New Cover Page · AUTOMOBILE CORPORATION OF GOA LIMITED Thirtieth annual report 2009-10 2 N O T I C E NOTICE is hereby given that the 30th Annual General Meeting of the Members of

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Annual Report 2009-10

Contents

Notice.................................................................................................. 02 - 05

Directors' Report ................................................................................ 06 - 10

Management Discussion and Analysis............................................ 11 - 14

Corporate Governance Report....................................................... 15 - 25

Auditors' Report.................................................................................. 26 - 29

Balance Sheet.................................................................................... 30

Profit and Loss Account..................................................................... 31

Cash Flow Statement......................................................................... 32-33

Schedules to Accounts...................................................................... 34-40

Significant Accounting Policies......................................................... 41-43

Notes on Accounts ............................................................................ 44-53

Balance Sheet Abstract and

Company's General Business Profile ................................................ 54

1

AUTOMOBILE CORPORATION OF GOA LIMITED

BOARD OF DIRECTORSS. V. Salgaocar Chairman

D. N. Naik (upto 8.8.2009)

P. F. X. D’Lima

P. M. Telang

R. S. Thakur

S. M. Kuvelker

Steven A. Pinto (w.e.f. 28.6.2010)

N. R. Menon Managing Director

Ananth Prabhu Executive Director (Commercial) & Secretary

AUDITORSDeloitte Haskins & Sells

BANKERSState Bank of India

HDFC Bank Ltd.

REGISTERED OFFICEHonda, Sattari, Goa 403 530.

SHARE REGISTRARSTSR Darashaw Limited 6-10, Haji Moosa Patrawala Ind. Estate, 20, Dr. E. Moses Road, Mahalaxmi , Mumbai - 400 011.

30th ANNUAL GENERAL MEETING7th August, 2010.12.30 pmat Honda, Sattari, Goa 403 530.


Thirtieth annual report 2009-10

2

N O T I C ENOTICE is hereby given that the 30th Annual General Meeting of the Members of AUTOMOBILE CORPORATION OF GOA LTD. will be held on Saturday the 7th August, 2010 at 12.30 pm at the Registered Office of the Company at Honda, Sattari, Goa, to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Profit and Loss Account for the year ended March 31, 2010 and the Balance Sheet as at that date together with the Report of the Directors and the Auditors thereon.

2. To declare a Dividend for the year ended 31st March 2010.

3. To appoint a Director in place of Mr. P M Telang, who retires by rotation and is eligible for reappointment.

4. To appoint a Director in place of Mr. R S Thakur, who retires by rotation and is eligible for reappointment.

5. To appoint Auditors and fix their remuneration.

SPECIAL BUSINESS:

6. To consider, and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution

“Resolved that Mr. Steven A. Pinto who was appointed as an Additional Director of the Company by the Board of Directors on 28.06.2010 under Section 260 of the Companies Act, 1956 and who holds office up-to the date of this Annual General Meeting and in respect of whom the Company has received a notice under Section 257 of the Companies Act, 1956, from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company liable to retirement by rotation.”

Notes:

(a) The relative Explanatory Statement pursuant to Section 173 of the Companies Act, 1956, in respect of business under item No. 6 set out above and details under Clause 49 of the Listing Agreement in respect of Directors seeking appointment/re-appointment at the Annual General Meeting is annexed hereto.

(b) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER.

The Proxy forms should be lodged with the Company at its Registered Office at least 48 hours before the time of the meeting.

(c) Register of Members and Transfer Books of the Company shall remain closed from 9th July, 2010 to 15th July, 2010 (both days inclusive).

(d) Dividend for the year, as approved by the members, shall be payable to those shareholders whose names appear on the Register of Members on the record date, i.e. 9th July, 2010, fixed for this purpose. The dividend in respect of shares held in dematerialized mode will be payable to the beneficial owners as per the details furnished by the Depositories for this purpose.

3

(e) Members holding shares in dematerialized mode are requested to intimate all changes pertaining to their bank details, ECS, mandates, change of address/name etc. to their Depository participant only and not to the Company’s Registrars and Transfer Agents.

(f) Members holding Share certificates under different folio numbers but in the same order of names are requested to apply for consolidation of such folios and send relevant Share certificates to the Registrars and Transfer Agents of the Company.

By order of the Board of Directors

Ananth Prabhu Executive Director (Commercial)

& Secretary

Dated: 1st July, 2010.

Registered Office:Honda, Sattari, Goa – 403 530.

Explanatory Statement pursuant to Section 173 of the Companies Act, 1956

Item No. 6

By a circular resolution, the Board of Directors of the Company appointed Mr. Steven A. Pinto as an Additional Director on 28.06.2010. Under Section 260 of the Companies Act, 1956 read with Article 154 of the Articles of Association of the Company, he holds office till the forthcoming Annual General Meeting.

Notice has been received from a member as required under Section 257 of the Companies Act, 1956 proposing his candidature for appointment as a Director. Brief particulars of Mr. Pinto are given in the annexure.

Except Mr. Steven A Pinto who may be deemed to be concerned or interested in his own appointment, none of the other Directors are concerned or interested in the proposed resolution. Mr. Pinto is not related to any of the directors of the Company.

By order of the Board of Directors

Ananth Prabhu Executive Director (Commercial)

& Secretary

Dated: 1st July, 2010.

Honda, Sattari, Goa–403 530.



4

Brief resume of Directors seeking appointment/re-appointment at this Annual General MeetingParticulars Mr. P. M. Telang Mr. R. S. Thakur Mr. Steven A. PintoDate of Birth & Age

21st June, 1947 - 63 years 6th September, 1948 - 61 years 29th November, 1945 - 64 years

Appointed on 28th June, 2008 28th June, 2008 28th June, 2010Qualifications B.E. (Mechanical

Engineering), REC, Nagpur and MBA (IIM, Ahmedabad)

Bachelor’s degree in Mechanical Engineering. Masters degree in Business Management (XLRI). Chartered Management Accountant (CIMA, London)

Economic Honors Graduate (B.A.)Masters in Management Studies (MMS)

Expertise in Specific functional areas

Mr. P M Telang has been with Tata Motors Ltd. for over 40 Years having functional expertise in automotive industry and machinery manufacturing. He has led the team at Tata Motors for many prestigious offerings from the Tata Stable, including Tata’s mini-truck – Ace. He is responsible for product development, m a n u f a c t u r i n g , sales and marketing functions of the Strategic Business unit of Commercial Vehicles. He has anchored Tata Motors through its roughest patch and has been the architect of the company’s cost reduction drive. By championing the use of e-procurement and other innovative approaches, he has played a vital role in initiating a complete makeover in the company’s operations and leveraging domestic and international growth opportunities. He has led the team for many prestigious offerings under the Tata brand, including the mini-truck, Ace.

Mr. R. S. Thakur is presently Executive Director & Chief Executive Officer of Tata AutoComp Systems Ltd. (TACO). Prior to joining TACO in January, 2008, Mr. Thakur worked with Tata Motors Ltd for over 35 years and was responsible for finance, business planning, treasury, mergers and acquisitions, negotiations with state governments for new projects and manufacturing engineering. He was actively involved in the management of overseas ventures of Tata Motors as well as joint ventures in India.

Mr. Pinto commenced his career as a Management Trainee with Philips Gloeilampen Fabrieken Philips, the Dutch global conglomerate, at its Indian subsidiary. He made an unconventional move into Banking, joining Citibank India in 1985 as Vice President & Marketing Director for their nascent Consumer Banking initiative. He later did stints in Citibank Korea (Vice President - Chief of Staff and Marketing Director, 2 years), Citibank Oman (CEO, 4 years), and Citibank Singapore – CEEMEA Region (Regional Marketing Director, 2 years). In 1997 he assumed the position of CEO of Commercial Bank of Oman. In 2000, he was appointed CEO of Osool Finance Co. and concurrently Head of Retail Banking at Mashreq Bank, Dubai, UAE, post a profitable divestiture in Oman. He also did a brief stint as CEO, Abu Dhabi Commercial Bank, India prior to accepting the current position. He has attended multiple training programs covering Strategic Leadership, Corporate and Consumer Credit, Treasury, Retail Banking and Customer Service, and was Lead Trainer at Citibank Global Advanced Marketing Programs. He was on the Citibank Global Branding & Agency Recruitment Task Force as also the Global Service Excellence Task Force.

5

Particulars Mr. P. M. Telang Mr. R. S. Thakur Mr. Steven A. PintoMr. Telang is Presently Managing Director – India Operations. Before joining Tata Motors, Mr. Telang was with Larsen & Toubro Ltd, Mumbai for 3 Years and joined the House of Tatas through the prestigious Tata Administrative Service (TAS) cadre.

His significant achievements include the establishment of Retail Banking in India and Korea for Citibank, a business turnaround for Citibank Oman, the expansion of Citibank Credit Cards footprint across CEEMEA geography, the merger of 3 banks to form Combank Oman, and the country’s first ever global syndicated USD 100 million loan for Combank Oman and subsequent profitable divesture, and a business turnaround for Osool Finance and a significant expansion of Mashreq Bank’s Retail franchise. More recently, he has driven the creation of a best-in-class Finance and Insurance organization for Toyota/Honda/ Chrysler/ Dodge/Jeep brands in the UAE.

Directorships held in other public companies (excluding Foreign and private companies)

Tata Cummins LtdTelco Construction Equipment Company Ltd.Tal Manufacturing Solutions Ltd.Tata Marcopolo Motors Ltd.Tata Motors Ltd.Fiat India Automobiles Ltd.TML Distribution Company Ltd.Tata Advanced Systems Ltd.,

Tata AutoComp Systems LtdTata Marcopolo Motors LtdTAL Manufacturing Solutions LtdTata Johnson Controls Automotive Ltd.Automotive Stampings and Assemblies Ltd.Automotive Composite Systems (Intl.) Ltd.TACO Sasken Automotive Electronics Ltd.Tata Yazaki AutoComp Ltd.Tata AutoComp GY Batteries Ltd.

Redington India Limited

Memberships/ Chairpersonships of Committees across public companies

Member of R e m u n e r a t i o n Committee of A u t o m o b i l e Corporation of Goa Ltd

Member of Remuneration, Shareholder Grievance & Finance Committees of Automotive Stampings and Assemblies LtdMember of Audit and Remuneration Committee of Automotive Composite Systems (Intl.) LtdMember of Audit Committee of Tata Marcopolo Motors LtdMember of Audit Committee of TAL Manufacturing Solutions LtdMember of Remuneration Committee of Tata AutoComp GY Batteries Ltd.Member of Audit Committee of Automobile Corporation of Goa Ltd.

Chairman of Remuneration Committee – Redington India LimitedMember of Audit Committee – Redington India Limited

Shareholding Nil Nil Nil

None of the Directors is related to each other or other Directors of the Company.



6

DIRECTORS’ REPORTTo, The members of Automobile Corporation of Goa Ltd.

Your Directors present their 30th Annual Report and the audited statement of accounts for the year ended 31st March 2010.

Financial Results 2009/10 2008/09

Net Sales 23335.89 32424.79Total Expenditure 23724.33 30136.88Operating profit / (loss) (388.44) 2287.91Other Income 464.47 623.78Earnings before Interest, Tax, Depreciation and Amortization 76.03 2911.70Interest 25.11 28.62Cash Profit 50.92 2883.08Provision for Depreciation & Amortization 422.64 342.51Profit / (loss) before prior period income, exceptional item and Tax (371.72) 2540.57Prior period Income - -Exceptional Item - 275.97Provision for Tax (net) (157.57) 880.46Excess provision for tax in respect of earlier years written back (net) - 9.20Balance in Profit & Loss A/c brought forward from the previous year 3830.95 2850.97Profit available for appropriation 3616.80 4796.25Appropriations:Equity Dividend 64.22 642.16Corporate Dividend tax 10.91 109.14Transfer to General Reserve - 214.00Balance carried to Balance Sheet 3541. 67 3830.95

Rs. In Lakhs

Dividend

Your Directors have recommended payment of Re. 1/- per share as dividend on the equity shares of the Company for the year (previous year Rs. 10/- per share) out of the carried forward profits of previous years.

Operations

Operations at both the business segments of the Company suffered during the year under review due to a combination of factors. Overall sales volume and turnover were lower and there was a sharp decline in value addition.

Labour unrest which began by end of February, 2010 seriously affected sales during the peak month of March, 2010.

The gross revenue for the year under review was Rs. 238.00 Crores (Rs.330.49 Crores in the previous year). The loss before taxes was Rs.3.71 Crores (Rs. 28.16 Crores profit in the previous year) and loss after taxes was Rs.2.14 Crores (Rs. 19.42 Crores profit in the previous year)

Pressings Business Segment

After the steep fall in volumes during the last quarter of 2008/09, the demand grew cautiously during the early part of the year peaking during the last quarter of 2009/10. Realisations however, were much lower resulting in erosion in value addition considerably.

The unfortunate labour unrest over the demand for settlement of wages which started from around 27th February and lasted right till end March, 2010 at the Goa factories seriously crippled operations and resulted in the principal buyer withdrawing almost all the tooling to ensure uninterrupted production of vehicles. This has dealt a serious blow to the business segment. In the event, the pressings business from Goa factories has almost ground to a trickle – mainly catering to the requirement of engine components of Tata Cummins Ltd.

7

Bus Body Business Segment

2,373 buses were sold during the year as against 4,509 buses during the previous year. As informed in the last report, the main Bus Body building plant at Goa, which was closed in January 2009 due to lack of demand was re-opened only in June, 2009 albeit, with a far lower capacity utilization due to low demand. But for the timely orders from Tata Motors for domestic buses, the year under review would have been far worse.

The demand for export buses picked up gradually from December 2009 and peaked during the last quarter but the company could not take advantage of this demand pick up due to the unfortunate labour unrest over settlement of wages. Since restoration of normalcy in April, 2010, the demand for buses has been rising. The Directors believe that the set-back suffered in the year gone by were temporary and the Company looks forward to regain lost ground in the coming years.

The Hi Deck bus on the Hispano platform has been undergoing major improvements with higher horsepower engine and other modifications. The proto type buses are currently on trial runs and it is hoped that regular production will commence during the second half of the current year.

HRD and Industrial Relations

Settlement of wages with labour unions effective 1st April, 2009 resulted in protracted negotiations eventually leading to a labour unrest beginning February 27th 2010. Production at the Goa factories was severely affected during the last month of the year leading to loss of sales. It is a matter of deep regret that despite all the efforts to revive the Company from its desperate position in 2001/02 to its current position, the workers’ unions resorted to such uncalled for actions which ultimately harms the workers more than anyone else among all the stakeholders. In the event, firm steps taken by the Company and the help and support received from the promoters and the Govt. resulted in a settlement for three years effective from 1st April, 2009.

Training and other HRD initiatives continued during the year. Despite the incidents at the end of the year, relations with the workers unions were cordial and continue to be so.

Corporate Social Responsibility

Notwithstanding the financial setback suffered, the Company continued with its CSR initiatives during the year under review. Assistance to local students in the form of scholarships and uniforms, emergency ambulance service to the local community, help and assistance in the Polio vaccination drive, Blood donation drive etc., were continued during the year. The Company also contributed to the Eye Camp organized by a local NGO for the benefit of the local communities.

The Company also participated in sports and cultural activities conducted by various local social organizations.

Corporate Governance

A separate section on Corporate Governance forming part of the Directors’ Report and the certificate from the Company’s auditors confirming compliance of Corporate Governance norms as stipulated in the revised clause 49 of the Listing Agreement with the Stock Exchange is included in the Annual Report.

Finance

As the members are aware, Rs. 703,908,675/- were raised through a Rights issue of shares in 2007-08 out of which a sum of Rs. 92,08,436/- was incurred towards the expenditure for the issue.

Out of the unspent amount of the Rights issue proceeds a sum of Rs. 311,326,387 has been spent as at the end of the year under review and the balance amount is being held as current investment in units of Mutual Funds and Inter Corporate Deposits as on 31st March, 2010, in line with the resolution passed by the members at the last AGM held on 8.8.2009.

Directors

In line with the retirement policy for Directors adopted by the Board, Mr. D N Naik relinquished office on 8th August, 2009. Mr. Naik was one of the first directors and played an active role in the formative years of the Company. Through-out his long association of 29 years, Mr. Naik made significant contributions for the growth and development and guided the Company effectively during the turbulent years of 2000/01. The Board has placed on record the valuable contributions made by Mr. Naik during his tenure as Director of the Company.



8

Mr. N R Menon completes his term as the Managing Director of the Company on 31st July 2010. Over the last six years, Mr. Menon has lead the Company admirably and has been instrumental in the all round development of the Company. The Directors place on record their sincere appreciation of the contribution made by Mr. Menon during his tenure as the Managing Director of the Company.

Mr. Steven A. Pinto, an accomplished banker and finance professional was appointed as an Additional Director by the Board on 28th June, 2010 and holds office till the forthcoming Annual General Meeting of the members of the Company. Notice under Section 257 of the Companies Act, 1956 has been received from a member signifying his intention to propose Mr. Pinto’s appointment as a Director. The Board considers the appointment of Mr. Pinto to be in the interest of the Company.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr. P M Telang and Mr. R S Thakur retire by rotation and are eligible for re-appointment.

Particulars of employees

Information required under Section 217 (2A) of the Companies Act 1956, is annexed to this report.

Energy conservation, Technology absorption and Foreign Exchange earnings/ outgoings

Information required under Section 217 (1) (e) of the Companies Act 1956 read with Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 and forming part of the Directors’ Report is given as an annexure to this report.

Audit

Messrs Deloitte Haskins & Sells (DHS), who are the Statutory Auditors of the Company, hold office until the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for the financial year 2010-11. The auditors have, under Section 224(1) of the Companies Act, 1956, furnished a certificate of their eligibility for re-appointment.

Directors’ Responsibility Statement

The Company complies with accounting and financial reporting requirements in respect of the financial statements for the year under review. Pursuant to Section 217 (2AA) of the Companies Act 1956 in respect of the annual accounts for the year under review, based on the representations received from the operating management, the Directors confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis.

Acknowledgements

The Directors place on record their sincere thanks for the help and support received from the Govt. of Goa and the Govt. and semi-Govt. agencies. The Directors also place on record the excellent co-operation received from the promoters, customers, vendors and the employees of the Company.

On behalf of the Board of Directors

S V Salgaocar Chairman

Place : Vasco-da-Gama, Goa.Date : 1st July, 2010

9

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10

ANNEXURE TO DIRECTORS’ REPORTInformation required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988.

A. Conservation of Energy

Conversion of thermic fluid to LPG gas for Oven and Water Dry off tank with sliding motorized door commissioned during the year in the main bus body building - Plant II

Installation of LOT (Liquid Off Take) for LPG supply for Primer and Finish paint shops at Plant II with 30 X 2 manifold size and 150 Kg. vaporizer have resulted in savings of approximately;

Rs. 800/- per bus at Primer Paint shop

Rs. 700/- per bus at Finish Paint shop

Besides this, the set up is environment friendly with high calorific value, zero carbon soot formation and low maintenance cost.

B. Absorption of Technology, Research and Development (R & D)

1. SpecificAreasinwhichR&DcarriedoutbytheCompany

i. Design and Development of buses catering to the requirement of JnNURM specification of 900mm floor height with city bus features.

ii. Mass Production ionizing of complete aluminium structure bus bodies, thereby providing customers specially STU’s option of fully corrosion free and light weight bus structure.

iii. Design and Development of new LCV model bus “COMFY” catering to requirement of new bus facia in LCV segment and wider bus width was achieved through this development.

iv. Design and Development of special purpose vehicles for the Police Force namely Commando Van and Dog Squad Van.

v. New Model “AERO” for catering to LCV bus in the Luxury segment.

vi. Reduced width “COMFORT” bus specially catering to Sri-Lanka regulations designed and developed.

2. BenefitsDerivedfromR&DandFutureplanofaction

All new models developed were to widen the scope of Company’s product range so that Company can cater to varied market demands.

3. Expenditure on Research and Development

a) Capital Rs.11,97,770.00 b) Recurring Rs.38,85,036.00 c) Total Rs.50,82,806.00 d) Total as a percentage of turnover 0.21%

C. Foreign Exchange earnings and outgo

The Company earned Rs. 50,69,97,266 by export of Buses and parts through a merchant exporter. The particulars of foreign exchange earned/utilized during the year are given in Schedule 14 to the Accounts.

On behalf of the Board of Directors

S V SalgaocarChairman

Place: Vasco-da-Gama, GoaDate : 1st July, 2010.

11

Pressing Sales ( Rs. in Lakhs)

9002.89

6648.58

07 - 08 08 - 09 09 - 10

6627.21

Gross Sales

MANAGEMENT DISCUSSION AND ANALYSIS1. Industry structure, developments and outlook

The Company has two business segments – Pressed parts and Assemblies for automobiles and Bus body building – both of which are a part of the Commercial vehicle sector of the Automobile industry.

The Automobile Industry was one of the worst hit during the global financial meltdown in 2008/09. Prompt intervention by the Govt. by a series of steps such as reduction in excise duty etc., and release of funds for the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) scheme to upgrade public transportation system in the country provided the necessary fillip to the commercial vehicle industry to stage a smart recovery in 2009/10 by growing at over 35%. Almost all categories of automobiles witnessed strong growth in the domestic market in 2009/10.

The story, however, was not as rosy in the export markets for buses which witnessed a contraction of 32% compared to 2008/09. Traditional bus markets of the Company in the Middle East and Africa postponed their purchases resulting in a serious decline in demand for buses from overseas customers.

Sheet Metal Components

The demand for sheet metal components was flat during the year vis-à-vis the previous year at Rs. 66.27 Crores. The demand grew slowly from low levels in the beginning of the year and peaked during the last quarter when the unfortunate labour unrest which started around 27th February and lasted till end March, 2010 resulted in the major buyer recalling their tooling to avoid loss of production of vehicles.

The loss of tooling has been a serious set-back to the business segment. Efforts are being made to get back the tooling and to restore the business.

Bus Body Segment

2373 buses were sold during the year as against 4509 buses during the previous year. Of these, only 944 buses were for the export markets as against 3204 in the previous year. The decline in demand from the export markets beginning January, 2009 continued during the financial year under review right up to the last quarter of the year. The Domestic demand of 1429 buses (1305 buses in the previous year) came to the rescue. Accustomed to making standard buses for export markets as the Company was, it was a challenge to mass manufacture the JnNURM buses which were altogether on a new platform with many unique features.

The demand for Hi-Deck buses on the Hispano design was muted during the year pending major up-gradation of chassis aggregates. Proto types of Buses with 285 H P. engines have newly been developed and are undergoing tests by the vehicle manufacturer.

Bus Sales Year wise

476

3311

1305

07 - 08 08 - 09 09 - 10

1429

944

3204

Export Domestic



12

The Company was successful in getting bulk orders from State and City Transport Undertakings for buses. The Company aims to increase the volumes in these segments in the coming years.

Labour unrest which started around 27th February and lasted till end March 2010 resulted in a loss of nearly 500 buses which seriously impacted the performance for the year. It is heartening to report that the export markets are showing robust signs of revival in the current year and the Company is hopeful of achieving decent volumes for the year 2010/11 even though, the aim of reaching the 10,000 buses per annum appears to be somewhat distant. The Company has initiated steps to be cost competitive in the coming years.

Export Domestic

Apr-09

22

100

28

111

753

10

109

2955

10

167

37

197

77

219

127

217

266

99

323

102

8

May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10

Bus Sales (Monthwise)

During the year, the Company commenced supplies of Passenger and Drivers’ doors to Tata Marcopolo Motors Ltd.

2. Opportunities and threats Opportunities: KPMG’s Global Auto Executive Survey 2010 indicates that India will have the seventh largest auto industry

and will be the fifth largest manufacturer of commercial vehicles by 2016. The major growth drivers of the Indian Automobile market are:-

• Rising industrial and agricultural output • Rising per capita income • Easy finance schemes • Robust production • Rising working population and middle class urbanization • Availability of variety of vehicle models meeting diverse needs and preferences • Road development

After a sluggish start, the development of highways appears to have gathered the momentum which augurs well for the road transport sector. The vast hinterlands of the country are yet to be connected by a good road network and this task now appears to have been taken in earnest as evidenced by the large number of contracts awarded during the year. This will further open up the market for road transport sector rising demand for both passenger and goods vehicles.

The revival of the export market also provides fresh opportunities for growth in the current year.

Threats:

Looming inflation and sharp raises in input costs threaten the highly competitive bus body building sector with ever increasing pressure on margins. Rising cost of living has had the effect of increasing the manpower costs significantly. Non-availability of skilled manpower has also been a problem being faced by the industry across sectors, particularly in labour intensive industries such as the Bus Body building industry.

13

The global financial meltdown of 2008 does not appear to have blown out altogether, particularly in Europe, which once again threatens to jeopardize the developed economies in the coming months. In an interrelated global market, any such disruption has the potential to unsettle the domestic economy and consequently, the industrial sector.

3. Risks and concerns.

Appreciation of the Rupee vis-à-vis the US Dollar poses a serious risk as had happened in 2007/08.

In addition to the conventional bus body builders ramping up volumes, more and more organised players have started entering the Indian bus body building sphere – many in association with world renowned automobile manufacturers. While newer concepts and up-gradation of technology are welcome, overseas manufacturers with established brand names and deep pockets are sure to wean away the skilled human resource trained and developed by smaller players such as ours.

4. Internal Control Systems

In line with the plans, the Company introduced SAP ECC 6.0 ERP package across all the factories and offices effective 1st October, 2009. Not-withstanding initial hiccups, the system has ushered in a new era of integrated data system which will lead to a significant improvement in internal control and compliance issues.

5. Financial and operational performancePercentage of Sales

Year ended March, 31st

2010 2009Sales net of excise duty 100 100Expenditure:Material (including change in stock) and other variable cost 85.75 83.37Employee costs 9.62 6.31Manufacturing & other expenses 4.89 3.26Total expenditure 101.66 92.94Profit before Depreciation, exceptional items and Tax -1.66 7.06Depreciation 1.81 1.06Interest 0.11 0.09Profit before exceptional items and Tax -3.58 5.91



14

6. Material developments in Human Resources and Industrial Relations

There were 694 employees on the rolls of the Company as at 31st March, 2010 as against 747 employees at the beginning of the year with the average age of the employees being 38 years. In view of the sharp fluctuation in demand, particularly in the Bus Body business segment, a considerable part of work is outsourced to contain fixed labour costs.

Training needs of employees in their areas of operation are identified and training sessions are either held in-house or the employees are deputed to training courses to hone their skills on a regular basis.

The Company has a compensation process involving both fixed and performance based variable compensation procedure with the senior employees performance having a higher linkage with company performance.

Settlement of wages with labour unions effective 1st April, 2009 resulted in protracted negotiations eventually leading to a labour unrest which started around 27th February and lasted till end March, 2010. Production at the Goa factories was severely impacted during the last month of the year leading to loss of sales and goodwill.

After providing a fair opportunity to the unions, the management decided to take firm action which galvanized the unions to call off the unrest. The settlement was signed by the end of the year and normalcy was quickly restored.

Cautionary Statement

Statements in this Management Discussion and Analysis that describe the Company’s objectives, expectations and predictions may be ‘forward–looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, demand and pricing by the Company’s major customers, changes in the Government regulations, tax regimes, economic development and other incidental factors.

OPERATING PROFITS (Rs. in Lakhs)

OPERATING PROFIT % AGE

7.06%

-1.66%

07-08 08-09 09-10

2577 2287

(388)

7.78%

EARNING PER SHARE (Rs. in Lakhs)

EPS PE RATIO

30.29

(75.38)07-08 08-09 09-10

32.49

4.42

-3.32

6.93

TURNOVER (Rs. In Lakhs)

33749 33049

23800

07-08 08-09 09-10

PROFIT BEFORE TAX (Rs. in Lakhs)

2911.842816.54

07-08 08-09 09-10

8.63%

8.52%

-1.56%(371.72)

Profit After Tax Tax PBT % tage to Sales

15

CORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE PHILOSOPHY

The Company was promoted in the joint sector and since inception in 1980, followed a philosophy of professional management with strict adherence to the letter and spirit of rules and regulations applicable to the corporate sector. The Company has institutionalized transparency, accountability and integrity in its functioning.

BOARD OF DIRECTORS

Composition

The Board of Directors comprises of eminent industrialists and professionals with diverse mix of qualification and experience. There are seven Directors on the Board at present of which three are Independent Directors. The composition of the Board is in conformity with the requirements of clause 49 of the Listing Agreement with the Stock Exchange.

Board meetings

During the year under review, five board meetings were held on 18.04.2009, 17.07.2009, 08.08.2009, 23.10.2009 and 28.01.2010. The meeting dates are fixed in consultation with all the directors.

At least seven days’ prior notice of meetings is given to all the Directors along with detailed agenda notes and where applicable, draft resolutions to be passed at such meetings.

The attendance at the board meetings held during the year and at the last Annual General Meeting and the details of directorships in public companies are given below: -

Name of the Director CategoryAttendance during thefinancialyear

2009-10

No. of Directorships(Including the Company)*

Share-holdingBoard

MeetingAGM

Mr. S. V. Salgaocar Non-ExecutiveIndependent Director Chairman

4 Yes 3 Nil

Mr. D. N. Naik (upto 08 August 2009)

Non-Executive IndependentDirector

3 Yes N.A. N.A.

Mr. P F X D’Lima Non-ExecutiveIndependent Director

5 Yes 1 780

Mr. P M Telang Non-Executive Director

5 Yes 9 Nil

Mr. R S Thakur Non-Executive Director

4 Yes 10 Nil

Mr. S M Kuvelker Non-ExecutiveIndependentDirector

5 Yes 9 Nil

Mr. N R Menon Whole-timeDirector

5 Yes 1 Nil

Mr. Ananth Prabhu Whole-timeDirector

5 Yes 1 Nil

*Excludes Directorships in foreign companies.

None of the Directors of the Company is a member of more than ten committees and chairman of more than five committees across all the companies in which he is a director. All the Directors have made necessary disclosures regarding committee positions held by them in other companies. Also, none of the Directors is related to each other and holds the office of director in more than 15 public companies.



16

Mr. P M Telang and Mr. R S Thakur are liable to retire by rotation and are eligible for re-appointment.

Information as required under clause 49 of the Listing Agreement is annexed to the Notice of the Annual General Meeting.

Code of Conduct

The Company’s Code of Conduct applicable to all the Board members, senior management and employees is available on the Company’s website. All the Board members and senior management of the Company have affirmed compliance with the code for the financial year ended 31st March, 2010. Declaration to this effect signed by the Managing Director (CEO) is annexed hereto.

BOARD COMMITTEES

Audit Committee

Mr. D N Naik relinquished office on 8.8.2009 and consequently ceased to be a member of the Committee. The present Composition of the Audit Committee is as follows:

Mr. S M Kuvelker Independent Director Chairman

Mr. R S Thakur Director Member

Mr. P F X D’Lima Independent Director Member

All members of the Audit Committee have relevant finance expertise

The Executive Director (Commercial) & Secretary acts as the Secretary to the Committee.

Four Audit Committee meetings were held on 18.04.2009, 17.07.2009, 23.10.2009 and 28.01.2010 during the year under review.

The attendance at the Audit Committee meetings held during the year is as under: -Composition of AuditCommittee

Mr. S M Kuvelker (Chairman)Non–Executive Independent Director

Mr. D N NaikNon-Executive Independent Director ( up-to 8th August, 2009

Mr. R S Thakur Non-Executive Director

Mr. P F X D’LimaNon-Executive Independent Director

Number of meetings attended 4 2 3 4

The Chairman of the Audit Committee was present at the last Annual General Meeting.

Powers of the Audit Committee: -

• To investigate any activity within its terms of reference.

• To seek information from any employee

• To obtain outside legal or other professional advice

• To secure attendance of outsiders with relevant expertise, if it considers necessary.

Role of the Audit Committee: -

• Oversight of the Company’s financial reporting process and disclosure of its financial information to ensure that financial statements are correct, sufficient and credible.

• Recommending to the Board the appointment, re-appointment and if required, replacement or removal of the statutory auditors and the fixation of audit fees.

• Approval of payment to statutory auditors for any other services rendered by them.

• Reviewing with the management the annual financial statements before submission to the board for approval, with particular reference to:

- Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956

17

- Changes, if any, in accounting policies and practices and reasons for the same

- Major accounting entries involving estimates based on the exercise of judgment by management

- Significant adjustments made in the financial statements arising out of audit findings

- Compliance with listing and other legal requirements relating to financial statements

- Disclosure of any related party transactions

- Qualifications in the draft audit report.

• Reviewing, with the management, the quarterly financial statements before submission to the Board for approval

• Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

• Reviewing, with the management, performance of statutory and internal auditors and adequacy of internal control systems.

• Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit.

• Discussion with the internal auditors of any significant findings and follow up there on.

• Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

• To look into the reasons for substantial defaults in payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

• To review functioning of the Whistle Blower mechanism.

• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

Remuneration CommitteeThe terms of reference of the Remuneration Committee are consideration of matters relating to the Company’s policy on remuneration to the Whole-time Directors.

The composition of the Remuneration Committee is as under:

Mr. S V Salgaocar, Independent Director Chairman

Mr. P M Telang, Director Member

Mr. P F X D’Lima, Independent Director Member

Mr. D N Naik, Independent Director Member (Up-to 08.08.2009)

No Remuneration Committee meeting was held during the year under review.

Remuneration PolicyThe remuneration of whole-time directors is decided by the Remuneration Committee based on criteria such as the Company’s performance and the performance/track record of the whole-time directors. The Company pays remuneration by way of salary, perquisites/ allowances, and incentive remuneration to its whole time directors. The Annual increments are decided by the Remuneration Committee within the salary scales approved by the members.



18

The sitting fee payable to Non-executive Directors for attending Board and Audit Committee meetings is Rs. 10,000/- per meeting and Rs. 5,000/- for other Committee meetings

Remuneration to Directors

Non-Executive Directors (Rupees)

Commission for 2009-10 Sitting fees for 2009-10S V SalgaocarD N NaikP F X D’LimaP M TelangR S ThakurS M Kuvelker

NilNilNilNilNilNil

40,00050,000

1,00,00050,00070,00090,000

Whole-time Directors (Rupees)

Salary Perquisites & Allowances

Commission Incentive Remuneration

N R Menon Managing DirectorAnanth Prabhu Executive Director

13,23,866

12,97,368

3,54,170

6,82,848

Nil

Nil

24,70,677

8,78,797

The incentive remuneration payable to the Whole-time Directors was reviewed by the Remuneration Committee of the Board on 28th May, 2010 and was fixed as follows:-

Managing Director Rs.12,45,512

Executive Director Rs. 5,66,650

The Committee also granted an increment of 4% of the basic salary to the Executive Director for the year in line with the industry.

Remuneration payable to the Executive Director for the year 2009-10 is in excess of the limits specified in Schedule XIII of the Companies Act, 1956. Excess remuneration will be paid upon receipt of Central Government approval

Salient terms of appointment of the Whole-time Directors as approved by members:N R Menon A. Prabhu

Salary Scale Rs. 90,000 – Rs. 1,50,000 Rs. 50,000 – Rs. 1,25,000Incentive Remuneration As awarded by the Board As awarded by the BoardCommission At the discretion of the board

subject to limits specified under the Companies Act, 1956

At the discretion of the board subject to limits specified under the Companies Act, 1956

Perquisite & Allowances At the discretion of the board subject to limits specified under the Companies Act, 1956

At the discretion of the board subject to limits specified under the Companies Act, 1956

Minimum Remuneration in case of inadequacy of profits during any financial year

Salary, incentives and perquisites as above subject to Schedule XIII of the Companies Act, 1956

Salary, incentives and perquisites as above subject to Schedule XIII of the Companies Act, 1956

Notice Period on either side 3 months 3 monthsSeverance fees payable by the Company for terminating employment

3 months salary 3 months salary

19

Retirement Policy for DirectorsExecutive Directors – Up-to 65 years Non-Executive Directors – Up-to 75 years Investors’ Grievance CommitteeThe Investors’ Grievance Committee oversees redressal of investors’ complaints pertaining to share transfers and related issues. Two Investors’ Grievance Committee meetings were held on 23.10.2009 and 29.03.2010 during the year under review.The Composition of the Investor Grievance Committee is as underMr. D N Naik Chairman (Up-to 08-08-2009)Mr. P F X D’Lima Chairman (From 23-10-2009)Mr. N R Menon Member The Executive Director (Commercial) & Secretary acts as the Secretary to the Committee.Attendance at Investors’ Grievance Committee meetings held during the year is as under: -

P F X D’Lima (Chairman) Non-Executive Independent Director

N R Menon Managing Director

Number of meetings attended 2 2

Mr. Ananth Prabhu, Executive Director (Commercial) & Secretary, who is also the Compliance Officer may be contacted at:

Automobile Corporation of Goa Ltd., Bhuimpal, Sattari, Goa – 403 530. Tel (0832) 6731214 E-mail: [email protected]

16 complaints were received during the year under review and all were resolved during the year. No complaints were pending as on March 31, 2010.

GENERAL BODY MEETINGS

Location and time of the general meetings held in the last 3 years.Year Type Date Venue Time

2008-2009 AGM 8th August, 2009 Honda, Sattari, Goa 12.00 noon2007-2008 AGM 28th June, 2008 Honda, Sattari, Goa 10.30 a.m.2006-2007 AGM 29th June, 2007 Honda, Sattari, Goa 10.30 a.m.

All resolutions moved at the last Annual general meeting were passed by a show of hands by requisite majority of members attending the meeting. Three special resolutions were passed during the last three AGM’S held. No resolutions were moved through postal ballot.

Details of Special resolutions passed during the last three AGM’s is as underYear Date of AGM Particulars of special resolution2008-09 8th August, 2009 1. Approval to the Board of Directors to spend the balance

unspent amount raised through issue of equity shares on rights basis in 2007 for purposes other than those mentioned in the letter of offer dated 28.02.2007

2. Alteration of Articles of Association of the Company by insertion of new Article 135A for allowing company to hold Board or Committee meetings through the means of video or tele-conferencing

2007-08 28th June, 2008 1. Payment of remuneration by way of commission on the net profits of the Company to Non-Whole time directors as required under Section 309(7) of the Companies Act, 1956

2006-07 29th June, 2007 Nil



20

DISCLOSURESDuring the year under review, besides the transactions mentioned elsewhere in the Annual Report, there were no other related party transactions by the Company.No penalties have been imposed or strictures passed on the Company during the last three years.In accordance with Clause 49 (V) of the Listing Agreement, the Managing Director and the Executive Director have issued necessary certificate in respect of the financial statements for the year ended March 31, 2010.RISK MANAGEMENTThe Board has laid down a clear Risk Policy to identify potential business risks and install effective mitigation processes to protect the Company’s assets and business risks.The Risk Assessment and minimization plans are reviewed by the Board periodically.PROCEEDS FROM PUBLIC ISSUES, RIGHTS ISSUES, PREFERENTIAL ISSUES ETCIn the financial year 2006/07, the company issued 1,481,913 equity shares of Rs. 10 each on Rights basis at a premium of Rs.465/- per share aggregating to Rs. 703,908,675/- The objects of the issue were to substantially increase capacity ,upgrade and modernise the Bus Body building facilities and shift the existing presses from the main Sheet Metal Pressing unit (at Honda,Goa) to a location in or around Pune. The Rights issue closed for subscription on 20th April,2007 and shares were allotted on 19th May,2007.The management had then decided to shift the pressing unit to Dharwar (Karnataka) instead of Pune. Further, at the AGM held on 8th August, 2009, the members have approved utilisation of the unspent amount as on the date of AGM for other purposes such as funding incremental working capital needs, new business opportunities, in-organic growth and to invest in group companies. As at 31st March, 2010, a sum of Rs.311,326,387 has been spent on Capital expenditure. Out of the balance amount Rs.253,373,852 is being held as current investments in units of Mutual Funds and Rs.130,00,000 in Inter Corporate Deposits. MEANS OF COMMUNICATIONThe Quarterly/Half yearly/Annual results are regularly submitted to the Stock Exchange in accordance with the Listing Agreement and are published in newspapers and posted on the Company’s website. The Company also regularly posts the information as specified under Clause 41 of the Listing Agreement on the Electronic Data Information Filing and Retrieval System launched by SEBI. Filing of information specified under Clause 41 will now be done under Corporate Filing and Dissemination System (CFDS) as intimated by BSE vide its circular dated 19.04.2010. Quarterly / Half-yearly results Published in Tarun Bharat (Marathi version) Local newspaper

and in Financial Express- National newspaperAny website, where displayed www.acglgoa.comWhether Management Discussion & Analysis is part of annual report

Yes

GENERAL SHAREHOLDER INFORMATIONAnnual general meeting• Date and Time: 7th August, 2010 at 12.30 pm• Venue: Registered office at Honda, Sattari, Goa-403 530.• Dividend Payment date On or after 12th August, 2010 Date of Book Closure: 9th July, 2010 to 15th July, 2010Financial calendar: Financial reporting for the quarter ending: June 30, 2010 - by 15th August, 2010 September 30, 2010 - by 15th November, 2010 December 31, 2010 - by 15th February, 2011 March 31, 2011 - End May 2011 along with audited Annual AccountsListing: The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited, Mumbai.Stock Code: 505036The Company has paid the Listing fee for the financial year 2009-10.ISIN No.: INE 451C01013CIN : L35911GA1980PLC000400

21

Market information: Market price data – monthly high/low during the financial year on the BSE vis-à-vis Sensex of the Company’s Equity Shares is given hereunder: -

Company’s share price SensexHigh (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

April, 2009May, 2009June, 2009July, 2009August, 2009September, 2009October, 2009November, 2009December, 2009January, 2010February, 2010March, 2010

167.95192.05267.50249.00222.00263.00243.85240.00270.40284.50270.00251.00

129.10150.00169.00194.00188.30202.05182.00170.00212.00208.50218.05216.70

11,492.1014,930.5415,600.3015,732.8116,002.4617,142.5217,493.1717,290.4817,530.9417,790.3316,669.2517,793.01

9,546.2911,621.301,4016.9513,219.9914,684.4515,356.7215,805.2015,330.5616,577.7815,982.0815,651.9916,438.45

THE PERFORMANCE OF THE COMPANY SCRIP

CO

MPA

NY’

S SC

RIP

PERF

ORM

AN

CE

20000

18000

16000

14000

12000

10000

BSE

SEN

SEX

400

350

300

250

200

150

100

50

Apr-09May-09

Jun-09Aug-09

Jul-09Sep-09

Oct-09Nov-09

Dec-09Jan-10

Feb-10Mar-10

MONTHS & YEARBSE SENSEX COMPANY’S SCRIP PERFORMANCE

Registrars and Share Transfer agents: Members are requested to correspond with the Company’s Registrars & Transfer Agents – M/s. TSR Darashaw Ltd quoting their Folio no., DPID & Client ID at the following address: -

TSR DARASHAW LIMITED 6-10, Haji Moosa Patrawala Ind. Estate 20, Dr. E. Moses Road, Mahalaxmi, Mumbai - 400 011

Tel: 022- 66568484 Fax: 022- 66568496, 022-66568494E-mail – [email protected] Website: www.tsrdarashaw.com



22

Share Transfer System:• Shares lodged for transfer at the Registrar’s address are normally processed within 30 days from the date

of lodgment, if the documents are complete and clear in all respects. All requests for dematerialization of shares are processed and confirmation given to the depositories within 15 days. Grievances received from members and other miscellaneous correspondence on change of addresses, mandates etc., is processed by the Registrars within 30 days. The Company extends the facility of simultaneous transfer and dematerialisation of shares to the shareholders.

• Pursuant to Clause 47 (C) of the Listing Agreement with Bombay Stock Exchange Limited, Certificates, on half yearly basis, have been issued by a practicing Company Secretary for due compliance of share transfer formalities by the Company.

• Pursuant to SEBI (Depositories and Participants) Regulations, 1996, certificates have also been received from a practicing Company Secretary for timely dematerialisation of shares of the Company and for conducting a secretarial audit on a quarterly basis for reconciliation of the share capital of the Company

Distribution of shareholding: As on 31st March, 2010

Sr.No No. of Shares Holding Amount (Rs.) % to Capital No. of Holders% to Total

Holders1 1 to 500 10,19,506 1,01,95,060 15.88 12,405 96.832 501 to 1000 1,44,731 14,47,310 2.25 189 1.473 1001 to 5000 3,48,639 34,86,390 5.43 160 1.254 5001 to 10000 1,42,996 14,29,960 2.23 19 0.155 10001 and Above 47,65,750 4,76,57,500 74.21 38 0.30

Total 64,21,622 6,42,16,220 100.00 12,811 100.00

Shareholding pattern: Category As on March

31, 2010No. of shares

As on March 31, 2010

%


No. of shares


%Promoters:EDC Ltd.Tata Motors Ltd

4,05,30227,20,629

6.3142.37

4,05,30227,20,629

6.3142.37

Mutual Funds /UTI 2,804 0.04 2,804 0.04Banks, Financial Institutions, Insurance Cos. 150 0.00 150 0.00NRIs 48,741 0.76 12,432 0.19Foreign Institutional Investors 1,400 0.02 2,66,894 4.16Others 32,42,596 50.50 30,13,411 46.93Total 64,21,622 100.00 64,21,622 100.00

Top Shareholders (holding in excess of 1%) as on 31st March, 2010

Sr. No. Name of the shareholder Number of Shares

% to Paid- Up Capital

1 Tata Motors Limited 27,20,629 42.372 EDC Limited 4,05,302 6.31

3 Narendra Kumar Agarwal 2,31,698 3.614 Arun Nahar 2,15,500 3.365 Diana Dhun Ratnagar 80,000 1.25

6 Manish Prataprai Gandhi 75,481 1.18

7 Jagrut Prataprai Gandhi 73,683 1.15

23

Dematerialization of Shares

Electronic holding by members comprises of 92.95% (Previous year 92.70%) of the paid up Share Capital of the Company held through National Securities Depository Limited 85.29% and Central Depository Services (India) Limited 7.66% as on March 31, 2010.

Action required regarding non-receipt of dividends

i) In case of non – receipt /non- encashment of dividend warrants, Members are requested to correspond with the Company’s Registrars/ Registrar of Companies, as mentioned hereunder:

Dividend for Contact office Action to be taken2004-05 to 2008-09 TSR Darashaw Limited Letter on plain paper1999-00 to 2003-04 Not applicable due to non

declaration of dividend-

1996-97 to 1998-99 -(Balance remaining in the un-paid dividend accounts of respective years has been transferred to IEPF)

-(Balance remaining in the un-paid dividend accounts of respective years has been transferred to IEPF)

1985-86 to 1995-96 The Registrar of CompaniesCompany Law OfficePlot No.21, EDC Complex,Patto Plaza, Panaji, Goa.

Claim in Form No.II of the Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government Rules, 1978)

ii) As per the provisions of Section 205 A read with Section 205 C of the Companies Act, 1956, the Company is required to transfer dividends remaining unpaid and unclaimed for a period of 7 years from the due date to Investor Education and Protection Fund (IEPF) set-up by the Central Government

iii) Given below are the indicative due dates for transfer of unclaimed and unpaid dividends to IEPF by the Company

Financial Year Dividend/Payment Date Proposed date for transfer to IEPF *2004-05 05th August, 2005 4th September, 20122005-06 05th October, 2006 4th November, 20132006-07 5th July, 2007 4th August, 20142007-08 5th July, 2008 4th August, 20152008-09 13th August, 2009 12th September, 2016

* Indicative dates; actual may vary

Plant locations:Plant Location Range of Products Plant IHonda, Sattari, Goa – 403 530

Pressed sheet metal parts/components/Sub assemblies and assemblies there from for various aggregates of automobilesBus Bodies and component parts thereof.

Plant IIBhuimpal, Sattari, Goa – 403 530 Bus Bodies and component parts thereofPlant IIIBhuimpal Pressing UnitBhuimpal, Sattari, Goa – 403 530

Pressed sheet metal parts/components/Sub assemblies and assemblies there from for various aggregates of automobiles

Plant IVJejuri Pressing UnitPlot No.F-2, MIDC, Jejuri, Taluka Purandar, Dist. Pune.

Pressed sheet metal parts/components/Sub assemblies and assemblies there from for various aggregates of automobiles



24

Address for correspondence:Automobile Corporation of Goa Ltd., Honda, Sattari, Goa – 403 530.Tel.: (0832) 6731223,6731227, 6731221Email: [email protected] Other facilities of interest to Shareholders holding shares in physical formNomination facility : Shareholders who hold shares in single name and wish to make/change the nomination in respect of their shares as permitted under Section 109A of the Act, may submit to the Registrars the prescribed Form 2B.Bank details : Shareholders are requested to notify/send the following to the Company’s Registrars to facilitate better service(i) Any change in their address/mandate/bank details; and(ii) Particulars of the bank account in which they wish their dividend to be credited, incase not furnished

earlier.Shareholders are advised that respective bank details and address as furnished by them to the Company will be printed on their dividend warrants as a measure of protection against fraudulent encashment.COMPLIANCE wITH NON- MANDATORY REqUIREMENTSThe Chairman of the Board: No separate office is maintained for Non- Executive Chairman. No specific tenure has been specified for the Independent DirectorsRemuneration Committee: Details are given under the heading ‘Remuneration Committee’Shareholder Rights : The Financial results are put up on the Company’s website, besides being available on the SEBI’s website. The Company does not send half yearly declaration of financial performance to its shareholdersAuditQualifications:During the year under review, there were no audit qualifications on the Company’s financial statements. Training of Board Members: All the members of the Board are well qualified senior industrialists/ professionals actively engaged in their respective fields of specialisation on a day to day basis. The Company will address the requirement of training of Board members as and when considered necessary.Mechanism for evaluation of Non-executive Board members: The performance evaluation of Non-executive members of the Board is done by the Board based on criteria of attendance and contributions at Board/Committee meetings as also for the role played/contributions made other than at meetings.whistle Blower Mechanism: The Company has put in place a ‘whistle blower policy’ and no personnel have been denied access to the members of the Audit Committee. Names, addresses and contact numbers of the Audit Committee members are prominently displayed in the plants with clear assurance that any employee who observes an unethical or improper practice is free to approach the Members of the Audit Committee without fear of unfair treatment.The Disclosures on Voluntary Guidelines issued by the Ministry of Corporate Affairs in December, 2009 will be reviewed by the Board during the current year.DECLARATION BY THE CEO UNDER CLAUSE 49 OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE CODE OF CONDUCTIn accordance with Clause 49 1(D) of the Listing Agreement with the Bombay Stock Exchange Ltd., I hereby confirm that all Directors and Senior Management personnel have affirmed compliance with the Code of Conduct of the Company for the financial year ended 31st March 2010.For Automobile Corporation of Goa Ltd., Sd/-

N R MenonManaging DirectorHonda, Goa.Dated : 24th May, 2010

25

AUDITORS’ CERTIFICATE ON COMPLIANCE OF CONDITIONSOF CORPORATE GOVERNANCE

To,

The Members of Automobile Corporation of Goa Limited

We have examined the compliance of conditions of Corporate Governance by Automobile Corporation of Goa Limited for the year ended on 31st March, 2010, as stipulated in clause 49 of the Listing Agreement of the said Company with the Bombay stock exchange.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of corporate governance as stipulated in the abovementioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the Company nor efficiency or effectiveness with which the management has conducted the affairs of the Company.

For DELOITTE HASKINS & SELLS Chartered Accountants

Registration No. 117366W

N. VENKATRAM Partner

Membership no. 71387MumbaiDated: 2nd July, 2010



26

AUDITORS’ REPORTTO THE MEMBERS OF AUTOMOBILE CORPORATION OF GOA LIMITED

1. We have audited the attached Balance Sheet of AUTOMOBILE CORPORATION OF GOA LIMITED (“the Company”) as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we invite attention to Note 3 of Schedule 14 regarding Managerial Remuneration pertaining to the year 2009-2010 paid/payable to the Managing Director and the Executive Director which is subject to the approval of the Central Government as stated therein.

5. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(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 it appears from our examination of those books;

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

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date and

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

6. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

For DELOITTE HASKINS & SELLSChartered Accountants


N. VENKATRAMPartner

Membership No. 71387

MUMBAI, 29th April ,2010

27

ANNEXURE TO THE AUDITORS’ REPORT (Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’s business/activities, clauses (xiii) and (xiv) of Paragraph 4 of the Companies (Auditor’s Report) Order, 2003 are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) Major items of fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Since the value of the said transaction does not exceed Rupees five lakhs, the information required under clause (v) (b) of Paragraph 4 of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year and hence directives issued by the Reserve Bank of India and provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under are not applicable to the Company.

(viii) In our opinion, the internal audit function carried out during the year, by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business



28

(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of pressed parts/ components/ sub-assemblies manufactured by its Sheet Metal Division and are of the opinion that prima facie the prescribed accounts and records have been made and maintained/are under preparation. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(x) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. We are informed that the Employees’ State Insurance Act, 1948 is not applicable to the Company for the year.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Statute Nature of the dues

Forum where dispute is pending Period to which

the Amount relates

Amount in Rupees

Income Tax Act, 1961 Income-tax High Court of Bombay at Goa 1990-91 37,329,969Central Excise Act, 1944 Excise duty Commissioner of Central Excise

(Appeals)1994-95 1,764,663

Central Excise Act, 1944 Excise duty Commissioner of Central Excise (Appeals)

1995-96 79,304

Central Excise Act, 1944 Excise duty Commissioner of Central Excise (Appeals)

1996-97 95,036

Central Excise Act, 1944 Excise duty High Court of Bombay, at Goa 1996-97 2,803,670Central Excise Act, 1944 Excise duty High Court of Bombay, at Goa 2001-02 78,769Central Excise Act, 1944 Excise Duty CESTAT 2005-06 906,642Central Excise Act, 1944 Service Tax CESTAT 2008-09 159,434Central Excise Act, 1944 Excise duty Commissioner of Central Excise

(Appeals)2001-08 297,544

(xi) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the year and in the immediately preceding financial year.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.

(xiii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities

(xiv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xv) In our opinion and according to the information and explanations given to us, the Company has not obtained any term loan during the year and hence the question of commenting on the application thereof does not arise.

29

(xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xvii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xviii)There are no debentures issued and outstanding as at the end of the year and hence the question of creating security or charge in respect thereof does not arise

(xix) During the year, the Company has not raised any money by public issue.

(xx) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLSChartered Accountants


N. VENKATRAMPartner

Membership No. 71387

MUMBAI, 29th April, 2010



30

Balance Sheet as at 31st March, 2010

Schedule

No Rupees Rupees

As At 31st March, 2009

RupeesSOURCES OF FUNDS Shareholders' fundsShare Capital 1 64,216,220 64,216,220 Reserves and surplus 2 1,223,029,271 1,251,957,961

1,287,245,491 1,316,174,181 Loan funds Secured loans 3 86,309,088 11,001,498 Deferred tax liability (net) 13,395,600 29,153,000

Total 1,386,950,179 1,356,328,679 APPLICATION OF FUNDS Fixed assets 4Gross block 983,108,421 901,773,144 Less: depreciation/amortisation 516,518,276 475,511,011 Net block 466,590,145 426,262,133 Capital work -in- progress 10,958,320 34,176,993

477,548,465 460,439,126 Investments 5 400,444,069 527,010,483 Current assets, loans and advancesInventories 6 373,494,741 184,331,165 Sundry debtors 7 203,895,427 243,429,435 Cash and bank balances 8 7,207,643 139,897,169 Loans and advances 9 604,006,325 460,075,916

1,188,604,136 1,027,733,685 Less: Current liabilities and provisions 10Current liabilities 615,149,891 535,059,344 Provisions 64,496,600 123,795,271

679,646,491 658,854,615 Net current assets 508,957,645 368,879,070

Total 1,386,950,179 1,356,328,679 Significant Accounting Policies andNotes on Accounts 14

As per our attached report of even date S. V. Salgaocar ChairmanFor Deloitte Haskins & Sells Chartered Accountants P. F. X. D’Lima R. S. Thakur P. M. Telang Directors S. M. Kuvelker N. R. Menon Managing DirectorN. VENKATRAM Ananth PrabhuPartner Executive Director (Commercial) & SecretaryPlace : Mumbai, Place : Mumbai, Dated : 29th April, 2010 Dated : 29th April, 2010

}

31

Profit and Loss Account for the year ended 31st March, 2010Schedule

No Rupees RupeesPrevious year

RupeesINCOME Turnover (Gross) 2,357,194,717 3,232,730,630 Conversion / Repair Charges 1,744,747 2,973,072 Sale of Scrap 104,268,881 164,375,203

2,463,208,345 3,400,078,905 Less: Excise duty 129,619,627 157,599,744 Turnover (Net) 2,333,588,718 3,242,479,161 Other income 11 46,447,141 58,437,321

Total 2,380,035,859 3,300,916,482

EXPENDITUREManufacturing and Other Expenses 12 2,372,384,037 3,009,797,102 Excise duty 49,258 - Depreciation / amortisation 42,264,478 34,250,957 Interest 13 2,511,200 2,862,493

Total 2,417,208,973 3,046,910,552 (Loss)/Profit before prior period items, exceptional item and tax (37,173,114) 254,005,930

Exceptional item ( Refer Note 26 of schedule 14 ) - 27,597,731

(Loss)/Profit before tax (37,173,114) 281,603,661 Provision for tax :Current tax - 76,500,000 Deferred tax (15,757,400) 10,649,400 Fringe Benefit tax - - 846,200

(15,757,400) 87,995,600 Excess provision for tax in respect of earlier years written back (net) - 920,096 (Loss)/Profit after tax (21,415,714) 194,528,157 Surplus brought forward from previous year 383,095,238 285,096,847 Amount available for appropriation 361,679,524 479,625,004 Proposed Dividend 6,421,622 64,216,220 Corporate Dividend tax there on 1,091,354 10,913,546 Transfer to General reserve - 21,400,000 Surplus carried to Balance Sheet 354,166,548 383,095,238 Basic and Diluted Earnings per share (face value Rs.10/- per share) (3.33) 30.29

(Refer Note 11 of schedule 14)Significant Accounting Policies andNotes on Accounts 14


}



32

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

Previous yearParticulars Rupees Rupees Rupees Rupees

A. Cash flow from operating activities(Loss)/Profit before tax adjustments for:

(37,173,114) 281,603,661

Non-Cash Items:Depreciation 42,264,478 34,250,957 Sales tax deferral loan waiver(disclosed as exceptional item)

- (27,597,731)

Provision for diminution in value of current investment (non-trade) written back

- (66,787)

Provision for doubtful debts/ advances (net)

5,739,627 2,952,453

Bad debts/advances written off 403,367 1,377,857 Unrealised exchange differences 52,128 (5,294)Others:Loss on sale of fixed assets 75,607 501,170 Loss on fixed assets written off 7,057 - Profit on sale of Current investments (non-trade)

- (11,644,317)

Interest expense 2,511,200 2,862,493 Interest Income (24,359,754) (11,825,823)Dividend Income (12,139,546) (24,428,996)Profit on sale of fixed assets (223,029) (1,424,828)Operating(loss)/profit before working capital changes

(22,841,979) 246,554,815

Decrease in trade and other receivables 26,906,621 81,775,757 (Increase)/Decrease in inventories (189,163,576) 64,624,584 Increase/(Decrease) in trade and other payables

90,909,269 (24,913,352)

Cash (used in)/ generated from operations

(94,189,665) 368,041,804

(Payment) of direct taxes (11,191,879) (72,205,187)Net cash generated from operating activities

(105,381,544)

295,836,617

B. Cash flow from investing activitiesPurchase of Fixed assets (60,019,418) (140,480,179)Purchase of Current investments (1,367,211,614) (1,164,698,766)Sale of Current investments 1,493,778,028 1,259,261,573 Sale of fixed assets 785,966 2,618,426 Inter Corporate Deposit given (130,000,000) - Interest received 24,359,754 11,825,823 Dividend received 12,139,546 24,428,996 Net cash (used in) investing activities (26,167,738) (7,044,127)

33

Previous yearParticulars Rupees Rupees Rupees Rupees

C. Cash flow from financing activitiesProceeds from/(Repayment of) short term borrowings

75,307,590 (56,482,027)

Repayment of unsecured Loan - (20,830,269)Dividend paid (including corporate dividend tax)

(73,936,634) (73,194,792)

Interest paid (2,511,200) (2,922,090) Net cash (used in)/generated from financing activities

(1,140,244) (153,429,178)

Net (decrease)/increase in cash and cash equivalents (A+B+C)

(132,689,526) 135,363,312

Cash and cash equivalents as at 31st March, 2009

139,897,169 4,533,857

Cash and cash equivalents as at 31st March, 2010

7,207,643 139,897,169

Components of cash and cash equivalents as at

31st March, 2010

31st March, 2009

Cash on hand 170,554 92,988 Balances with banks - Current Accounts 5,122,167 9,130,529 -Savings Account 2,000 2,000 - on Deposits Accounts 1,912,922 130,671,652

Notes:1. The above Cash Flow Statement has been prepared under the “Indirect Method set out in Accounting

Standard( AS-3)”Cash Flow Statements notified in the Companies (Accounting Standards) Rules,20062. Figures relating to previous year have been recast where necessary to conform to the figures of the

current year.


}



34

As at 31st March, 2009

Rupees Rupees RupeesSCHEDULE : 1SHARE CAPITAL: Authorised : 10,000,000 Equity Shares of Rs. 10/- each 100,000,000 100,000,000 1,500,000 Preference Shares of Rs. 100/- each 150,000,000 150,000,000

250,000,000 250,000,000 Issued: 6,421,622 Equity Shares of Rs. 10/- each 64,216,220 64,216,220 Subscribed and paid-up : 6,421,622 Equity Shares of Rs. 10/- each fully paid 64,216,220 64,216,220 Total 64,216,220 64,216,220

SCHEDULE : 2 RESERVES AND SURPLUS : Capital reserve - Central capital subsidy As per last Balance sheet 5,000,000 5,000,000 Share premium account As per last Balance Sheet 680,818,433 680,818,433 General Reserve As per last Balance Sheet 91,038,290 69,638,290 Add: Amount transferred from Profit and Loss account

- 21,400,000

91,038,290 91,038,290 Capital Redemption Reserve Account As per last Balance Sheet 92,006,000 92,006,000

Surplus in Profit and Loss account 354,166,548 383,095,238 Total 1,223,029,271 1,251,957,961

SCHEDULE : 3SECURED LOANS:From Banks:Cash Credit accounts (refer note below) 86,309,088 11,001,498 Total 86,309,088 11,001,498 Note:Loans from Banks on Cash Credit accounts are secured by hypothecation of stocks, stores, work-in-process, finished goods, book debts and receivables, Investment, both present and future.

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH 2010.

35

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36


Rupees Rupees RupeesSCHEDULE : 5INVESTMENTS :(a) Long Term (Unquoted, at cost) Trade Investments 455,000 Equity Shares of Ashiyana Autobodies

Ltd of Rs.10/- each fully paid-up

4,550,000

4,550,000 Less : provision 4,550,000 4,550,000 Total long term investments (A) - - (b) Current investments * (Non Trade, Unquoted)

(At lower of cost and fair value) 39,918,663.1590( previous year (45,249,654.7680)

units in HDFC Cash Management Fund -Treasury advantage Plan- Wholesale - Daily

Dividend 400,444,069 453,921,912

Nil (previous year 2,009,554.8090) units in TATA Floater Fund -Daily Dividend

- 20,167,088

Nil( previous year 5,005,105.4850) units in ICICI Prudential

-Flexible Income Plan Dividend - daily - 52,921,483 Total Current investments (B) 400,444,069 527,010,483

Total (A+B) 400,444,069 527,010,483 * includes unutilised monies Rs 253,373,852 /- (Previous year Rs.424,155,615/-) out of proceeds of Rights shares issued during the year ended 31st March 2008, temporarily invested pending utilisation for the intended purpose.

Note1. Investments purchased and sold during the

year- Refer note 21of schedule 14

SCHEDULE : 6INVENTORIES(At cost or Net realisable value, whichever is lower except scrap which is at net realisable value)Stores and spare parts (including packing materials) 10,531,385 5,168,869 Stock-in-trade:Raw materials and components 290,911,001 76,845,418 Work-in-process 59,792,062 90,131,793 Finished goods 7,625,313 10,354,640 Scrap 4,634,980 1,830,445

362,963,356 179,162,296 Total 373,494,741 184,331,165


37

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH 2010.As at

31st March, 2009 Rupees Rupees Rupees

SCHEDULE : 7SUNDRY DEBTORS :(Unsecured)Debts outstanding for a period exceeding six months 18,257,101 51,957,748 Other debts 195,083,922 195,177,656

213,341,023 247,135,404 Less : provision 9,445,596 3,705,969

Total 203,895,427 243,429,435 Notes:Considered good 203,895,427 243,429,435 Considered doubtful 9,445,596 3,705,969

Total 213,341,023 247,135,404

SCHEDULE : 8CASH AND BANK BALANCES:Cash on hand 170,554 92,988 Balances with scheduled banks:a) In current accounts. 5,122,167 9,130,529 b) In deposit accounts.# 1,912,922 130,671,652

7,035,089 139,802,181 - with othersIn Post Office Savings Bank Account (Security deposit)

2,000 2,000

Maximum amount outstanding during the year Rs. 2,000/-(Previous year Rs. 2,000/-)

Total 7,207,643 139,897,169 Note:#Includes Margin money against Bank guaranteeRs.1,912,922/-(Previous year Rs. 671,652/-)

SCHEDULE:9LOANS AND ADVANCES:(Unsecured and considered good)Advances recoverable in cash or in kind or for value to be received 593,374,814 457,288,104 Balance with Central Excise Authorities 400,161 54,606 Advance tax (Net) 10,231,350 2,733,206

Total 604,006,325 460,075,916



38


Rupees Rupees Rupees

SCHEDULE:10CURRENT LIABILITIES AND PROVISIONS:a) Current Liabilities: Sundry Creditors

i) Total outstanding dues of micro enterprises and small enterprises

10,163,193

6,708,732

ii) Total outstanding dues of creditors other than micro enterprises and small enterprises

590,482,229

518,443,187

600,645,422 525,151,919 Due to Investor Education and Protection Fund - 840,298 Other Liabilities 14,504,469 9,067,127

615,149,891 535,059,344 b) Provisions: For Tax [Net of Advance Tax Rs. 182,842,730/-

[(Previous year,Rs.178,807,680/-)] 3,324,695 7,018,430

For warranty 6,693,685 4,513,013 For leave encashment 25,646,866 22,012,504 For Gratuity 21,318,378 15,121,558 Proposed Dividend 6,421,622 64,216,220 Corporate Dividend Tax 1,091,354 10,913,546

64,496,600 123,795,271 Total 679,646,491 658,854,615


39

Rupees Rupees Previous Year

RupeesSCHEDULE:11OTHER INCOME:Interest on bank deposits 631,534 11,825,823 (Tax deducted at source Rs. 609,645/-) (Previous year Rs1,856,669/-)

-

Interest on Inter Corporate Deposits 23,728,220 - (Tax deducted at source Rs.2,372,824/-) (Previous year Rs nil/-)Provision for diminution in value of current investment written back

- 66,787

Dividend on current investments ( non-trade) 12,139,546 24,428,996 Profit on sale of fixed assets 223,029 1,424,828 Royalty 7,115,294 1,960,658 Profit on sale of current investments (non-trade) - 11,644,317 Exchange differences (Net) 1,297 - Operating lease rent 1,489,324 1,367,790 Excise duty - 422,046 Miscellaneous income 1,118,897 5,296,076

Total 46,447,141 58,437,321

SCHEDULE:12MANUFACTURING AND OTHER EXPENSESRaw materials and components consumed 1,589,095,716 2,191,494,391 Stores and spare parts consumed 160,221,864 212,975,634 Payments to and provisions for employees:(including paid to personnel on deputation)Salary, wages and bonus 159,085,034 152,314,662 Contribution to Provident Fund 10,726,957 9,632,333 Contribution to Superannuation Fund 13,774,406 12,007,654 Gratuity 8,702,612 3,914,638 Leave encashment 5,711,922 188,706 Staff welfare expenses 26,385,066 26,381,752

224,385,997 204,439,745

Schedules Forming Part Of The Profit And Loss Account For The Year Ended 31st March 2010



40

Rupees Rupees Previous Year

RupeesSCHEDULE:12 (Contd....)Power 25,852,728 26,654,716 Processing / labour charges 221,305,791 250,869,990 Repairs and maintenance:- buildings 5,520,878 13,388,448 - machinery 7,393,293 10,454,583 - others 2,043,530 1,409,719

14,957,701 25,252,750 Insurance 2,199,705 3,159,216 Rates and taxes 2,100,182 2,537,288 Rent 2,024,483 1,927,605 Packing,freight and forwarding expenses 33,034,600 21,673,319 Directors' fees 400,000 500,000 Loss on scrapping of fixed assets 7,057 - Loss on fixed assets written off 75,607 501,170 Commission on sales 346,447 529,593 Miscellaneous expenses 56,504,160 31,210,494 Research and Development expenses 846,345 1,968,962 Warranty expenses (net of excess provision written back

2,618,137 3,085,640

Rs.4,617,361/-(Previous year Rs.3,458,460/-)Provision for doubtful debts/ advances (net of provision written back

5,739,627 2,952,453

Rs.400,147/-(Previous year Rs.482,858/-) Bad debts/advances written off 403,367 1,377,857 Exchange differences (Net) - 377,041 Decrease/(Increase) in stocks of finished goods,Work - in - process and scrap :Opening stock 102,316,878 128,626,116 Closing stock 72,052,355 102,316,878

30,264,523 26,309,238 Total 2,372,384,037 3,009,797,102

SCHEDULE:13INTEREST:On Bank cash credit accounts 1,137,230 2,219,723 Other Interest 1,373,970 642,770

Total 2,511,200 2,862,493

Schedules Forming Part Of The Profit And Loss Account For The Year Ended 31st March 2010

41

SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNTSCHEDULE: 14 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS A. SIGNIFICANT ACCOUNTING POLICIES a) Basis of preparation of financial statements The financial statements are prepared under historical cost convention on the accrual basis of

accountingandinaccordancewithaccountingprinciplesgenerallyacceptedinIndia. b) Management estimates The preparation of financial statements in conformity with generally accepted accounting

principles in India requires the Management to make estimates and assumptions consideredin the reportedamountsofassetsand liabilities (includingcontingent liabilities)asof thedateofthefinancial statementsand the reported incomeandexpensesduring the reportedperiod.TheManagementbelievesthattheestimatesusedinpreparationofthefinancialstatementsareprudentandreasonable.Futureresultscoulddifferfromtheseestimates.

c) Fixed Assets: Fixed assets are carried at cost of acquisition or construction and include amounts added on

revaluation,lessaccumulateddepreciationandimpairmentloss. d) Depreciation/Amortisation: 1. Inrespectoffixedassetsrevalued,depreciationisprovidedonthebasisofusefullifeofassetsas

estimatedbytheexternalvaluersorthatcalculatedonoriginalcostwhicheverishigher. 2. Depreciationonotherfixedassetshasbeenprovidedintheaccountsattheratesandinthe

mannerspecifiedinScheduleXIVtotheCompaniesAct,1956asunder: i. SheetMetalDivisions(Honda,Bhuimpal,Jejuri):OnWrittenDownValueMethodinrespect

ofbuildings, furnitureandfixturesandvehiclesandonStraightLineMethod in respectofplantandmachinery.

ii. BusBodyDivision:Onstraightlinemethod. 3. Costofleaseholdlandisamortisedovertheperiodoflease. e) Impairment Loss: Impairmentlossisprovidedtotheextentthecarryingamountofassetsexceedstheirrecoverable

amount.Recoverableamountisthehigherofanasset'snetsellingpriceanditsvalueinuse.Valueinuseisthepresentvalueofestimatedfuturecashflowsexpectedtoarisefromthecontinuinguseoftheassetandfromit'sdisposalattheendofit'susefullife.Netsellingpriceistheamountobtainablefromthesaleoftheassetinanarm'slengthtransactionbetweenknowledgeable,willingparties,lessthecostofdisposal.

f) Intangible Assets Intangibleassetsarestatedatcostlessaccumulatedamortisation.Computersoftwareisamortised

overaperiodoffouryears. g) Investments : Currentinvestmentsarecarriedatlowerofcostandfairvalue.LongTerminvestmentsarecarried

atcostHoweverwhenthereisadecline,otherthantemporary,thecarryingamountisreducedtorecognisethedecline.

h) Inventories: Itemsofinventoryarevaluedonthebasisgivenbelow:

i. Rawmaterial:atcostornetrealisablevalue,whicheverislower.CostisdeterminedbytheWeightedAverageMethod.

ii. Components,StoresandSpares:atcostornetrealisablevalue,whicheverislower.CostisdeterminedbytheWeightedAverageMethod(Refernote27ofSchedule14)

iii. WorkinprocessandFinishedgoods:atcostornetrealisablevalue,whicheverislower.Costisdeterminedonthebasisofabsorptioncosting.

iv. Scrap:atnetrealisablevalue.



42

i) Employee Benefits: i) Gratuity TheCompanyhasanobligationtowardsgratuity,adefinedbenefitretirementplancovering

eligibleemployees.Theplanprovidesforlumpsumpaymenttovestedemployeesatretirement,deathwhileinemploymentoronterminationofemploymentofanamountequivalentto15to30dayssalarypayableforeachcompletedyearofservice.Vestingoccursuponcompletionoffiveyearsofservice.ThecompanyhasobtainedinsurancepolicywithLifeInsuranceCorporationofIndiaThecompanyaccountsfortheliabilityforgratuitybenefitspayableinfuturebasedonanindependentactuarialvaluation,carriedoutasattheyearend.

ii) Superannuation ThecompanyhasaSuperannuationplan(definedcontributionplan).TheCompanymaintains

separate irrevocabletrust foremployeescoveredandentitledtobenefits.ThecompanyhasobtainedinsurancepolicywithLifeInsuranceCorporationofIndia.Thecompanycontributes15%ofeligibleemployee’ssalarytothetrusteveryyear.Thecompanyrecognizessuchcontributionsasanexpensewhenincurred.Thecompanyhasnofurtherobligationbeyondthiscontribution

iii) Provident Fund Theeligibleemployeesof theCompanyareentitled to receivebenefitsunder theprovident

fund,adefinedcontributionplan,inwhichbothemployeesandthecompanymakemonthlycontributionsata specifiedpercentageof thecoveredemployee’s salary (currently12%ofemployee’ssalary).Thecontributionsasspecifiedunderthelawarepaidtotheprovidentfundtrust.ContributiontowardsPensionfundispaidtotheRegionalProvidentfundcommissioneratspecifiedpercentageofthecoveredemployee’ssalaryonmonthlybasis.

iv) Compensated absences Thecompanyprovidesfortheencashmentofleaveorleavewithpaysubjecttocertainrules.

Theemployeesareentitledtoaccumulateleavesubjecttocertainlimits,forfutureencashment.Theliabilityisprovidedbasedonthenumberofdaysofunutilizedleaveateachbalancesheetdateonthebasisofanindependentactuarialvaluation,carriedoutasattheyearend.

v) Actuarial gains and losses Theactuarialgainsandlossesarerecognisedimmediatelyinthestatementofprofitandloss.

j) Accounting of Cenvat Credit: Cenvat credit is accounted as per actual credit availed in the Excise records, on receipt of

materials. k) Foreign Currency Transactions : Transactionsinforeigncurrencyarerecordedattheoriginalratesofexchangeinforceatthetime

thetransactionsareeffected.At theyear-end,monetary itemsdenominated in foreigncurrencyare reportedusing theclosing rates of exchange. Exchangedifferencesarising thereonandonrealisation/paymentsofforeignexchangeareaccountedasincomeorexpenseintherelevantyear.

l) Revenue recognition: Revenue(income)isrecognisedwhennosignificantuncertaintyastomeasurabilityorcollectibility

exists. m) Borrowing costs: Borrowing costs that are attributable to the acquisition, construction or production of qualifying

assetsarecapitalisedaspartof thecostofsuchassets.Aqualifyingasset isonethatnecessarilytakesasubstantialperiodof timetoget ready for its intendeduse.Allotherborrowingcostsarechargedtorevenue.

n) Leases Assetsacquiredonleaseswheresignificantportionsoftherisksandrewardsincidentaltoownership

areretainedby thelessorsareclassifiedasoperatingleases.Leaserentalsarechargedtotheprofit&lossaccountonaccrualbasis.

43

Rentalsreceivedonassetsgivenonoperatingleasesarerecognisedasincomeintheprofitandlossaccountonstraight-linebasisovertheperiodoftheleaseasperthetermsofagreement.

o) SEGMENTAL ACCOUNTING Thefollowingaccountingpolicieshavebeenfollowedforsegmentreporting: Segment Revenue includes Sales and other income directly identifiable with / allocable to the

segment. Expensesthataredirectlyidentifiablewith/allocabletosegmentsareconsideredfordetermining

theSegmentResults.TheexpenseswhichrelatetotheCompanyasawholeandnotallocabletosegmentsareincludedunderUnallocableexpenses.

Segment assets and liabilities include those directly identifiable with the respective segments.Unallocable corporate assets and liabilities represent the assets and liabilities that relate to theCompanyasawholeandnotallocabletoanysegment.UnallocatedassetsmainlycompriseCashandBankbalances.

UnallocableliabilitiesincludeDeferredtax,Securedloans,Provisionfortax(netofadvancepaymentoftaxes)andOtherliabilities.

p) Fringe Benefit Tax: Provision forFringeBenefitTax ismade inaccordancewithChapterXII-Hof the IncomeTaxAct,

1961. q) Taxes on Income: Taxexpensecomprisebothcurrenttaxanddeferredtaxattheapplicableenacted/substantively

enactedrates.Currenttaxrepresentstheamountofincometaxpayable/recoverableinrespectoftaxableincome/lossforthereportingperiod.Deferredtaxrepresentstheeffectoftimingdifferencesbetween taxable incomeandaccounting income for the reportingperiod thatoriginate inoneperiodandarecapableofreversalinoneormoresubsequentperiods.

r) Product Warranty Expenses Theestimatedliabilityforproductwarranties isrecordedwhenproductsaresold.Theseestimates

areestablished usinghistoricalinformationonthenature,frequencyandaveragecostofwarrantyclaims.

s) Provisions and contingencies: AprovisionisrecognisedwheretheCompanyhasalegalandconstructiveobligationasaresultofa

pastevent,forwhichitisprobablethatcashoutflowwillberequiredandareliableestimatecanbemadeoftheamountof theobligation.AContingentliabilityisdisclosedwhentheCompanyhasapossibleorpresentobligationwhereitisnotprobablethatanoutflowofresourceswillberequiredtosettleit.Contingentassetsareneitherrecognisednordisclosed.

t) Government Grants: GrantsrelatedtospecificFixedAssetsaredisclosedasadeductionfromthevalueofconcerned

Assets.GrantsrelatedtorevenuearecreditedtotheProfitandLossAccount.Grantsinthenatureofpromoter'scontributionaretreatedasCapitalReserve.



44

SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNTNOTES ON ACCOUNTS 1 Estimatedamountofcontracts remaining tobeexecutedonCapitalAccountandnotprovided for

Rs.12,578,721/-(PreviousyearRs.21,873,473/-)2 Contingentliabilityinrespectof: i. DisputeddemandsofexciseauthoritiesRs.6,185,062/-(PreviousyearRs.6,964,013/-) - Pendingbefore theCommissioner ofCentral Excise (Appeals) Rs. 1,939,003/-, (Previous Year

Rs.1,939,003/-) - PendingbeforeHighCourtofBombay,atGoaRs.2,882,439/-,(PreviousYearRs.2,882,439/-) - PendingbeforeCESTATRs.1,066,076/-,(PreviousYearRs.1,566,335/-) - PendingfilingappealwithCESTATRs.297,544/-(PreviousyearRs.576,236/-). TheCompany isconfidentofdefendingtheabovedemandsandexpectsno liabilityon this

count. ii. Claims against the Company not acknowledged as debts Rs.3,410,000/- (Previous year Rs.

9,943,810/-) - ClaimraisedbyDelhiTransportCorporationRs.Nil(PreviousyearRs.6,533,810/-)pendingbefore

theDelhiHighCourt.Duringtheyear,thematterwasdecidedagainstthecompanyandtheliabilityhassincebeensettled.

- ClaimraisedbyacustomerRs.3,235,000/-(PreviousYearRs.3,235,000/-)towardsdisputedpenalchargesfordelayinmeetingdeliverydeadlines.

- Penalty proposed to be levied by the Securities and Exchange Board of India Rs. 175,000/- (Previous Year Rs.175,000/-) for alleged violation of regulation 6 and 8 of SEBI (Substantialacquisitionofsharesandtakeovers)Regulations1997(pendingbeforetheAdjudicatingOfficer)noticedated21.07.2004.

TheCompanyisconfidentofdefendingtheabovedemandsandexpectsnoliabilityonthesecounts.

iii. AppealbytheIncomeTaxDeptagainsttheorderofIncomeTaxAppellateTribunal(ITAT)-amountshownintheappealRs.37,329,969/-(PreviousyearRs.37,329,969/-)

- The IncomeTaxDepartmenthasgone inappealagainst theOrderof the ITAT in respectofdepreciationnotclaimedbytheCompanyin

AssessmentYear1990-91, the income tax liabilityonwhich is stated tobecomputedby thedepartment at Rs. 3,732,996 which, due to a typographical error, has been shown as Rs.37,329,969/-intheappeal.

TheCompany isconfidentofdefending theabovedemandandexpectsno liabilityon thiscount.

iv. DisputeddemandofRs.1,000,000/- (PreviousyearRs.1,000,000/-)asandbywayofdamages, forallegedbreachofagreementtoselltheBungalowsituatedatPanaji,Goa.

- AppealpendingbeforeHighCourtofBombayatGoa v. BillsdiscountedwithabankRs.729,614,768/-(PreviousyearRs.548,413,885/-)3 ManagerialremunerationunderSection198oftheCompaniesAct,1956totheManagingDirectorand

anExecutiveDirector: Previous

YearRupees Rupees

a)Remuneration 5,970,708 8,152,458b)ContributiontoProvidentandOtherFunds 350,290 350,290c)Perquisitesincashorinkind 1,037,018 971,997Total 7,358,016 9,474,745

45

Notes: - Theaboveremunerationexcludescontributiontogratuityandleaveencashmentastheincremental

liabilityhasbeenaccountedforthecompanyasawhole.

- TheaboveremunerationisinexcessofthelimitsspecifiedinScheduleXIIIoftheCompaniesAct,1956andhenceissubjecttoapprovalofCentralGovernmentunderSection198/309oftheCompaniesAct,1956.ThecompanyisintheprocessofmakingtheapplicationtotheCentralGovernment.

4 ComputationofnetprofitsasperSection349readwithSection309(5)andSection198oftheCompaniesAct,1956.

PreviousYearRupees Rupees

ProfitbeforetaxasperProfitandLossaccount - 281,603,661Add: a) Managerialremuneration - 9,474,745b) CommissiontoNon-ExecutiveDirectors - 2,600,000c) Provisionfordoubtfuldebts/advances - 3,435,311d) Provisionforwarranty - 6,544,100e) Diminutioninthevalueofcurrentinvestments - -f) Lossonsaleofcurrentinvestments -g) Directorsfee [ReferNoteBelow] - 500,000

- 304,157,817Less:a)Profitonsaleofcurrentinvestments - 11,644,317b)Provisionfordiminutioninvalueofcurrentinvestmentwrittenback - 66,787c)ExcessProvisionforWarrantywrittenback - 3,458,460d)Salestaxdeferralloanwrittenback(Exceptionalitem) - 27,597,731e)Provisionfordoubtfuldebts/advanceswrittenback - 482,858Netprofit - 260,907,664

Notes: - Commission@1%ofnetprofittoNon-ExecutiveDirectorsrestricted

bytheBoardto - 2,600,000

- Computation of net profit as per Section 349 read with Section 309(5) and Section 198 of theCompaniesAct,1956 isnotgiven for thecurrentyearasnocommission ispayable toanyof theDirectorsduringtheyear.

5 ThedisclosureasrequiredunderAS-15regardingtheCompany'sdefinedbenefitplansisasfollows:I. Reconciliation of opening and closing balances of Defined Benefit obligation

PreviousYear

Gratuity (Funded)

Leave Encashment (Unfunded)

Gratuity (Funded)

LeaveEncashment (Unfunded)

DefinedBenefitobligationatbeginningoftheyear

40,567,760 22,012,504 36,007,707 23,023,533

CurrentServiceCost 2,552,157 3,427,326 2,453,455 (330,446) InterestCost 3,328,739 1,057,603 3,022,049 990,924 Actuarial(gain)/loss 5,121,379 1,226,993 455,660 (471,772) Benefitspaid (3,021,366) (2,077,560) (1,371,111) (1,199,735) Settlementcost - - - - DefinedBenefitobligationatyearend 48,548,669 25,646,866 40,567,760 22,012,504



46

II. Reconciliation of opening and closing balances of fair value of plan assetsPreviousYear

Gratuity (Funded)


Gratuity (Funded)


Fairvalueofplanassetsatbeginningoftheyear

25,446,202 22,368,847

Expectedreturnonplanassets 2,115,305 1,929,219 Actuarialgain/(loss) 184,358 87,307 Employercontribution 2,505,792 2,431,940 Benefitspaid (3,021,366) (1,371,111) Settlementcost - - Fairvalueofplanassetsatyearend 27,230,291 25,446,202III. Reconciliation of fair value of assets and obligations

Gratuity (Funded)


Gratuity (Funded)


Present value of obligation as at 31stMarch,2010

48,548,669 25,646,866 40,567,760 22,012,504

Fairvalueofplanassetsasat31stMarch,2010

27,230,291 - 25,446,202 -

AmountrecognizedinBalanceSheet (21,318,378) (25,646,866) (15,121,558) (22,012,504)IV. Expense recognized during the year(Underthehead"PaymentstoandProvisionsforEmployees"-

ReferSchedule12)Gratuity

(Funded)Leave

Encashment (Unfunded)

Gratuity (Funded)


CurrentServiceCost 2,552,157 3,427,326 2,453,455 (330,446) InterestCost 3,328,739 1,057,603 3,022,049 990,924 Expectedreturnonplanassets (2,115,305) - (1,929,219) - Actuarial(gain)/loss 4,937,021 1,226,993 368,353 (471,772) NetCost 8,702,612 5,711,922 3,914,638 188,706V. Actuarial assumptions

Gratuity (Funded)


Gratuity (Funded)


Discountrate(perannum) 8.25% 8.25% 8% 8% Expected rate of return on plan assets

(perannum)8% - 8% -

VI. Theamountsofpresentvalueoftheobligation,fairvalueoftheplanassets,surplusordeficitintheplan,experienceadjustmentsarisingonplanliabilitiesandplanassetsforthecurrentannualperiodandpreviousfourannualperiodsareasunder:

Particulars 2009-10 2008-09 2007-08 Gratuity PresentValueofDefinedBenefit

Obligation 48,548,669 40,567,760 36,007,707

FairvalueofthePlanassets 27,230,291 25,446,202 22,368,848 Surplusor(Deficit)inthePlan (21,318,378) (15,121,558) (13,638,859) ExperienceAdjustment -OnPlanliability(gain)/loss 6,589,945 - NA* -OnPlanAssetsgain/(loss) 184,358 - NA*

47

Leave Encashment Present Value of Defined Benefit

Obligation 25,646,866 22,012,504 23,023,533

FairvalueofthePlanassets - - - Surplusor(Deficit)inthePlan (25,646,866) (22,012,504) (23,023,533) ExperienceAdjustment -OnPlanliability(gain)/loss 1,597,912 - NA* -OnPlanAssetsgain/(loss) - - NA* *NotapplicableastherevisedAS-15wasadoptedbytheCompanyinthefinancialyear2007-08VII. Theassumptionsoffuturesalaryincreases,consideredinactuarialvaluation,takeaccountofinflation,

seniority,promotionandotherrelevantfactors,suchassupplyanddemandintheemployment.

6 ThedisclosuresundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006havebeenmadeonthebasisofconfirmationsreceivedfromsuppliersregardingtheirstatusunderthesaidact;

PreviousYearParticulars Amount in

RupeesAmountin

Rupeesa. OutstandingprincipalAmount&Interestason31stMarch2010

-PrincipalAmount 11,477,403 13,459,916-Interestduethereon 368,494 377,627

b. amount of interest paid along with the amounts of paymentmadebeyondtheappointedday

Nil Nil

c. amount of interest due and payable (where the principal hasalreadybeenpaidbutinteresthasnotbeenpaid)

155,552 154,697

d. theamountofinterestaccruedandremainingunpaidattheendofeachaccountingyear.

524,046 532,324

e. theamountoffurtherinterestremainingdueandpayableevenin succeeding years, until suchdatewhen the interestduesasaboveare actually paid for the purpose of disallowanceas adeductibleexpenditureundersection23ofMSMEDAct

Nil Nil

7 PaymenttoAuditors: PreviousYearRupees Rupees

a.asauditors 1,000,000 1,000,000b.forexpenses 62,525 23,287Total 1,062,525 1,023,287

8 Operating Lease Rentals: Thecompanyhastakencertainshedsandresidentialpremisesoncancelableoperating leasebasis.

AmountofleaserentalschargedtoProfitandlossaccountin respect of such cancelable operatingleasesareRs.2,024,483/-(PreviousYearRs.1,927,605/-).

9 Related Party Disclosures a)Nameofrelatedpartiesandnatureofrelationship:

Name of the party Relationship AshiyanaAutobodiesLtd. Associate

TataMotorsLimited Enterpriseexercisingsignificantinfluence

Mr.N.R.Menon KeyManagementPersonnel

MrAnanthPrabhu KeyManagementPersonnel



48

b) Detailsoftransactionswithrelatedpartiesduringtheyear: (inRupees)

NatureofTransactions Enterpriseexercisingsignificantinfluence

KeyManagementPersonnel

Total

Sale of goods 1,930,210,185 - 1,930,210,185(2,915,262,116) (-) (2,915,262,116)

Purchase of goods 36,073,647 - 36,073,647(7,560,612) (-) (7,560,612)

Bad debts written off 396,331 - 396,331(1,266,087) (-) (1,266,087)

Managerial remunerationAnanthPrabhu - 3,209,303 3,209,303

(-) (3,176,380) (3,176,380)N.R.Menon - 4,148,713 4,148,713

(-) (6,298,365) (6,298,365)Proposed Dividend 2,720,629 - 2,720,629

(27,206,290) (-) (27,206,290)Recovery of expenses 10,175,115 - 10,175,115

(26,177,229) (-) (26,177,229)Reimbursement made for expenses and Cenvat benefit availed

114,699,684 - 114,699,684

(105,179,674) (-) (105,179,674)Deputation Charges 1,444,443 - 1,444,443

(4,939,264) (-) (4,939,264)Inter Corporate Deposit given 670,000,000 - 670,000,000

(-) (-) (-)Inter Corporate Deposit repaid 540,000,000 - 540,000,000

(-) (-) (-)Interest received on Inter Corporate Deposit given

23,728,220 (-)

- (-)

23,728,220 (-)

Outstanding at year end 24,829,098 - 24,829,098Due to (18,034,974) (-) (18,034,974)AnanthPrabhu - 2,185,919 2,185,919

(2,270,976) (2,270,976)N.R.Menon - 4,905,703 4,905,703

(2,693,503) (2,693,503)Due from 100,649,258 - 100,649,258

(184,948,609) (-) (184,948,609) Notes: 1. Provisions for doubtful debts for Rs.1,380,107/-(Previous year Rs.125,673/- )during the year in

respectofdebtsduefromrelatedparties.

2. Figuresinbracketspertaintothepreviousyear.

10 Segment Information (a)Segmentinformationforprimarysegmentreporting(bybusinesssegment)

TheCompanyhastwobusinesssegments:- i) PressingDivision-Manufacturingofpressedparts,components,sub-assembliesandassemblies

forvariousrangeofautomobiles.

ii) BusbodyBuildingDivision-ManufacturingofBusbodiesandcomponentpartsforBusbodies.

(b)Inter-segmentTransferPricing

Inter-segmenttransfersaremadeattransferprice.

49

(c)CommonExpenses Common Expenses are allocated to different segments on reasonable basis as considered

appropriate.

(inRupees)Particulars Pressing

DivisionBus Body building Division

Eliminations Total Pressing Division

Bus Body building Division

Eliminations Total

REVENUEFromexternalcustomers 747,210,642 1,715,997,703 - 2,463,208,345 790,718,782 2,609,360,123 - 3,400,078,905Add:Inter-segmentsales 22,400,394 - (22,400,394) - 77,926,252 - (77,926,252) -Total Revenue 769,611,036 1,715,997,703 (22,400,394) 2,463,208,345 868,645,034 2,609,360,123 (77,926,252) 3,400,078,905RESULTSegment Result 21,947,357 (85,927,154) - (63,979,797) 59,133,053 159,201,047 - 218,334,100UnallocatedCorporateexpenses (7,181,417) (9,431,600)OperatingProfit (71,161,214) 208,902,500InterestExpenses (2,511,200) (2,862,493)Un-allocatedotherincome 36,499,300 75,563,654(Loss)/Profitbeforetax (37,173,114) 281,603,661Provisionfortax (15,757,400) 87,995,600Excess/(Short) provision for tax inrespect of earlier years writtenback(net)

- 920,096

Net(Loss)/ProfitafterTax (21,415,714) 194,528,157OTHER INFORMATIONSegment Assets 193,885,066 1,324,306,732 - 1,518,191,798 174,236,517 1,168,304,833 - 1,342,541,350UnallocatedCorporateAssets 548,404,872 672,641,944Totalassets 2,066,596,670 2,015,183,294Segment Liabilities 73,719,713 589,780,127 - 663,499,840 57,546,221 510,160,029 - 567,706,250UnallocatedCorporateLiabilities 115,851,339 131,302,863Totalliabilities 779,351,179 - 699,009,113Capital expenditure during the year-Additionstosegmentassets 10,251,316 49,768,102 - 60,019,418 27,569,467 112,910,712 - 140,480,179Depreciation/Amortisation 9,837,823 32,426,655 - 42,264,478 10,303,329 23,947,628 - 34,250,957Significant non-cash expense other than depreciation/ amortisation

- - - -

Provision for doubtful debts/advances

218,015 5,521,612 5,739,627 53,491 3,381,821 3,435,312

Baddebts/advanceswrittenoff 324,149 79,218 403,367 183,467 1,194,391 1,377,857Provisionforgratuitywrittenback - - - - - -Provision for doubtful advanceswrittenback

- - - (183,467) (299,392) (482,858)

Unrealisedexchangedifferences 52,128 - 52,128 - (5,294) (5,294)

TheCompanydoesnothaveanyreportablesecondary(geographical)segments.

11 Earnings per share Earningspershare(EPS)iscalculatedbydividingtheprofitattributabletotheequityshareholdersbythe

weightedaveragenumberofequitysharesoutstandingduringtheyearasunder:-PreviousYear

(Loss)/ProfitafterTax(Rupees) (21,415,714) 194,528,157Weightedaveragenumberofsharesoutstandingduringtheyear 6,421,622 6,421,622BasicandDilutedEPS(Rupees) (3.33) 30.29Nominalvaluepershare(Rupees) 10.00 10.00



50

12 Expenditureincurredinforeigncurrencyonaccountof:


i. Travelingexpenses - 337,86213 Valueofimports(calculatedonC.I.F.basis)onaccountof:


Rawmaterialandcomponents 2,278,768 33,145,29814 a) ValueofimportedandindigenousRawmaterials/componentsconsumed:

i. Imported 4,270,197 24,621,774ii. Indigenous 1,584,825,519 2,166,872,617

1,589,095,716 2,191,494,391 b) Percentagetototalconsumption:

i Imported 0.27 1.12ii. Indigenous 99.73 98.88

100.00 100.00 c) Valueofimportedandindigenousstoresandsparepartsconsumed:


i. Imported - -ii. Indigenous 160,221,864 212,975,634

160,221,864 212,975,634 d) Percentagetototalconsumption:

i Imported - -ii. Indigenous 100.00 100.00

100.00 100.0015 Rawmaterialsandcomponentsconsumed:

PreviousYearUnits Quantity Rupees Quantity Rupees

Steel Tonnes 16,308 572,764,701 18,155 805,823,255Others 1,016,331,015 1,385,671,136

1,589,095,716 2,191,494,391


16 FOBvalueofdirectExports 2,984,400 4,987,816 17 TheCompanyhasexportedbusbodiesandcomponentpartsthereofofthesalesvalueofRs.506,997,266/-

(PreviousyearRs.1,826,448,746/-)throughamerchantexporter.

51

18 (i) Informationinregardtoturnover(gross)effectedbytheCompany:

PreviousyearQuantity Value Quantity Value

Nos. Rupees Nos. Rupeesa) Pressed parts/components/sub

assembliesandassembliestherefrom for various aggregates ofautomobiles.

2,260,616

662,720,842

1,966,666

664,858,562b) Bus bodies and components

partsthereof

2,373

1,694,473,875

4,509

2,567,872,068 2,357,194,717 3,232,730,630

(ii) Informationinregardtoopeningandclosingstocks:Openingstock Closingstock

Quantity Value Quantity ValueNos. Rupees Nos. Rupees

Sub-assemblies and Assembliesthere from for various aggregates ofautomobiles(SheetMetalDivisions)

32,655

6,450,729

18,529

6,002,539 PreviousYear 34,258 7,135,216 32,655 6,450,729BusBodiesandcomponentpartsthereof 12 3,903,911 6 1,622,774 PreviousYear 1 126,097 12 3,903,911Total 10,354,640 7,625,313 PreviousYearTotal 7,261,313 10,354,640

(iii)CapacityandProduction:

Units Installed Capacity*

Actual Production

Pressedparts/components/subassemblies/assembliestherefromforvariousaggregatesofautomobilesSheetMetalDivisions:Honda,BhuimpalandJejuri MT 17620 12415 Previousyear MT 17620 11330 Busbodiesandcomponentpartsthereof Nos. 7200 2367 Previousyear Nos. 4800 4520*onthreeshiftbasis,ascertifiedbytheManagement

19 TheamountofexchangedifferenceincludedintheProfitandLossAccountfortheyearis:-Previousyear

Rupees RupeesExchangegain 72,254 624,012Exchangeloss 70,957 1,001,053

20 Major components of deferred tax assets/(liabilities) are as under:

PreviousyearRupees Rupees

Differencesintaxandbookswrittendownvaluesoffixedassets (44,933,332) (38,485,402)Disallowancesundersection43BoftheIncometaxAct,1961 15,526,622 17,355,544Provisionforgratuity 7,081,432 5,139,818Provisionforwarranty 2,223,475 1,533,973Stockadjustmentsundersection145AoftheIncometaxAct,1961 (8,694,728) (15,956,635)Others 3,137,575 1,259,702UnabsorbedDepreciation 12,263,356 -Total (13,395,600) (29,153,000)



52

21Investmentspurchasedandsoldduringtheyear:Previousyear

Rupees RupeesUnits Amount Units Amount

In Mutual funds Units (Unquoted)Facevalueofallunits,Rs.10/-Units in Kotak Mahindra Mutual fund:Kotak Liquid (Institutional) Plan-DailyDividend

- - 4,210,813.7430 51,490,251

KotakFMPII-Series3 - - 15,251,461.1160 152,514,611KotakFMPIII-series8 - - 5,116,797.5700 51,167,975Kotak Flexi Debt Schemeinstitutionaldailydividend

9,999,872.6790 100,473,720.74 - -

Kotak Liquid (institutionalPremium)DailyDividend

8,178,736.0481 100,010,402.27 - -

Units in ING Mutual Fund:ING-LiquidPlusFundInstitutional-DailyDividend

- - 13,216,808.4350 132,211,699

ING-LiquidfundInstitutional-DailyDividend

- - 7,492,234.1560 75,012,997

ING -Short Term Income Fund -Dividend

- - 520,327.3110 6,017,179

ING - FMP 90A - InstitutionalDividend

- - 10,000,000.0000 100,000,000

ING-DailyDividendOption - - 998,978.0280 10,001,867Units in Birla Sunlife BSL -Short TermFund-FortnightlyDividend-Reinvestment

- - 79,584.7080 803,176

HDFC Mutual FundHDFC -High Interest Fund -ShortTermPlan-DividendReinvestment

- - 566,103.2040 6,022,375

HDFC Cash ManagementFund- Treasury Advantage Plan-Wholesale-Dailydividend

7,270,158.0300 72,930,590.28 - -

HDFC Cash Management Fund-Saving Plan - Daily DividendReinvestment

40,431,746.7010 430,048,230.60 - -

Units in ICICI PRUDENTIAL Mutual FundICICIPrudentialLiquidPlan-DailyDividendOption

10,970,301.9540 130,013,436.57 4,430,492.3090 52,507,536

ICICIPrudential-FlexibleIncomePlanDividend-Daily

12,569,565.8450 132,904,304.48 - -

TATA Mutual FundTFLD TATA Floater Fund - DailyDividend

38,548.8540 386,860.88 - -

22 Theexcisedutyrelatedtothedifferencebetweentheopeningandclosingstockoffinishedgoodsisdisclosedseparatelyinthe“Schedule12-OtherIncome”as“ExciseDuty”.

23 Warranty Provision Warrantypertainstoreplacementofdefectivepartsandexpensesincurredinrelationtorectificationof

workmanshipdefects.Previousyear

Particulars Rupees RupeesOpeningcarryingamount 4,513,013 3,408,500Provisionduringtheyear 7,235,498 6,544,100Amountreleasedduringtheyear 437,465 1,981,127

53

ExcessProvisionwrittenback 4,617,361 3,458,460Closingcarryingamount 6,693,685 4,513,013Theoutflowonthiscountcanariseanytimeduringtheperiodof18months

24 Foreigncurrencytransactionsnothedgedbyderivativeinstrument(s):Previousyear

Rupees RupeesReceivables USD 43,200 1,931,472 USD591 29,683

25 In thefinancialyearending31stMarch2007,thecompany issued1,481,913equity sharesofRs.10each

onRightsbasisatapremiumofRs.465/-pershareaggregatingtoRs.703,908,675/-Theobjectsoftheissueweretosubstantiallyincreasecapacity,upgradeandmodernisetheBusBodybuildingfacilitiesandshifttheexisting pressesfromthemainSheetMetalPressingunit(atHonda,Goa)toalocationinoraroundPune.TheRights issueclosedforsubscriptionon20thApril,2007andshareswereallottedon19thMay,2007.ThemanagementhadthendecidedtoshiftthepressingunittoDharwar(Karnataka)insteadofPune.

Further,attheAGMheldon8thAugust,2009,themembershaveapprovedutilisationoftheunspentamountasonthedateofAGMforotherpurposessuchasfundingincrementalworkingcapitalneeds,newbusinessopportunities,in-organicgrowthandtoinvestingroupcompanies.

ThestatementofproceedsfromtheRightsIssueandutilisationthereofisasunder: Particulars RupeesProceedsreceivedfromRightsIssue 703,908,675Less:ExpensesrelatingtotheRightsIssue 9,208,436Netproceeds 694,700,239Deploymentupto31stMarch2010Usedforthecapitalisation 311,326,387Heldascurrentinvestmentinunitsofmutualfunds 253,373,852InIntercorporatedepositplacedwithTataMotorsLimited. 130,000,000

694,700,23926 Thecompanyhadoptedforsalestaxdeferralschemeunderthe1988PackageSchemeofincentive

ofBombaySalesTaxAct,1959undercertificateofentitlementNo412302/S/R-31B/1069dated4/2/2000.ThetotalsalestaxcollectedanddeferredunderthesaidschemeaggregatedtoRs48,428,000/-.Therepaymentundertheschemewasduefrom2010onwards.DuringthepreviousyeartheCompanysettledthefull liabilitybypayinganamountofRs.20,830,269/-beingtheNPV(NetPresentValue)calculatedinaccordancewiththeprovisionsofthesaidact.ThedifferentialamountofRs.27,597,731/-hadbeenaccountedasincomeanddisclosedasan“exceptionalitem”intheProfitandlossaccount.

27 Hitherto,thecompanywasvaluingtheinventoryofComponents,StoresandSparesonFIFOBasis.Duringtheyear,thecompanyhaschangedthemethodtoweightedaverage.Theimpactofthechangeisnotmaterial.

28 Figuresofthepreviousyearhavebeenregroupedwherevernecessarytocorrespondwiththoseofthecurrentyear.

Asperourattachedreportofevendate S.V.Salgaocar ChairmanForDeloitteHaskins&Sells CharteredAccountants P.F.X.D’Lima R.S.Thakur P.M.Telang Directors S.M.Kuvelker N.R.Menon ManagingDirectorN.VENKATRAM AnanthPrabhuPartner ExecutiveDirector(Commercial)&SecretaryPlace :Mumbai, Place : Mumbai,Dated :29thApril,2010 Dated : 29thApril,2010

}



54

Balance Sheet Abstract and Company’s General Business Profile

i. Registration Details Statecode 24 RegistrationNo. 00400/G BalanceSheetDate 31stMarch,2010ii Capital raised during the year (Amounts in Rupees Thousands) PublicIssue NotApplicable RightIssue NotApplicable BonusIssue NotApplicable PrivatePlacement NotApplicableiii Position of Mobilisation and Deployment of Funds (Amounts in Rupees Thousands) TotalLiabilities 2,066,597 TotalAssets 2,066,597 SourcesofFunds PaidupCapital 64,216 ReservesandSurplus 1,223,029 SecuredLoans 86,309 UnsecuredLoans - Deferredtaxliability(net) 13,396 ApplicationofFunds NetFixedAssets 477,548 Investments 400,444 NetCurrentAssets 508,958 MiscellaneousExpenditure - AccumulatedLosses -iv. Performance of the Company (Amounts in Rupees Thousands) Turnover(TotalIncome) 2,380,036 TotalExpenditure(includingextraordinaryitems) 2,417,209 ProfitBeforeTax (37,173) ProfitAfterTax (21,416) EarningspershareinRs. ReferNoteno.11above Dividendrate 10%

v. Generic Names of Three Principal Products/Services of Company1. ItemCodeNo. : 87.08 (ITCCode) ProductDescription : PressedParts/Components/Sub-assemblies/

Assembliestherefromforvariousaggregatesofautomobiles.2. ItemCodeNo. : 87.07 (ITCCode) ProductDescription: BusBodies3. ItemCodeNo. 72.04 (ITCCode) ProductDescription : WasteandScrapofSteel

S.V.Salgaocar Chairman

P.F.X.D’Lima R.S.Thakur (Directors) P.M.Telang S.M.Kuvelker

N.R.Menon ManagingDirector AnanthPrabhu ExecutiveDirector(Commercial)&SecretaryPlace :Mumbai,Dated :29thApril,2010

}

AUTOMOBILE CORPORATION OF GOA LIMITEDRegistered Office : Honda, Sattari, Goa - 403 530

Regd. Folio No...................................... ATTENDANCE SLIP ** Client I.D............................

** D.P. I.D...............................

30th Annual General Meeting - 7th August, 2010I certify that I am a member/proxy for the member of the Company.

I hereby record my presence at the 30th Annual General Meeting of the Company held on Saturday the 7th August, 2010 at 12.30 pm at the Registered Office at Honda Sattari, Goa - 403 530.

________________________________________ ________________________________________ * Member’s / Proxy’s Name in Block Letters * Member’s/Proxy’s Signature

Note :1. Member/Proxy must bring the Attendance Slip to the Meeting and hand it over, duly signed, at the registration counter.2. The Copy of the Notice may please be brought to the Meeting Hall.* Strike out whichever is not applicable.

________________________________________________ Tear Here ________________________________________________

AUTOMOBILE CORPORATION OF GOA LIMITEDRegistered Office : Honda, Sattari, Goa - 403 530

Regd. Folio No...................................... PROXY FORM ** Client I.D............................

No. of shares held ......................................... ** D.P. I.D...............................

I/We ..........................................................................................................................................................................................................

of ..............................................................................................................................................................................................................

being a member/members of AUTOMOBILE CORPORATION OF GOA LIMITED, hereby appoint .....................................................

..................................................................................................................................... of ........................................................................

or failing him/her ......................................................................................................................................................................................

of...............................................................................................................................................................................................................

as my/our Proxy to attend and vote for me/us and on my/our behalf at the 30th Annual General Meeting of the Company to be held on Saturday the 7th August, 2010 at 12.30 pm at the Registered Office at Honda Sattari, Goa - 403 530 or at any adjournment thereof.

Signed this .............................................................. day of ............................................................................................................ 2010.

Note :-1. Proxy need not be a member2. Proxy form, complete in all respects, should reach

the Company’s Regd. Off ice at Honda, Sattar i , Goa - 403 530 not less than 48 hours before the scheduled time of the meeting.

** Applicable only in case of investors holding shares in Electronic form.

SIGNATuRE

Affix

Revenue

Stamp

Contents

Notice.................................................................................................. 02

Directors' Report ................................................................................ 07

Management Discussion and Analysis............................................ 12

Corporate Governance Report....................................................... 17

Auditors' Report.................................................................................. 28

Balance Sheet.................................................................................... 32


Cash Flow Statement......................................................................... 34

Schedules to Accounts...................................................................... 36

Significant Accounting Policies......................................................... 44

Notes on Accounts ............................................................................ 47



Contents

Notice.................................................................................................. 02

Directors' Report ................................................................................ 07

Management Discussion and Analysis............................................ 12

Corporate Governance Report....................................................... 17

Auditors' Report.................................................................................. 28

Balance Sheet.................................................................................... 32


Cash Flow Statement......................................................................... 34

Schedules to Accounts...................................................................... 36

Significant Accounting Policies......................................................... 44

Notes on Accounts ............................................................................ 47



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Annual Report 2009-10

Documents

New Cover Page · AUTOMOBILE CORPORATION OF GOA LIMITED Thirtieth annual report 2009-10 2 N O T I C E NOTICE is hereby given that the 30th Annual General Meeting of the Members of