funds managed by LIC as compared to the actuarial liability is

recognised as asset/liability immediately and the consequent gain/loss arising from such

valuation is charged to revenue in the year in which they arise.

13. RESEARCH AND DEVELOPMENT :Expenditure relating to product approvals including type approvals, consistency ofproduction approvals from testing agencies and materials specifically procured fordevelopment of products are charged as Research & Development Expenses and other


47

expenditure of Research and Development are charged off to the Profit and Loss Accountunder natural heads of accounts. Expenditure which results in creation of capital assetsis taken to fixed assets and depreciation is provided as applicable. Prototype vehiclessubmitted to testing agencies are booked under finished goods.

14. ACCOUNTING OF GOVERNMENT GRANT :(i) Government Grant of revenue nature is accounted for in the Profit and Loss Account

under the head other income to the extent the expenditure is charged to revenue asand when incurred.

(ii) In case of any specific Government grant the treatment in the books of accounts ismade on the basis of specific stipulation for the same.

15. JOBS DONE FOR INTERNAL USE :Jobs done for internal use are valued on the basis of technical estimates of material andconversion cost and are distinctly shown as a consolidated deduction from expendituresincluded in Profit & Loss Account.

16. TAXES ON INCOME :Provision for current tax is made in accordance with the provisions of the Income Tax Act,1961.

Deferred Tax on account of timing difference between taxable income and accountingincome is provided considering the tax laws enacted or substantively enacted up to theBalance Sheet date.

17. CAPITAL COMMITMENTS & CONTINGENT LIABILITIES :i) CONTINGENT LIABILITIES :

A. Show Cause Notices issued by various Government Authorities are not consideredas Obligation.

B. When the demand notices are raised against such show cause notices and aredisputed by the Company, these are classified as disputed obligations.

C. The treatment in respect of disputed obligations, in each case, are as under :a) a provision is recognised in respect of present obligations where the outflow

of resources is probable;b) all other cases are disclosed as contingent liabilities unless the possibility of

outflow of resources is remote.

ii) CAPITAL COMMITMENTS :Estimated amount of contracts remaining to be executed on capital accounts areconsidered for disclosure.


48

NOTE NO. 2Share Capital

As at As at31.03.2013 31.03.2012` in lakhs ` in lakhs

Authorised Capital25,00,00,000 Equity Shares (Previous Year 7,50,00,000) 25,000.00 7,500.00of ` 10 each.

Issued Capital5,34,85,500 Equity Shares 5,348.55 4,299.55(Previous year 4,29,95,500) of ̀ 10 each

Subscribed and paid up Capital 5,348.23 4,299.235,34,82,255 Equity Shares*(Previous year 4,29,92,255) of ̀ 10 each

Forfeited Shares 0.16 0.16

5,348.39 4299.39

*Of the subscribed and paid up capital 9,05,000 shares (Previous year 9,05,000 shares) of` 10 each allotted to the Government of India during 1972-73 & 1975-76 as fully paid pursuantto a contract without payment being received in cash.

a. For details of issued, Subscribed & paid up Capital. Please refer Note No.38.

b. The reconciliation of the number of shares outstanding as on 31st March 2013 are asfollows :

Particulars Equity Shares

Number ` in Lakhs

Shares outstanding at the beginning of the year 42995500 4,299.55Shares issued during the year 95701171 9,570.12Shares bought back/reduced during the year 85211171 8,521.12Shares outstanding at the end of the year 53485500 5,348.55

85211171 shares at ` 10/- each has been issued for conversion of GOI loan & 10490000shares at ̀ 10/- each has been issued for advance against equity pending allotment. Detailsat Note No.38.85211171 shares at ̀ 10/- each has been reduced/setoff against accumulated losses. Detailsat Note No.38


49

c. Shares in the company held by each shareholder holding more than 5 percent sharesspecifying the number of shares held are as follow :

Name of Shareholder As at 31 March 2013 As at 31 March 2012No. of Shares % of No. of Shares % of

held Holding held Holding

Government of India 51495490 96.28 41005490 95.38

d. Terms/Rights attached to Equity SharesThe Company has only one class of equity shares having a par value of ̀ 10 per share.Each holder of equity shares is entitled to one vote per share.

NOTE NO. 3Reserve and Surplus

As at As at31.03.2013 31.03.2012` in Lakhs ` in Lakhs

ReservesCapital Reserve 9.26 9.26

9.26 9.26

SurplusOpening Balance (12,156.60) (10,162.61)Add : Net Profit/(Net Loss) During the year (600.06) (1,993.99)

Less : Loss written off 11,158.72 -

Closing Balance (1,597.94) (12,156.60)

(1,588.68) (12,147.34)

a. The accumulated loss has been written off by ̀ 11158.72 lakhs. The details are given atNote No.38


50

NOTE NO. 4Share Application Money Pending Allotment


Advance against Share Capital* - 1,049.00

- 1,049.00

*Please refer Note No.38

NOTE NO. 5Long Term Borrowings


UnsecuredLoans from Government of India* 151.20 4,211.72

151.20 4,211.72

* Please refer Note No.38 & 39

a. The Government of India, Ministry of Industry & Public Enterprises, Deptt. of HeavyIndustry released funds by way of non plan loan amounting to ̀ 189.00 lakhs (previousyear ` 808.00 Lakhs) during the year towards salary support for the period October,2011 to December, 2011.

NOTE NO. 6Other Long Term Liabilities


Advances & Deposits 244.66 255.75

244.66 255.75


51

NOTE NO. 7Short Term Borrowings


SecuredLoans and advances from Banks*

State Bank of India 719.80 741.28Indian Overseas Bank 544.24 566.21

1,264.04 1,307.49

* Cash Credit facility from S.B.I. & I.O.B. are secured by hypothecation of inventories/bookdebts/fixed deposit.

NOTE NO. 8Trade Payables


Acceptances 1,279.47 778.24Other Trade Payable 1,695.00 2,017.23

2,974.47 2,795.47


52

NOTE NO. 9Other Current Liabilities


Other Payables 759.19 1,078.13Advances and Deposits @ 101.49 158.48Current Maturities of Long Term Loan From GOI 37.80 4,309.40Interest accrued but not due** - 420.22Interest Accrued & Due on GOI Loans** - 2,217.38Unspent Balance against Workmen Housing Colony* 40.64 39.83

939.12 8,223.44

@ Include ` 1.26 lakhs (Previous year ` 1.25 lakhs) on account of advance deposited byworkmen for allotment of House in Workmen's Colony.

*The details areAmount recovered so far from workmen 146.68 145.87Less : Expenditure on Workmen's Housing Colony 106.04 106.04

40.64 39.83

** Please refer Note No.38 & 39

NOTE NO. 10Short Term Provision


Leave Encashments 190.10 52.78Warranty 12.70 16.10

202.80 68.88

a. Liability for Gratuity & Leave Encashment has been determined by an actuary, appointedfor the purpose, in conformity with the principles set out in Accounting Standard 15 thedetails of which are as hereunder.


53


Gratuity LeaveAmount to be Recognized in Balance Sheet Encashment

Present Value of Funded Obligation 2646.31 1233.58Fair Value of Plan Assets (2,885.03) (1,043.49)

Net Liability (238.72) 190.09

Amounts in Balance SheetLiability (238.72) 190.09Assets - -Net Liability (238.72) 190.09

Expenses to be Recognized in the statement of Profit & LossCurrent Service cost 91.48 170.49Interest on Defined Benefit Obligation 247.02 109.01Expected Return on Plan Assets (308.85) (114.79)Net Actuarial Losses / (Gains) Recognised in Year 127.60 (22.83)Total Included in "Employees' Emoluments" 157.25 141.87Actual Return on Plan Assets 276.35 101.65

Reconciliation of Benefit Obligations & Plan Assets For the PeriodChange in Defined Benefit ObligationOpening Defined Benefit Obligation 2,872.37 1,267.59Current Service Cost 91.48 170.49Interest Cost 247.02 109.01Actuarial Losses / (Gain) 95.10 (35.97)Benefits Paid (659.66) (277.54)Closing Defined Benefit Obligation 2,646.31 1,233.58

Change in Fair Value of AssetsOpening Fair Value of Plan Assets 3,268.34 1,214.81Expected Return on Plan Assets 308.85 114.80Actuarial Gain / (Losses) (32.50) (13.14)Contributions by Employer - 4.56Benefits Paid (659.66) (277.54)Closing Fair Value of Plan Assets 2,885.03 1,043.49


54

Summary of the Actuarial Assumptions Gratuity LeaveEncashment

Discount Rate 8.00% 8.00%Expected Rate of Return on Assets 9.40% 9.40%Salary Escalation Rate - Senior Staff 11.20% 11.20% - Junior Staff 11.20% 11.20%

b. The details of provison for warranty are given below :

( ` in Lakhs)

Particulars 2012-13 2011-12

Opening Balance 16.10 13.10Add : Provision for the year (net) including additional/ 3.14 9.79less provision for earlier years

Total 19.24 22.89

Less : Payment/Debits 6.54 6.79

Closing Balance 12.70 16.10


56

NOTE NO. 12Non Current Investments


Investment at cost (Unquoted fully paid)UP Instruments Limited1,55,030 Equity Shares of ̀ 10 each 15.50 15.50

UP Tyres & Tubes Limited5,22,800 Equity Shares of ` 10 each 52.28 52.28

Co-operative Electric Supply Society Limited5,700 Equity Shares of ` 10 each 0.57 0.57

68.35 68.35Less : Provision for estimated loss in value 68.35 68.35

– –

a. The Government of India approved participation in the equity share capital of M/s U.P.Instruments Ltd. (A State Government Undertaking) to the extent of ̀ 15.68 Lakhs, i.e.,49% of equity share capital and the Company/Nominees have so far invested ` 15.50lakhs towards equity share capital (Previous year ` 15.50 lakhs). The Company hasbeen intimated that all assets including land, building and plant & machinery of UPILhas been sold through Committee constituted by U.P. State Government. Accordingly,the possible loss for the investment of ` 12.71 lakhs during 1996-1997 & ` 2.79 lakhsduring 2004-2005 has been provided for in the Accounts.

b. The Government of India approved participation in the equity shares of M/s UP Tyres &Tubes Ltd. (UPTT) (A State Government Undertaking) to the extent of ̀ 52.28 lakhs, i.e.,49% of their equity share capital and the Company/Nominees have so far invested` 52.28 lakhs towards equity share capital (Previous year ` 52.28 lakhs). As the networth of UPTT has become negative, the estimated realisable value of the share isconsidered as Nil. Accordingly, possible loss in the investment (` 52.28 lakhs) has beenprovided for in the Accounts during 1996-1997.

c. The company invested ` 0.57 lakhs in the shares of The Co-operative Electic SupplySociety Limited in the year 1984. In absence of any information regarding the net worthof the company, a provission for the same has been made in the year 2006-2007.


57

NOTE NO. 13Defferred Tax Assets


(A) Deferred tax liabilityOn account of timing difference with regard to depreciation. 285.78 245.00

Total A 285.78 245.00

(B) Deferred tax AssetsOn account of timing difference with regard to disallowanceof provision in income Tax. 315.70 330.00

On account of timing difference with regard to unabsorbeddepreciation, scientific research expenditure and carryforward losses. 4112.77 4558.93

Total B 4428.47 4888.93

Deferred Tax Assets (B-A) 4142.69 4643.93

In consideration of prudence, the above deferred tax assets aggregating to ̀ 4142.69 lakhs(Previous Year ` 4643.33 lakhs) has not been recognized by the Company in the financialstatements in the current year, since it is not virtually certain whether the Company will havesufficient taxable income in near future against which such deferred tax assets can be realized.The same would be considered at appropriate time keeping in view the availability of sufficientfuture taxable income against which Deferred Tax Assets can be realized.


58

NOTE NO. 14Long Term Loans and Advances


(Advances recoverable in cash or kind or forvalue to be received)1. Unsecured considered good :

a) Deposits 62.32 61.14b) Others w 242.76 204.49

2. Unsecured Considered doubtful 39.57 39.57

344.65 305.20

Less : Provision for doubtful advances 39.57 39.57

305.08 265.63

w Include Due from DirectorsMaximum balance due from Directors at any time during the year Nil NilBalance at the end of the year Nil Nil

NOTE NO. 15Inventories


Raw Materials and Components* 1,496.13 1,733.58Stores and Spares 181.28 169.63Loose Tools and Consumables* 321.49 314.73Work-in-progress 573.12 623.33Finished goods 1,038.43 1,013.12Material-in-transit 58.91 146.04Material under Inspection - 18.98Disposal Stores 240.32 153.31Other Stock # 28.40 40.58

3,938.08 4,213.30Less : Provision for Inventory Obsolescence 363.13 356.38

Provision for material lying with sub Contractor doubtful of recovery 21.63 17.84

3,553.32 3,839.08

*Raw - materials, loose tools and consumables lying with sub-contractors amount to ̀ 68.57lakhs (Previous year ̀ 116.43 lakhs).# Other stocks includes Petrol Pump of ` 20.08 lakhs (Previous Year ` 26.47 lakhs)a. The Company held no security in respect of material lying with third parties/contractors

to the tune of ̀ 68.57 lakhs (Previous year ` 116.43 lakhs).b. Provision available for material doubtful of recovery is ` 21.63 lakhs (Previous year

` 17.84 lakhs).


59

NOTE NO. 16Trade Receivables


UnsecuredDebts outstanding for a period exceeding 6 monthsConsidered good 86.02 100.93Considered doubtful 375.68 407.08

461.70 508.01Other debts considered good 174.85 139.05

636.55 647.06Less : Provision for doubtful debts 375.68 407.08

260.87 239.98

a. As on 31.03.2013 there is an outstanding of ̀ 85.65 lakhs (Previous year ̀ 90.59 Lakhs)against M/s Amausi Motors Limited, Lucknow. Pursuant to the arrangement enteredinto by the company for liquidating the balances, the outstanding has come down duringthe year by ` 4.94 Lakhs (Previous year ` 5 lakhs). The outstanding is expected to beliquidated in the following years.

b. Legal proceedings are in progress for recovery of outstanding in case of 37 dealers, theamount involved, as on 31.3.2013 is ̀ 335.86 Lakhs. (Previous year 35 dealers amountingto ̀ 359.22 lakhs) against which provision has been made.

c. As a measure of conservatism generally provision is being made for Debtors where thereis no transaction for three years or where the company has initiated legal case againstdefaulting debtors.

NOTE NO. 17Cash and Bank Balances


Cash and stamps in hand 14.26 2.44Cheques in hand 51.54 1.98Balance with banks to be held as margin money or securityagainst borrowings, guarantees and other commitments* 3,072.26 3,036.39Balances with Scheduled Banks 198.54 210.26

3,336.60 3,251.07

*Includes :1. Term Deposits for ` 50.55 lakhs (Previous Year ` 50.40 lakhs) for E.S.I. Case, Court

Order & Welfare Fund.2. Term Deposits for ` 1804.00 lakhs (Previous Year ` 1660.00 lakhs) held against LC

margin.3. Term Deposits for ̀ 1217.71 lakhs (Previous Year ̀ NIL) given as security against Bank

Guarantee, Cash Credit & Overdraft.


60

NOTE NO. 18Short Term Loans And Advances


(Advances recoverable in cash or kind or for value to be received)1. Secured considered good 0.01 0.012. Unsecured considered good :

a) Deposits 67.23 53.02b) Others w 369.51 683.89

3. Unsecured Considered doubtful 163.32 163.32

600.07 900.24

Less : Provision for doubtful advances 163.32 163.32

436.75 736.92

w Include Due from DirectorsMaximum balance due from Directors at any time during the year Nil NilBalance at the end of the year Nil Nil

NOTE NO. 19Other Current Assets


Interest accrued on Term deposits 91.81 86.04

91.81 86.04

NOTE NO. 20Sales


Three-Wheeler 19,020.74 20,655.36Spare-parts 546.27 654.37Petrol, Diesel, Lubricants etc.* 1,415.25 1,364.13

20,982.26 22,673.86

*Includes 49,070.26 ltrs. of petrol, diesel, oil etc. value ̀ 27.28 lakhs (Previous year 64,321.94ltrs. Value ` 30.75 lakhs) consumed for internal use.


61

NOTE NO. 22Consumption of Materials

Year Ended Year Ended31.03.2013 31.03.2012` in Lakhs ` in Lakhs

(I) Consumption of Materials :a) Raw Materials and Components

Opening Stock 1,733.58 1,142.02Add : Purchases 13,046.32 15,011.20

14,779.90 16,153.22b) Less :

i) Closing Stock 1,496.13 1,733.58ii) Shortages in Inventory written off 0.01 -

1,496.14 1,733.58c) Consumption of Materials (a - b) 13,283.76 14,419.64

(II) Petrol Pumpa) Opening Stock 26.47 17,41

Add : Purchases 1,376.51 1,344.311,402.98 1,361.72

b) Less : i) Closing Stock 20.08 26.47 ii) Shortages written off 0.21 0.24

20.29 26.71c) Cost of saes at Petrol Pump (a - b) 1,382.69 1,335.01

a. The consumtion of material is derived as a balancing figure by adding opening inventorywith purchases during the year and deducting closing inventory.

NOTE NO. 21Other Income


Miscellaneous ReceiptsSale of :a) Empties - 1.41b) Miscellaneous Items & Scrap 1.44 122.57Interest on :a) Term deposits 297.86 183.34b) Others 3.22 3.09Royalty - 61.20Excess Provision written back 54.12 6.67Other receipts 11.84 18.33

TOTAL 368.48 396.61

a. The company has initiated legal proceeding against FWL for recovery of royalty due of ̀91.57 lakhs. The Company has terminated Licensing Agreement with M/s Fine WhiteLine Limited (FWL) vide letter dated 03.04.2012. Accordingly no minimum royalty interms of licensing agreement has been shown during the current financial year.


62

NOTE NO. 23Accretion / (Decretion) to Stock


Opening StockFinished Goods 1,013.12 1,232.64Work-in-progress 623.33 681.17Disposal Stores 153.31 118.83

A 1,789.76 2,032.64

Closing StockFinished Goods 1,038.43 1,013.12Work-in-progress 573.12 623.33Disposal Stores 240.32 153.31

B 1,851.87 1,789.76

(Accretion) / Decretion (A - B) (62.11) 242.88

NOTE NO. 24Employees' Benefit Expenses


Salaries, Wages and Bonus* 2,487.90 2,696.90Leave Encashment 142.42 86.31Contribution to PF 168.97 196.02Employer's share of Pension Contribution 51.88 65.52Interest Subsidy on House Building Loan 1.11 1.39Contribution to ESI Scheme 23.14 17.52Contribution to Employees' Group Insurance 13.97 17.28Medical benefits 96.72 107.77Canteen expenses 60.06 57.82Transport expenses 91.10 90.95Rent (Leasehold accommodation) 0.16 0.15Gratuity 159.90 43.70Leave travel assistance 19.49 25.49Uniform 12.06 1.91Benevolent expenses 1.44 3.05Children education allowance 0.41 0.67Other expenses 72.35 59.40Adhoc Payment 19.16 - Total 3,422.24 3,471.85

* Includes stipend paid to the trainees/apprentices ` 32.62 lakhs (Previous year ̀ 27.77lakhs).


63

NOTE NO. 25Other expenses of Manufacture, Administration, Selling and Distribution


Stores, Spares and Tools 385.74 438.12Power & fuel 426.66 365.71Repairs : a) Building 8.32 12.52

b) Plant & Machinery 79.96 85.32c) Others 33.77 42.54

Research and Development 10.62 11.19Excise Duty with Cess 158.73 150.56Rent 24.23 22.05Postage, Telegram and Telephone 13.19 15.29Directors' Travelling Expenses 4.63 10.72Travelling Expenses 29.00 35.44Printing and Stationery 23.76 18.21Board Meeting Expenses 0.06 0.37Legal Expenses 69.31 40.92Consultancy Charges 9.10 11.21Rates and Taxes 3.50 4.32Vehicle Running and Maintenance 6.45 6.94Bank Charges 11.98 20.29Insurance 6.72 3.37Miscellaneous Expenses 12.65 22.85Demands and Interest on Taxes 0.74 0.82Advertisement & Sales Promotion Expenses 10.12 9.74Freight & Packing Expenses 202.80 229.32Service Expenses (Free Coupon/After Sales Service) 59.65 67.95Cash Discount & Incentives 6.29 8.87Entry Tax 17.28 16.97Loss in Exchange Rate due to Fluctuation 0.39 -Bad and Doubtful Debts, Advances and others written off 0.22 0.24Provision for doubtful debts/advances 8.04 122.44Provision for inventory obsolescence 6.74 -

Total 1,630.65 1,774.29


64

NOTE NO. 26Finance Cost


Interest on Loans and advances from :Government of India* - 1,375.51Banks 182.36 149.19Others 4.89 16.17

187.25 1,540.87

*Please refer Note No.38

NOTE NO. 27Exceptional Items


Adhoc Payment - 316.70

- 316.70

a. The Board in its 224th meeting held on May 28, 2013 approved the implementation ofnegotiated pay scale, for workmen on the rolls of the Company as on 01.04.2013 andalso decided for considering the payment of arrears to the workmen who were on therolls of the Company on 01.08.2004 when the Company starts making cash profits.Since the Company is incurring cash losses and condition has not been met during2012-13, the Company is not required to make provision of ` 269 lakhs after adjustingadhoc payment.

b. As the Company is not meeting the criteria of the guidelines for revision of salary andwages to be implemented w.e.f. 1.1.2007, no provision has been made in the Accounts.

NOTE NO. 28Earning Per Share (EPS)

2012-2013 2011-2012

Profit as per Profit & Loss Account ( ` in lakhs) (600.06) (1,993.99)Average number of Equity Shares (Face value ̀ 10 each) 53,482,255 42,992,255

Basic & Diluted Earning per share (in `) (1.12) (4.64)


65

NOTE NO. 29


Estimated amount of contracts (net of advances)remaining to be executed on Capital Accounts andnot provided for. NIL NIL

NOTE NO. 30Contingent Liabilities


Company is contingently liable for(i) Claims against the company not acknowledged

as debts.(a) Consumer Forum Cases (Refer Point No.A)(b) UP Govt.(c) Cases of Private Parties.(d) In connection with guarantee/Indemnity

given by SIL and UPSIDC to OBC (ReferPoint No. B.)

(e) SIL vs ESIC (Refer Point No.C)(f) Punjab National Bank vs SIL (Refer Point

No.D)(g) Demand Notices raised by Central Excise

and Service Tax Authorities.

(ii) Unfavorable Arbitration award in the matterbetween Ordnance Factory Board and theCompany. (Refer Point No.E)

(iii) Counter claim of M/s UPSIC (Refer Point No.F)

(iv) Employees' Cases pending before various Court(a) In Labour Court (36 in Nos.)(b) In Other (110 in Nos.)

(v) The Workmen Housing Colony(Refer Point No. G)

(vi) House Tax (Refer Point No.H)

13.00 10.0098.55 98.55

122.91 110.91

431.65 404.9427.34 66.30

213 21374.23 70.92

Plus Interest and Plus FurtherFurther Penalty Penalty

Indeterminate Indeterminate

23.85+Interest 23.85+Interestthereon thereon

9.27 9.27Plus Interest Plus Interest

Indeterminate Indeterminate

Indeterminate IndeterminateIndeterminate Indeterminate

2412.00 2412.00

2936.96 NIL


66

Point No. A

The amount involved in 11 cases (previous year 10 cases) of Consumer forum is estimated at` 13 lakhs (previous year ` 10 lakhs). In remaining 73 cases (previous year 78 cases) theamount is indeterminate.

Point No. BScooters India Limited filed a writ petition in case of SIL Vs OBC before the High Court,Lucknow Bench in 2011 against the order passed by the Debt Recovery Appellate tribunal asthe Committee of Disputes was dissolved by the Hon'ble Supreme Court order resulted inpending of the approval for approaching Court.

Point No. C

Employee State Insurance Corporation (ESIC) demanded ESI contribution of the employeesfrom SIL in contravention of the judgement and order dated 22.06.2005 passed in SIL vs BIFR& Others and Appeal No. 304 of 2002 by tribunal AAIFR. The case is pending before HighCourt, Lucknow Bench. The company has not recognized liability of ̀ 27.34 lakhs (previousyear ` 66.30 lakhs) in the books of accounts and it is shown as contingent liability.

Point No. DPunjab National Bank filed a case against SIL for the recovery against indemnity provided bySIL for loan availed by UP Tyres and Tubes. The case is pending before DRT Lucknow. Thecompany has not recognized liability of ̀ 213 lakhs (previous year ̀ 213 lakhs) in the booksof accounts and it is shown as contingent liability.

Point No. E

In the matter of arbitration case between Ordnance Factory Board and the Company, arepresentation was made in 2011 for reviewing the order passed by the Law Secretary beingarbitrary. The representation is still pending since the Law Secretary has not considered theissue on the merit of the case as pointed out by the Committee on Disputes and, therefore,pending further action, the company has not recognized liability of ̀ 23.85 lakhs plus interestthereon (previous year ̀ 23.85 lakhs plus interest thereon) in the books of accounts and it isshown as contingent liability.

Point No. F

UPSICL and Scooters India Limited jointly sponsored a scheme for the development of AncillaryEstate in the Amausi Industrial Area, Lucknow. SIL had claimed an amount of ̀ 43.05 lakhsspent on behalf of UPSICL towards such Ancillary Estate, whereas UPSICL has made acounter claim of ` 9.27 lakhs plus interest. Pending resolution of the issue the matter wentinto arbitration in the year 1985, the outcome of which is still awaited and pending clarity onthe matter, the company has not recognized counter claim as liability.

Point No. G

The Company is in physical possession of the land measuring 41 bigha, 3 biswa and 18biswansi acquired for Workmen's Housing colony under "Own Your House Scheme". Thecompensation determined by the Land Acquisition Officer of U.P. Government amounting to` 2.29 lakhs was paid by the Company. However, subsequently, some land owners enteredinto litigation for higher compensation before Nagar Mahapalika Tribunal against the StateGovernment. The U.P. State Government has filed an appeal before the Hon'ble High Court


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challenging the order of the Tribunal and final decision is still awaited. The Company has alsobeen impleaded as a party to the said appeal. The aditional liability on the part of the Company,if any, is not ascertainable.

As regards ceiling land measuring 24 bigha, 13 biswa and 16 biswansi, which is in physicalpossession of the Company, the Govt. of U.P. issued an order dated 3rd August, 2000 givingabove land to the Company for the purpose of Workmen Housing colony under "Own YourHouse Scheme" on lease for 90 years in consideratin @ ` 4000 per bigha, amounting to` 4.55 lakhs including premium. Payment was made but returned subsequently by U.P.Government. Thereafter, U.P. Government revised their earlier order vide their letter No. 919(1)1-12/2003-9151/87-92 dated 8.5.2003 demanding market price of ` 2412 lakhs, which wascontested by the Company. A recovery notice for ̀ 2412 lakhs in addition to collection chargeswas issued by Tehsildar, Lucknow.

Aggrieved by the recovery notice, Company filed writ petition in Hon'ble High Court. The Courtstayed recovery notice and ordered the Company to pay a sum of ` 4.55 lakhs to DistrictMagistrate, Lucknow. It has been complied with. Final decision of the Court is awaited.

As regards another Forest land for Workmen Housing colony under "Own Your House Scheme"measuring 4 bighas and 13 biswa, which is in physical possession of the Company, for 90years lease, the execution of conveyance deed with the State Government is pending due todelay in completion of procedural formalities.

The land held for Workmen Housing colony under "Own Your House Scheme" shall betransferred to workmen after complying with legal and other procedural formalities. Accordingly,the same has not been included in our Fixed Assets Schedule.

Point No.H

Company has been regularly paying house tax of ̀ 2.93 lakhs after rebate of 10% on everyyear in time as per demand raised by Nagar Nigam. House Tax for the financial year 2012-13was paid on 25.04.2012.

However, Nigam has imposed house tax of ̀ 2936.96 lakhs including current tax, arrears andinterest based on assessment of annual value of ̀ 1021.06 lakhs from the year 2002 and atannual value (A.V.) of ̀ 1837.58 lakhs from the year 2010, vide their Notice No. ZOV/cc/2012-13 dated 11.06.2012 and ZOV/cc/2012-13 dated 16.05.2012.

As the demand raised by Nagar Nigam, prima facie was not considered justified and correct,it was decided to challenge the above notice before Municipal Authorities. Decision is stillawaited. In view of the above, provision of ̀ 2936.96 lakhs has not been made in the annualaccounts 2012-13.

Note No. 31

Sales-tax assessment both under UPVAT and CST has been completed up to the Financialyear 2009-10. The Income-tax assessment has been completed up to assessment year2011-12 (financial year ended on March 31, 2011). The company does not foresee any liabilityagainst pending assessment.

Note No. 32The balances in the debtors/creditors accounts, claims recoverable, loans and advances,assets/materials with third parties are subject to adjustments, if any, on reconciliation, as


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most of the above balances have not been confirmed or are showing balances different fromSIL books. Details/confirmation of various deposits relating to Electricity, Customs-duty, PortTrust, Octroi, Sales-tax, Landlord and certain parties are not available/obtained.

Note No. 33The Company is in physical possession of property at 64-65, Najafgarh Road, New Delhiwhere Regional Office, North Region is located, leased out to Scooters India Limited by M/sGanesh Flour Mills Ltd. (since nationalized and vested in H.V.O.C. Ltd.). The lease agreementwith M/s Ganesh Flour Mills Ltd. has expired in 1982-83. As there is no contractual documentbetween the two Companies and based on legal opinion, no liability towards lease rent/royalty has been provided. The Company on record offered for one time settlement of ̀ 53.80lakhs for transfer of land which has not been provided in the accounts pending clarity/decisionin the matter.

Note No. 34

The Company is principally engaged in the business of manufacturing and sale of motorvehicles and spare-parts (Automobile). Accordingly, there are no other reportable segmentsas per AS-17 on segment accounting.

Note No. 35As per guidelines issued under AS-28 " Impairment of Assets", the company has assessedand found that no indication of impairment exists in relation to assets as on 31-03-2013.

Note No. 36

Related party disclosure as required by AS-18

(a) List of related parties during the financial year 2012-13

Whole-Time Directors

Shri Ajai Kumar, Chairman-cum-Managing Director(From 23th April 2008 to 13th April 2013)

Shri P.P. Sarkar, Director (Technical)(From 16th May 2007 to 15th May 2012)

Shri Rahul Bali, Director (Technical)(From 02nd April 2013 to till date)

Part-Time Director

Shri R.K. Singh (Chairman and Managing Director)(From 15th May 2013 to till date)

Shri Harbhajan Singh(From 13th September 2011 to till date)

Shri S.K. Goyal(From 17th May 2012 to till date)

(b) Transaction with related parties (` In lakhs)

Sl.No. Nature of Transaction Associates Directors Total

1 Remuneration - 12.60 12.60


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Note No. 37

In absence of information from vendors with regard to their registration (filing of memorandum)under The Micro, Small Medium Enterprises Development Act, 2006, the information is NIL.

Note No. 38

The company has been declared sick under section 3(1) (o) of the SICA by BIFR in itsmeeting held on February 18, 2010 consequent to the reference made by the company, dueto erosion of its net worth as on March 31, 2009. The Cabinet committee, GOI has approvedthe revival package of ` 20,196 lakhs, which inter-alia includes the infusion of fresh funds,conversion of plan & non plan loan in to equity & waiver of interest. The Draft RehabilitationScheme (DRS) is under preparation by Operating Agency (SBI) and shall be submitted indue course before BIFR for sanction. Pending finalization of DRS & sanction by BIFR theMiscellaneous application filed by the Company for early implementation of revival packagehas been approved by BIFR in its hearing dated June 19, 2013. In terms of section 18 and32A of SICA, wherein BIFR is vested with power to pass orders overriding the provisions ofother Acts/Rules viz. The Companies Act 1956, SEBI (ICDR) Regulations 2009, etc., providinginteralia for financial reconstruction, alteration in MOA/AOA, issue/allotment of shares,reduction of share capital of the sick company and accordingly the Company has restructuredthe annual accounts for the year ended at March 31, 2013 in the following manner:

a. Increase in Authorised Share Capital: The authorized share capital of the Companyhas been increased from ` 7500 lakhs divided in to 750 lakhs equity shares of ` 10/-each to ` 25,000 lakhs divided in to 2500 lakhs equity shares of ` 10/- each withretrospective effect from 31st March, 2013 to give effect to the BIFR order. Further noprovision has been made for legal fees amounting to ̀ 87.50 lakhs towards the aforesaidincrease in authorized share capital in terms of BIFR order.

b. Conversion of Plan & Non Plan Loan in to Equity: ` 8521.12 lakhs (Plan loan -` 193.26 lakhs & Non Plan loan – ` 8327.86 lakhs) of the existing term Plan & NonPlan Loan as of 31st March, 2012 has been converted into equity share capital of` 8521.12 lakhs by issue of 852.11 lakhs equity share of ` 10 each at par.

c. Issue & allotment of Equity shares against share application money pendingallotment: The Company has issued and allotted equity share capital of ` 1049.00lakhs by issuing 104.90 lakhs equity shares of ̀ 10/- each at par against share applicationmoney pending allotment standing in the annual accounts as on 31st March, 2012.

d. Reduction of Equity Share Capital against Accumulated losses: Reduction ofEquity Share Capital of the company held by the Government of India by ` 8521.12lakhs as on 31st March 2013 against Accumulated Losses.

The Equity Share Capital as on 31.03.2013 are as follows:

Particulars Amount ( ` in lakhs)

Issued share capital as on 31.03.2012 (4,29,95,500 shareof ̀ 10/- each)

Add : Conversion of Plan & Non Plan Loan into equity(8,52,11,171 share of ̀ 10/- each)

4, 299.55

8,521.12


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e. Waiver & write off of Interest accrued & due and Interest accrued but not dueon Plan & Non Plan Loan :

i. The existing Interest Accrued & Due as on 31 March, 2012 amounting to ̀ 2,217.38Lakhs on GOI loan (Plan loan of ` 193.26 lakhs & Non plan loan of ` 8,327.86lakhs) has been written off against accumulated losses and no further interesthas been provided for on the aforesaid loan from 31st March, 2012 onwards.

ii. The existing Interest Accrued & Not Due of 31st March, 2012 amounting to` 420.00 lakhs on GOI loan (Plan loan of ` 193.26 lakhs & Non plan laon of` 8,327.86 lakhs) has been written off against the accumulated losses and nofurther interest has been provided on the aforesaid loan from 31st March, 2012onwards.

iii. No provision of interest on Non Plan Loan of ` 189.00 lakhs released during thefinancial year 2012-13 has been made.

The Accumulated Losses has been written off by ̀ 11,158.72. The details are as follows:

f. The Company has not made any provision of Income Tax, if any required undersection 115JB of the Income Tax Act, 1961 regarding Minimum Alternate Tax andunder section 41(1) on benefit rising out of waiver of interest on all GOI loansincluding penal interest and other financial support for restructuring by GOI &remissions granted under the scheme.


Reduction off equity share capital against accumulated losses 8,521.12

Interest accrued & due as on 31.03.2012 written off 2,217.38

Interest accrued but not due as on 31.03.2012 written off 420.22

Total 11,158.72


Add : Issued of Share against share application money pendingallotment (1,04,90,000 share of ̀ 10/- each)

Total

Less : Reduction of equity share capital against accumulatedlosses (8,52,11,171 share of ̀ 10/- each)

Issued share Capital as on 31.03.2013 (5,34,85,500 shareof ̀ 10/- each)

1049.00

13,869.67

8,521.12

5,348.55


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NOTE NO. 40

Additional information pursuant to Revised Schedule VI part II of the CompaniesAct, 1956

1. Stock and Turnover for the year ended Mar 31,2013

Stocks

At Commencement At Close Turnover

Nos ` in Lakhs Nos ` in Lakhs Nos ` in Lakhs

Vikram Three Wheeler 1,093 956.03 1,063 960.43 15,837 19,020.74(1,165) (1,169.79) (1,093) (956.03) (17,584) (20,655.36)

Spares and Components - 57.09 - 78.00 - 546.27(-) (62.84) (-) (57.09) (-) (654.37)

Petrol Pump stock* 47,228 26.47 32,308 20.08 2,559,644 1,415.25(Quantity Ltrs.) (36,600) (17.41) (47,228) (26.47) (2,702,901) (1,364.13)

Explanatory Notes :* Includes value of empty drums, containers etc lying in Petrol Pump stock.(1) Figures in brackets relate to previous year.(2) Petrol Pump turnover represents the sale of Diesel, Petrol & Other Oil & Lubricants. The

Company purchased 25,45,060 ltrs. of Diesel/Petrol during the year (Previous Year27,13,968 ltrs). There has been evaporation loss of 336.10 ltrs. (Previous Year 438.20ltrs.)

(3) Turnover includes the following export sales 2012-13 2011-12

Nos ` in Lakhs Nos ` in Lakhs

Vikram Three Wheeler - - - -Spares & components - 38.23 - 60.36

Note : Export sales includes deemed export of ` 8.03 lakhs (Previous Year ` 10.44 lakhs).

2. C.I.F. Value of Import, Expenditure and Earnings in foreign currencies.

2012-13 2011-12` in Lakhs ` in Lakhs

A. C.I.F. Value of ImportsSpare parts/Components - 8.80Capital goods - -Others 1.49 2.45

1.49 11.25


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3. Details of Raw Materials Consumed

(i) Raw Mateials (including spare parts) and Compoents.

2012-13 2011-12

Value Value

Materials Unit Qty. (` in Lakhs) Qty. (` in Lakhs)

Ferrous Kg. 1,912,383 664.23 2,374.003 856.74Mtrs 139,789 383.81 160,869 466.94

Non-ferrous Kg. 200,482 270.26 231,211 302.90B.O.S.F. - - 3,660.35 - 3,890.40Tyres & Tubes Nos 130,198 984.41 141,285 1,121.83Spare-parts Components - - 7,320.70 - 7,780.83

13,283.76 14,419.64

(ii) Value of imported and indigenous raw-materials consumed (including spare-parts andcomponents)

2012-2013 2011-12

` in Lakhs % ` in Lakhs %

(a) Imported (CIF, custom duty 1.89 0.01 13.94 0.10

and other charges)

(b) Indigenous 13,281.87 99.99 14,405.70 99.90

13,283.76 100.00 14,419.64 100.00

2012-13 2011-12` in Lakhs ` in Lakhs

B. Expenditure in foreign currenciesOn account of royalty, know-how, professionalconsultation fees, interest, provisions and others - -

- -

C. Earnings in foreign currenciesExport of goods calculated on F.O.B. Basis* 30.19 49.93Royalty - -

30.19 49.93

Explanatory Notes :1. Earnings in foreign currencies are after adjustment of gain or loss on exchange rate as

applicable.* Export Sales does not include Deemed Export.


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4. Auditor's Remuneration

2012-13 2011-12` in Lakhs ` in Lakhs

(a) Statutory Auditor's Audit fee 0.67 0.67(b) Fee for Certification & Consultation 1.18 0.90(c) Cost Audit Fees 0.24 0.24(d) Tax Audit Fees 0.22 0.22

2.31 2.03

The above figures includes service tax.

Note No. 41Previous year's figures have been regrouped, rearranged and recast, wherever necessary, tomake them comparable with those of the current year.





Membership No.73449


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SCOOTERS INDIA LIMITED(A Government of India Enterprise)

Registered Office : Lucknow – Kanpur Road,(16th Mile Stone), Post Bag No.23 (G.P.O.),

P.O. Sarojini Nagar, Lucknow – 226008

NOTICE

Notice is hereby given that the 41st Annual General Meeting of the members of Scooters IndiaLimited will be held at 3.00 p.m. on Monday, the 30th day of September, 2013 , at theKisan Mandi Bhawan Auditorium, Vibhuti Khand, Gomti Nagar, Lucknow-226 010,Uttar Pradesh to transact the following business:

ORDINARY BUSINESS :

1. To receive, consider and adopt the Directors’ Report, the Auditors’ Report and theAudited Balance Sheet and Profit & Loss Account of the Company for the yearended 31.03.2013.

2. To appoint a director in place of Mr. Harbhajan Singh, who retires by rotation andbeing eligible has offered himself for re-appointment.

3. To consider and, if thought fit, to pass, with or without modification, the followingresolution as a Special Resolution:

“RESOLVED that pursuant to Section 224(8) (aa) of the Companies Act 1956, andother applicable provisions, if any, of the Companies Act, 1956, the remuneration ofthe Statutory Auditors appointed by Comptroller & Auditor General of India (C & AG)under section 619(2) of the said act, be and is hereby approved to be fixed at Rs.60,000/- for the year 2013-14.”

SPECIAL BUSINESS :

4. Regularization of Shri R K Singh as Director

To consider and, if thought fit, to pass with or without modifications, the following asOrdinary Resolution:

“RESOLVED that Shri R K Singh be and is hereby regularized as an ordinary directorin terms of the provision of section 257 of the Companies Act, 1956.”

5. Regularization of Shri Rahul Bali as Director

To consider and, if thought fit, to pass with or without modifications, the following asOrdinary Resolution:

“RESOLVED that Shri Rahul Bali be and is hereby regularized as an ordinary directorin terms of the provision of section 257 of the Companies Act, 1956.”

6. Increase in Authorised Share Capital of the Company

To consider and, if thought fit, to pass, with or without modification, the followingresolution as Ordinary Resolution:


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“RESOLVED that pursuant to the order of Board for Industrial & FinancialReconstruction (BIFR) dated June 24, 2013 and pursuant to the provisions of section16, 31, 94, 97 and other applicable provisions, if any, of the Companies Act, 1956,the increase in the authorised share capital of the company from ` 75,00,00,000/-(Rupees seventy five crores) divided in to 7,50,00,000 (Seven crores fifty lacs) equityshares of ̀ 10/- each to ̀ 2,50,00,00,000/- (Rupees Two Hundred Fifty Crores only)divided in to 25,00,00,000 (Twenty Five crores) equity shares of ` 10/- each witheffect from 31st March, 2013 be and is hereby ratified and approved.

“RESOLVED FURTHER that Clause V of the Memorandum of Association of theCompany be and is hereby amended by way of deletion of existing clause V andreplacement thereof by new clause V reading as under:

“The share capital of the company is ̀ 2,50,00,00,000/- (Rupees Two Hundred FiftyCrores only) divided in to 25,00,00,000 (Twenty Five crores) equity shares of ̀ 10/-each with power to increase or reduce the capital subject to the provisions of theCompanies Act, 1956.”

“RESOLVED FURTHER that CMD, D(T) be and is hereby severally authorised tosign necessary forms, returns, documents, notices, etc and to do all such acts asmay necessary and proper to give effect to this resolution.

7. Alteration in the Articles of Association of the Company:

To consider and, if thought fit, to pass, with or without modification, the followingresolution as a Special Resolution:

“RESOLVED that pursuant to the order of Board for Industrial & FinancialReconstruction (BIFR) dated June 24, 2013, the alteration in the articles of associationof the Company with effect from 31st March, 2013, by way of deletion of existingclause 4 and replacement thereof by new clause 4 reading as under, be and ishereby ratified & approved.

“The Authorised Share Capital of the company shall be such amounts and be dividedinto such shares as may from time to time, be provided in Clause V of the Memorandumof Association with power to increase or reduce the capital in accordance with theCompany’s regulations and legislative provisions for the time being in force in thatbehalf with the powers to divide the share capital, whether original or increased ordecreased into several classes and attach thereto respectively such ordinary,preferential or special rights and conditions in such a manner as may for the timebeing be provided by the Regulations of the Company and allowed by law.”

“RESOLVED FURTHER that CMD, D(T) be and is hereby severally authorised tosign necessary forms, returns, documents, notices, etc and to do all such acts asmay necessary and proper to give effect to this resolution.

8. Issue of shares to Government of India against conversion of loan and shareapplication money pending allotment:



77

“RESOLVED THAT, pursuant to the order of Board for Industrial & FinancialReconstruction (BIFR) dated June 24, 2013 and in accordance with the provisions ofSection 81(1A) and other applicable provisions, if any, of the Companies Act, 1956and all other applicable laws and regulations; exemption under regulation 70(1)(c) ofSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations, 2009 (“SEBI (ICDR) Regulations”), the relevant provisions of theMemorandum & Articles of Association of the Company and the provisions of theListing Agreement(s) with the stock exchanges on which the securities of the Companyare listed or may hereafter be listed (including any amendment to or re-enactment ofall or any of the aforesaid) and subject to all such approvals, permissions, sanctionsand consents, if any, as may be required under applicable laws and regulations ofconcerned authorities, bodies and agencies and subject to such conditions andmodifications as may be prescribed by any of the aforesaid authorities, bodies andagencies and which may be agreed to by the Board of Directors (hereinafter referredto as the “Board”, which term shall be deemed to include any committee which theBoard may constitute to exercise its powers including the powers conferred by thisresolution), the issue and allotment of 9,57,01,171 (Nine Crores Fifty Seven LacsOne Thousand One Hundred Seventy One) [8,52,11,171 (on account of conversion ofloan) +1,04,90,000 (on account of share application pending allotment)] Equity sharesof face value of ` 10/- (Rupees Ten) each at Par to the Government of India on 31st

March, 2013 on preferential allotment basis be and is hereby ratified and approved.

“RESOLVED FURTHER THAT, the equity shares so issued shall be subject to theMemorandum and Articles of Association of the Company and shall, upon being soissued and allotted, rank pari-passu in all respects including dividend with the thenexisting equity shares of the Company.”

RESOLVED FURTHER THAT, the Board be and is hereby authorized to accept anymodifications in the proposal as may be required by the agencies involved in suchissues but subject to such conditions as the BIFR or such other appropriate authoritiesmay impose at the time of their approval as agreed by the Board.

RESOLVED FURTHER THAT, for the purpose of giving effect to the above resolutionand any offer, issue and allotment of securities, the Board be and is hereby authorizedto do all such acts, deeds, and things as may be necessary, desirable or incidentalthereto and matter connected therewith and to issue and sign all deeds, documents,instruments, and writings and to pay any fees, commission, costs, charges andother outgoings in relation thereto and to settle all questions, and to give such directionsthat may be necessary or arise in regard to or in connection with any such offer,issue or allotment of securities and utilization of the issue proceeds, as it may, in itsabsolute discretion, deem fit and any such action, decision or direction of the Boardshall be binding on all members of the Company.”

9. Issue of shares to Government of India against fresh proceeds:



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“RESOLVED THAT, pursuant to the order of Board for Industrial & FinancialReconstruction (BIFR) dated June 24, 2013 and in accordance with the provisions ofSection 81(1A) and other applicable provisions, if any, of the Companies Act, 1956and all other applicable laws and regulations; exemption under regulation 70(1)(c) ofSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations, 2009 (“SEBI (ICDR) Regulations”), the relevant provisions of theMemorandum & Articles of Association of the Company and the provisions of theListing Agreement(s) with the stock exchanges on which the securities of the Companyare listed or may hereafter be listed (including any amendment to or re-enactment ofall or any of the aforesaid) and subject to all such approvals, permissions, sanctionsand consents, if any, as may be required under applicable laws and regulations ofconcerned authorities, bodies and agencies and subject to such conditions andmodifications as may be prescribed by any of the aforesaid authorities, bodies andagencies and which may be agreed to by the Board of Directors (hereinafter referredto as the “Board”, which term shall be deemed to include any committee which theBoard may constitute to exercise its powers including the powers conferred by thisresolution), the issue and allotment up to 7,03,80,000 (Seven Crores Three Lacs EightyThousand) Equity shares of face value of ` 10/- (Rupees Ten) each at Par in one ormore tranches to the Government of India against consideration of ` 70,38,00,000/-(Rupees Seventy Crores Thirty Eight Lacs only) on preferential allotment basis be andis hereby ratified and approved on such terms and conditions as may be determinedby the Board in its absolute discretion; with power to settle details as to the form andterms of issue of the Equity shares and all other terms, conditions and mattersconnected therewith including to accept any modification thereto or therein as may berequired by persons involved with any such issue of Equity Shares subject, however,to all applicable laws and within and under the limits permitted under law, and all otherterms, conditions and matters connected therewith and to accept any modificationsin the proposal as may be required by the authorities/parties involved in such issuesbut subject to such conditions as the Securities and Exchange Board of India or suchother appropriate authorities may impose at the time of according/granting theirapprovals, consent, permissions and sanctions as agreed by the Board.”

“RESOLVED FURTHER THAT, the equity shares so issued shall be subject to theMemorandum and Articles of Association of the Company and shall, upon being soissued and allotted, rank pari-passu in all respects including dividend with the thenexisting equity shares of the Company.”

RESOLVED FURTHER THAT, the Board be and is hereby authorized to accept anymodifications in the proposal as may be required by the agencies involved in suchissues but subject to such conditions as the Securities and Exchange Board of Indiaor such other appropriate authorities may impose at the time of their approval asagreed by the Board.

RESOLVED FURTHER THAT, for the purpose of giving effect to the above resolutionand any offer, issue and allotment of securities, the Board be and is hereby authorizedto do all such acts, deeds, and things as may be necessary, desirable or incidentalthereto and matter connected therewith and to issue and sign all deeds, documents,


79

instruments, and writings and to pay any fees, commission, costs, charges andother outgoings in relation thereto and to settle all questions, and to give such directionsthat may be necessary or arise in regard to or in connection with any such offer,issue or allotment of securities and utilization of the issue proceeds, as it may, in itsabsolute discretion, deem fit and any such action, decision or direction of the Boardshall be binding on all members of the Company.”

10. Reduction of Share Capital:


“RESOLVED THAT pursuant to the order of Board for Industrial & FinancialReconstruction (BIFR) dated June 24, 2013 & pursuant to Section 100 read withsection 620 of the Companies Act 1956, the reduction in the paid-up share capital ofthe Company by ̀ 85,21,11,710/- (consisting of 8,52,11,171 equity shares of ̀ 10/-each fully paid-up) by cancelling and extinguishing 8,52,11,171 equity shares heldby Government of India, as per details mentioned below, against the accumulatedlosses of the Company with effect from 31st March, 2013, be and is hereby ratifiedand approved.

Name of No of Shares Distinctive No’s

Shareholder From To

President of India 8,52,11,171 53482256 138693426

FURTHER RESOLVED THAT for the purpose of giving effect to the above Resolution,the CMD & D(T) be and is hereby severally authorized to do and perform all suchacts, deeds, matters and things as it may in its absolute discretion deem necessaryor desirable and to settle any question, difficulty or doubt that may arise in regard tothe subject matter of the above Resolution as it may in its absolute discretion deemfit and proper.

By order of the Board of Directors

Sd/- R K Singh

Chairman & Managing DirectorPlace : New DelhiDate : August 23, 2013


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NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TOAPPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF. SUCH PROXYNEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BEEFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURSBEFORE THE COMMENCEMENT OF THE MEETING. THE PROXY FORM ISENCLOSED AT THE END OF ANNUAL REPORT.

2. Only members carrying the attendance slips or holders of valid proxies registered withthe company will be permitted to attend the meeting. In case of shares held in jointnames or shares held under different registered folios wherein the name of the soleholder/first holder is same, only the first joint holder/sole holder or any proxy appointedby such holder, as the case may be, will be permitted to attend the meeting.

3. The Register of Members and the Share Transfer Books of the company will remainclosed from 23.09.2013 to 30.09.2013 (both days inclusive).

4. Members seeking further information on Accounts or any matter contained in the Noticeare requested to write to the company at least 10 days before the meeting so thatrelevant information can be kept ready at the meeting.

5. Members/Proxies attending the meeting are requested to bring their copy of AnnualReport and exchange, the duly filled attendance slip attached, with entry slip for entranceto the meeting hall.

6. Members should notify change in their addresses, if any, specifying full address withPIN CODE to the company’s registered office quoting their registered Folio No.

7. If shares are held under more than one folio, the same may kindly be consolidated forconvenient reference.

8. Entry to the Auditorium will be strictly against Entry slip available at the counters atthe venue and against exchange of Attendance Slip.

9. Member can avail of nomination facility by filling Form 2B, as prescribed underCompanies (Central Governments) General Rules & Forms, 1956, with the Company.Blank forms will be supplied on request.

10. Members are requested to note that address of M/s Skyline Financial Services PrivateLimited, Registrar & Transfer Agent of the Company has changed to D-153/A, 1STFLOOR OKHLA INDUSTRIAL AREA PHASE -1 , NEW DELHI-110020.


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EXPLANATORY STATEMENT UNDER SEC.173(2) OF COMPANIES ACT 1956

Item No. 4 & 5:

Shri R K Singh has been appointed as a Chairman & Managing Director of the company onadditional Charge basis, under article 112 (f) of the Articles of Association of the Company,vide Order No.3-23/2012-PE-VI dated 08.05.2013 from Government of India, Ministry of HeavyIndustries & Public Enterprise, Department of Heavy Industry. Shri Rahul Bali has beenappointed as a Director (Technical) of the Company, under article 112 (f) of the Articles ofAssociation of the Company, vide Order No.3-15/2012-PE-VI dated 04.01.2013 fromGovernment of India, Ministry of Heavy Industries & Public Enterprise, Department of HeavyIndustry.

Notice in writing under section 257 of the Companies Act, 1956 has been received frommember signifying their intention of Proposing Shri R K Singh & Shri Rahul Bali as candidatefor the office of Directors.

The Boards commends the resolution set out in the item No.4 & 5 of the notice for yourapproval as an ordinary resolution. None of the Director except Shri R K Singh & Shri RahulBali are interested in resolution for their respective re-appointment.

Item no. 6, 7, 8, 9 & 10:

The Company has been declared sick under section 3(1)(o) of the SICA, by BIFR in itsmeeting held on February 18, 2010, consequent to the reference made by the Company, dueto erosion of its net worth as on March 31, 2009. The GOI has vide letter no. F. No. 3-33/2009–PE VI dated 22.02.2013 conveyed that Cabinet has approved the revival package of` 201.96 crores, which inter-alia includes the infusion of fresh funds, conversion of plan & nonplan loan in to equity & waiver of interest and directed for taking necessary approval fromBIFR. The Draft Rehabilitation Scheme (DRS) is under preparation by Operating Agency(SBI) and shall be submitted in due course before BIFR for sanction. Pending finalization ofDRS & sanction by BIFR the miscellaneous application filed by the Company for seekingnecessary permission/appropriate directions for reliefs & concessions enabling issue of shares,restructuring of balance sheet and for release of funds for capital expenditure and workingcapital in line with the cabinet decision for revival of SIL was approved by BIFR in its hearingdated June 19, 2013.

In terms of BIFR order dated June 24, 2013, the Board of Directors of the Company hadapproved the increase in the authorized share capital of the Company from ̀ 75,00,00,000/-(Rupees seventy five crores) divided in to 7,50,00,000 (Seven crores fifty lacs) equity sharesof ` 10/- each to ` 2,50,00,00,000/- (Rupees Two Hundred Fifty Crores only) divided in to25,00,00,000 (Twenty Five crores) equity shares of ̀ 10/- each with effect from 31st March,2013 and Clause V of the Memorandum of Association & Article 4 of the Articles of Associationof the Company has been altered to give effect to the above change.

Further in terms of BIFR order dated June 24, 2013 the Board of Directors of the Companyhad approved the conversion of the GOI term loan amounting to ̀ 85,21,11,710 (Plan loan -` 1,93,25,710 & non plan ̀ 83,27,86,000) as of 31st March, 2012 into equity share capital of` 85,21,11,710 by issue of 8,52,11,171 equity share of ̀ 10/- each at par. The aforesaid order


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also envisaged issue and allotment of 1,04,90,000 equity shares of ` 10/- each against theShare Application money pending allotment amounting to ̀ 10,49,00,000 as on 31st March,2012. In terms of BIFR order issue and allotment of aforesaid share was to be made as on31st March, 2013 to give effect in the annual accounts for the year ended at 31st March, 2013.Accordingly the Board has approved the aforesaid issue and allotment of shares.

The aforesaid order of BIFR also envisages issue of 7,03,80,000 (Seven Crores Three LacsEighty Thousand) Equity shares of face value of ` 10/- (Rupees Ten) each at Par in one ormore tranches to the Government of India against fresh proceeds of ` 70,38,00,000/- forCAPEX.

In terms of regulation 70(1)(c) of Chapter VII of SEBI (ICDR) Regulations, 2009, SEBI preferentialissue guidelines are not applicable of the aforesaid issue of shares.

The Board has also approved the reduction of paid up share capital of the Company by` 85,21,11,710/- (consisting of 8,52,11,171 equity shares of ` 10/- each fully paid-up) bycancelling and extinguishing 8,52,11,171 equity shares held by Government of India againstaccumulated losses of the Company with effect from 31st March, 2013 in terms of BIFR order.

The Board commends the resolutions proposed at item no. 6, 7, 8, 9 & 10 for your ratificationand approval.

None of the Directors is concerned or interested in the above resolution.

By order of the Board of Directors

Sd/- R K Singh

Chairman & Managing Director

Place : New DelhiDate : August 23, 2013


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GREEN INITIATIVES

In terms of the Circulars No. 17/2011 of 21 April 2011 and 18/2011 of 29 April 2011 issued by

the Ministry of Corporate Affairs (MCA) as part of its "Green Initiative in Corporate Governance",

MCA allows paperless compliances including service of a notice/document by companies to

their shareholders through electronic mode. The Company, therefore, proposes to send

documents required to be sent to shareholders like Notices of General Meetings (including

AGM), Audited Financial Statements, Directors' Report, Auditors' Report, etc. to the

shareholders in electronic form to the e-mail IDs provided by them and made available to the

Company. This will also ensure prompt receipt of communication and avoid loss in postal

transit. These documents will also be available on the Company's website

www.scootersindia.com for download by the shareholders. The physical copies of the Annual

Report will also be available at the Company's Registered Office in Lucknow for inspection

during office hours. Shareholders will be entitled to be furnished, free of cost, with a copy of

the Balance Sheet of the Company and all other documents required by law to be attached

thereto including the Profit and Loss Account and Auditor' Report, upon receipt of a requisition

from the shareholders, any time as a Member of the Company. In order to enable the Company

to send such documents in electronic form, the shareholders are requested to register their

e-mail IDs with the Company on its e-mail [email protected].


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Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, followinginformation is furnished about the Directors

Shri R K Singh – aged 46 years, an IAS officer of 1991 batch of Uttar PradeshCadre, has been appointed as Chairman & Managing Director on additional chargebasis w.e.f. 15.05.2013. He holds qualification of B. Tech in Thermal Science andhas rich experience of about 21 years in Department of Land Revenue Mgmt &District, Environment & Forests, Youth affairs & sports, Urban Development, Labour& Employment, Human Resource Development, and Agriculture & Cooperation, andin Heavy Industries. He has very rich and comprehensive experience in the field ofvarious developments and management projects.

Before joining SIL he has worked with CADRE and held so many designation in thesame Organization as SDO, Assistant Commissioner, Deputy Secretary, JointSecretary, Special Secretary, District Magistrate, Collector & D M, and Director andnow presently he is on Central Deputation as Joint Secretary in Ministry of HeavyIndustries. He is on Board of several PSU’s including Instrumentation Limited, BharatBhari Udyog Nigam Limited, Engineers Projects (India) Limited, Richardson & Cruddas(1972) Limited, Tungbhadra Steel Products Limited.

Shri Harbhajan Singh - aged 54 years, an IAS Officer of 1983 Batch of Uttar PradeshCadre, has been appointed as a Part-time Official Director of SIL w.e.f. 13.09.2011.He is a post graduate in History and also a Law graduate.

Shri Harbhajan Singh served in the State of Uttar Pradesh in various capacities asAssistant/Sub-Divisional/Joint/District Magistrate; Chief Development Officer, GeneralManager of U.P. Small Industries Corporation and U.P. Finance Corporation; andgained experience in the field of Land Revenue Management and District Administrationbetween 1985 to 1997. He has worked in Education Department; IndustrialDevelopment Department; Geology and Mines Department in the capacity of SpecialSecretary; Secretary and Director and gained experience in the field of HumanResource Development; Industries; Urban Development; Mines and Minerals duringthe period 1997 to 2000.

Shri Harbhajan Singh has worked in the Ministry of Consumer Affairs, Food & PublicDistribution; Ministry of Civil Aviation; Ministry of Coal & Mines; Government of India,as Director and Joint Secretary during 2000 to 2006.

He has worked in the level of Joint Secretary and Additional Secretary in Milk Board;Food & Civil Supplies; Medical Education Department between March 2006 toDecember 2009. Presently, he is the Joint Secretary in the Ministry of Heavy Industriesand Public Enterprises, Department of Heavy Industry.

Shri S K Goyal – aged 52 years, has been appointed as a Part-time non-officialDirector of SIL w.e.f. 17.05.2012. He is a Chartered Accountant and also a CompanySecretary and belongs to Indian Cost Accounts Service, 1988 batch. Presently, he isworking as Director (Finance) in the Ministry of Heavy Industries and PublicEnterprises.


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He is also Part-time non-official Director of M/s Nepa Limited, M/s Cement Corporationof India Ltd, M/s Andrew Yule & co. Ltd & Bharat Bhari Udyog Nigam Ltd. .

He has worked as Director in Ministry of Micro, Small & Medium Enterprises, Ministryof Finance, Department of Expenditure, O/o Chief Adviser Cost, Ministry of Defence.He has also worked as Financial Adviser (Housing) in Delhi Development Authority.

Shri Rahul Bali – aged 48 year, has been appointed as Director (Technical) w.e.f.April 02, 2013. He is a Mechanical Engineer from National Institute of Technology,Jaipur and holds Post Graduate Diploma in Business Management from MDI, Gurgaon.He has been awarded “Finance Minister’s Gold Medal” at MDI and is a Certified PMP(Project Management Professional) by PMI, USA and has wide exposure to theentire hydrocarbon value chain, automotive and manufacturing sector. He is a Lifemember of OMEGA association of Society of Petroleum Engineers (SPE) International& All India Management Association (AIMA) & member of American Society ofMechanical Engineers (ASME).

Before joining SIL Board, he had worked with ONGC as Chief Engineer (Production)with Facilities Engineering Group, Mumbai High Asset, Mumbai.

He has over 24 years’ of diverse and progressive experience in the areas of Marketing,Oil and Gas Production, Project Management both upstream and downstream oilindustry in India. Prior to joining ONGC he had worked with National EngineeringIndustry-NEI Ltd., largest bearing manufacturing company in India and had also workedon deputation with MRPL refinery - a joint sector company that was acquired byONGC in 2003- and was actively associated during its turn around.

Documents

41st ANNUAL REPORT...COMPANY WHICH HAVE OCCURRED FROM 01.04.2013 DATE : No material change and commitment have been made by the company from 01.04.2013 to date that has adverse effect