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Directors Report of Automobile Corporation Of Goa Ltd.

Mar 31, 2015

Dear Members,

Board of Directors of your company has great pleasure in presenting to you their 35th Annual Report and the audited statement of accounts for the year ended March 31, 2015.

FINANCIAL PERFORMANCE SUMMARY Rs. in Lakhs

A. FINANCIAL RESULTS 2014/15 2013/14

Net Sales 39,500.54 30,297.95

Total Expenditure 37,685.83 27,888.50

Operating profit 1,814.71 2,409.45

Other Income 708.90 808.67

Earnings before Finance Cost, Tax, Depreciation and Amortization 2,523.61 3,218.12

Finance Cost 33.15 19.75

Cash Profit 2,490.46 3,198.37

Provision for Depreciation & Amortization 129.63 539.56

Profit before Tax 2,360.83 2,658.81

Provision for Tax (net) 834.98 910.87

Profit after Tax 1,525.85 1,747.94

Balance in Profit & Loss A/c brought forward from the previous year 6,903.98 6,457.79

Profit available for appropriation 8,429.83 8,205.73

B. APPROPRIATIONS

Equity Dividend

Interim 160.54 160.54

Final 802.70 802.70

Corporate Dividend tax 192.62 163.71

Transfer to General Reserve 152.60 174.80

Balance carried to Balance Sheet 7,121.37 6,903.98

Ashiyana Autobodies Private Limited has ceased to be an associate of the Company effective December 5, 2014.

DIVIDEND

The Company has paid an Interim Dividend of 25 % (Rs. 2.50 per Equity Share) to the shareholders on February 12, 2015.

The Board of Directors has recommended a Final Dividend of 125% (Rs. 12.50 per Equity Share) to the Equity shareholders. Thus, the aggregate dividend for the year works out to 150% (Rs. 15/- per Equity share).

The said dividend, if approved by the members, would involved a cash outflow of Rs. 963.24 lakhs which together with the interim dividend of Rs. 192.64 lakhs (both inclusive of Dividend Distribution Tax) and result in a payout of 76 % of the profit (Previous year 65%).

OPERATIONS

The bus segment has maintained its dominance in contributing to your company's revenue and profit. Proportion of bus division's revenue in total revenue of the company clocked 83% during the year under review. Large portion of our workforce is operating in the bus segment at Goa. Operations at the pressings division though under pressure improved appreciably by 24% as compared to last year.

Your Company's gross sales for the year 2014-15 crossed the key milestone of Rs. 395 crores, reflecting a growth of 30.37% over the previous year. The Company's profit before tax during the year was at Rs. 23.61 crores as against Rs. 26.59 crores. Net profit after tax stood at Rs. 15.26 crores as compared to Rs. 17.48 crores in the preceding financial year. During FY 2014-15, Your Company has manufactured second highest number of 4591 buses so far manufactured in any financial year as compared to 4822 buses in FY 2010-11.

Operations of the company and business overview have been discussed in more detail in the Management Discussion and Analysis forming part of this report.

Bus Body Segment

Revenue from Bus Segment increased by 31.69% to Rs. 336.94 crores as compared to Rs. 255.86 crores in FY 2013-14. As compared to 3523 buses built during 2013-14, number of buses sold during the year under review was 4591; that is, 1068 buses higher than the previous year. This is the second highest number of buses so far manufactured in any financial year as compared to 4822 buses in FY 2010-11. Out of the 4591 buses manufactured during the year under consideration, 2842 buses were for export application which was higher by 45% as compared to last year.

Pressings Segment

Sheet metal business is in sync with the automobile industry and is dependent on the progress of the same. The segment is necessarily capital intensive which is presently having over capacity with respect to current industry demand. With a marginal improvement in the industry, Sheet Metal business also improved during the given financial year. Revenue (exclusive of miscellaneous income) from this segment has shown sizable increase from Rs. 46.78 crores (2013-14), to Rs. 57.97 crores with a growth of 24% in the given financial year; however, it still continues to be underutilized.

Your Company is making all the efforts to strike a balance between the present capacity of sheet metal business and the business that could be obtained from the industry.

Share of pressings business in the overall revenue of the company has decreased marginally from 15.45% in FY 2013-14 to 14.68 % in FY 2014-15.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The company's innovative human resource management strategies supported its business growth in a challenging environment. The focus has been to create an environment where performance is rewarded, individuals are respected and employees get opportunities to realise their potential.

As a result of ongoing endeavour of rationalising and rightsizing the workforce, the employee strength came down to 576 as on March 31, 2015 against 580 on March 31, 2014 and this effort will continue in the coming years.

Three-year wage settlement with the bargainable employees has ended on March 31, 2015. Negotiations with the Unions have started in the month of March 2015. Industrial relations with staff and workmen across the plants at Goa, Jejuri and Dharwad continued to be cordial.

CORPORATE SOCIAL RESPONSIBILITY

The key focus areas of ACGL's CSR programs are women empowerment, support of the differently abled, education, public health and environment. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.

Brief outline of the CSR Policy:

In ACGL, Corporate Social Responsibility (CSR) philosophy revolves around engagements in socially relevant activities for the under-privileged sections of the society. The Company believes in inclusive growth to facilitate creation of a value-based and empowered society through continuous and purposeful engagement of society around. Our commitment to CSR is focused on initiatives that make a constructive contribution to the community and encourage sustainable development.

A policy on CSR has been formulated by the Corporate Social Responsibility Committee (CSR Committee) and adopted by the Board of Directors at its meeting held on March 16, 2015. The contents of this policy are available on the website of the Company.

Your Company is committed to allocate at least 2% of its average Net Profits made during the three immediately preceding financial years calculated in accordance with the provisions of the Act and the Rules made thereunder towards Corporate Social Responsibility projects. The Company would undertake one or more of the activities which relate to schedule VII of the Act as its projects for CSR activities.

Composition of the Committee:

As per Section 135 (1) of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee. The composition of the Committee as on date is as under:

Mr S V Salgaocar Chairman

Mr P F X D'Lima Member

Mr Steven Pinto Member

Dr Vaijayanti Pandit Member

Mr O V Ajay Member

The Annual Report on CSR activities for FY 2014-15 is annexed as "Annexure A".

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with Bombay Stock Exchange, a separate section on Corporate Governance forming part of the Directors' Report and Auditors' certificate regarding compliance of conditions of Corporate Governance have been included in the Annual Report.

FINANCE

Borrowings of the company in the form of Cash Credits as at end March, 2015 stood at Rs. 352.83 lakhs (previous year Rs. 246.74 lakhs). Cash and bank balance stood at Rs. 167.25 lakhs (previous year Rs. 350.35 lakhs).

As the members are aware, Rs. 7,039.08 lakhs were raised through right issue of shares in 2007 out of which a sum of Rs. 98.08 lakhs was incurred towards the expenditure for the issue. The company has utilized the unspent Right issue money in the most diligent and careful manner. The objective being to make the amount invested in business more profitable. The company has deployed full proceeds raised through the rights issue for the purposes approved by the members.

DIRECTORS

At the Annual General Meeting of the Company held on June 4, 2014, the Members had approved the appointment of Mr S V Salgaocar, Mr Steven Pinto and Mr PFX D'Lima, as Independent Directors for a term of five years or until their completing 75 years of age, whichever is earlier.

The Board of Directors had on the recommendations of the Nomination and Remuneration Committee appointed the following directors during the FY 2014-15.

S. No. Name of the Director Designation

1 Mr Ravindra Pisharody Non-executive Non Independent

2 Dr Vaijayanti Pandit Non-executive Independent

Additional Director 3 Mr O V Ajay CEO & Executive Director

S. No. Name of the Director Date of Appointment Period of appointment

1 Mr Ravindra Pisharody 02.07.2014 Liable to retire by rotation

2 Dr Vaijayanti Pandit 20.10.2014 Term of 5 years Upto 19.10. 2019

16.12.2014 Upto ensuing AGM. Eligible for re-appointment 3 Mr O V Ajay 14.01.2015 Term of 3 years. Upto 13.01.2018

The Board has recommended the above appointments for the approval of the members of the Company. Attention of the members is invited to the relevant items in the Notice of the Annual General Meeting regarding appointment of Directors.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Bombay Stock Exchange. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

Mr S B Borwankar retired by rotation at the 34th Annual General Meeting (AGM) and did not seek re-election. Mr V Krishnamurthi, Managing Director of the Company retired from the services of the Company with effect from December 6, 2014. The Board has placed on record its appreciation for the outstanding contributions made by Mr S B Borwankar and Mr V Krishnamurthi during their respective tenures of office.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr Abhijit Gajendragadkar retires by rotation and is eligible for re-appointment.

Governance Guidelines:

The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director Term, Retirement Age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director Remuneration, Subsidiary oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.

Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements. The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-a-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

Criteria for Determining Qualifications, Positive Attributes and Independence of a Director:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement.

Independence: In accordance with the above criteria, a Director will be considered as an 'Independent Director' if he/she meets with the criteria for 'Independent Director' as laid down in the Act and Clause 49 of the Listing Agreement.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the 'Code for Independent Directors' as outlined in Schedule IV to the Act.

Annual Evaluation of Board Performance and Performance of its Committees and of Directors:

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

The Board's functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director/CEO/Whole Time Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

Remuneration Policy

The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.

The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered the following factors while formulating the Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company. Details of the Remuneration Policy are given in the Corporate Governance Report.

Meetings of the Board

The Meetings dates are circulated in advance to the Directors. During the year, six Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Agreement.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans, investment or guarantees or provided any security during the year as stipulated under Section 186 of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

The information required under Section 197 (12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure B".

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGOINGS:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed as "Annexure C".

AUDITORS

Statutory Auditors

M/s Deloitte Haskins & Sells LLP - Firm Registration No 117366W/W-100018 (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 2015-16. M/s Deloitte Haskins & Sells LLP have, under Section 139(1) of the Companies Act, 2013, furnished a certificate of their eligibility for re-appointment. Members are requested to consider the re-appointment of DHS and authorize the Board of Directors to fix their remuneration.

Cost Audit

Cost audit report prepared by M/s S J Karve & Associates, Cost Accountants, Pune having registration number 100687 has been submitted for the year 2013-14. This was filed with the Central Government on 20th September 2014. Cost audit for the year 2014-15 is not applicable to the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr Shivaram Bhat, a Practicing Company Secretary - Membership No. 10454 to undertake the Secretarial Audit of the Company for FY 2014-15. The Report of the Secretarial Auditor is annexed herewith as "Annexure D".

The Statutory Auditors' Report and the Secretarial Audit Report for the financial year ended March 31, 2015 do not contain any qualification, reservation, adverse remark or disclaimer.

THE EXTRACT OF THE ANNUAL RETURN FILED WITH MCA

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as "Annexure E".

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (POSH) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a whistle blower policy to deal with instances of fraud and mismanagement, if any. The details of this Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, 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 selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, 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;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were in compliance with the applicable provisions of the Companies Act, 2013 ('the Act') and the Listing Agreement.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is put in place for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: http://www.acglgoa.com. Details of the transactions with Related Parties are provided in the accompanying financial statements.

Tata Motors Limited (TML) being an "enterprise exercising significant influence" as per Accounting Standard (AS) 18 becomes a "Related Party" of the Company under Clause 49 of the Listing Agreement. The transactions with TML exceed the materiality threshold as prescribed under Clause 49. Thus, in terms of Clause 49, these contracts/arrangements/transactions with TML would require the approval of the Members by way of a Special Resolution.

Attention of the members is invited to the relevant item in the Notice of the 35th Annual General Meeting regarding approval of Related Party Transactions with TML.

The proposed RPTs are necessary, normal and incidental to business as also play a significant role in the Company's business operations. Your Directors commend the Special Resolution proposed in this regard.

RISK MANAGEMENT POLICY

The Board has laid down a clear Risk Policy to identify potential business risks and install effective mitigation processes to protect Company's assets and business risks. Risk Assessment and minimization plan are reviewed by the Risk Management Committee of the Board on a periodic basis.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report.

ACKNOWLEDGMENTS

Your Directors would like to place on record their sincere appreciation for the support and assistance extended by the Company's suppliers, bankers and business associates. Your Directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management. The Directors wish to place on record their appreciation for the support and guidance provided by its parent company, Tata Motors.

The Directors place on record their sincere thanks for the help and support received from Government of Goa and related Government and semi- Government agencies. Your Directors acknowledge the unstinted service rendered by the employees of the Company at all levels towards its overall success.

On behalf of the Board of Directors

Place : Vasco-da-Gama, Goa S. V. Salgaocar Date : June 29, 2015 Chairman


Mar 31, 2014

Dear Members,

Board of Directors of your company has great pleasure in presenting to you their 34th Annual Report and the audited statement of accounts for the year ended 31st March 2014.

FINANCIAL PERFORMANCE SUMMARY Rs. in Lakhs

A. FINANCIAL RESULTS 2013/14 2012/13

Net Sales 30,297.95 26,336.92

Total Expenditure 27,888.50 24,304.96

Operating profit 2,409.45 2,031.96

Other Income 808.67 855.14

Earnings before Finance Cost, Tax, Depreciation and Amortization 3,218.12 2887.10

Finance Cost 19.75 10.81

Cash Profit 3,198.37 2,876.29

Provision for Depreciation & Amortization 539.56 537.51

Profit before Tax 2,658.81 2,338.78

Provision for Tax (net) 910.87 775.40

Profit after Tax 1,747.94 1,563.38

Balance in Profit & Loss A/c brought forward from the previous year 6,457.79 5,988.69

Profit available for appropriation 8,205.73 7,552.08

B. APPROPRIATIONS

Equity Dividend

Interim 160.54 160.54

Final 802.70 642.16

Corporate Dividend tax 163.71 135.18

Transfer to General Reserve 174.80 156.40

Balance carried to Balance Sheet 6,903.98 6,457.79

DIVIDEND

The Company has paid an Interim Dividend of 25 % (Rs. 2.50 per Equity Share) to the shareholders on February 10,2014.

The Board of Directors has recommended a Final Dividend of 125% (Rs 12.50 per equity share) to the Equity shareholders. Thus, the aggregate dividend for the year works out to 150%. (Rs. 15 per Equity share) The said dividend, if approved by the members, would involve a cash outflow of Rs. 939.12 lakhs which together with the interim dividend of Rs. 187.83 lakhs (both inclusive of Dividend Distribution Tax) and result in a payout of 65% of the profit (Previous year 60%).

OPERATIONS

Beginning of the year saw depressed business sentiment carried over from the previous year. With no let up in the sluggish demand for commercial vehicles due to overall economic condition in the country, volatile currency and mounting inflationary pressures, it was feared that the year under review would perhaps be similar or worse than the year 2012-13. However, the management of your company rose to the occasion and left no stone unturned to show better than previous year''s results. While the company did better in the bus segment, performance of its pressings segment continued to underperform in the year under review.

Turnover of your company went up from Rs 26,337 lakhs during 2012-13 to Rs 30,298 Lakhs during the year under review. Profit before tax showed an improvement from Rs 2,339 Lakhs (2012-13) to Rs 2,659 Lakhs during 2013-14; an improvement of 14%.

Operations of the company and business overview have been discussed in more detail in the Management Discussion and Analysis forming part of this report.

Bus Body Segment

The bus body division produced and sold 3,523 buses, that is; 582 numbers more than those in the immediately preceding year, representing a growth of 20% in bus orders. This was possible mainly due to proactive action taken by the management in strengthening its internal marketing function. As a result, despite recessionary trends in the economy, your company could obtain and procure more orders for buses.

Bus body division, which commenced its operations in the year 1988 with a technical collaboration with Fuji Heavy Industries, Japan completed 25 years of operations during the year under review. Your company celebrated silver jubilee of bus body division by hosting a grand function in one of its Plants in Goa. The company launched new bus model with sheet metal front and rear face. For the first time in India, the sheet metal face would be made in galvanized iron and optionally in aluminum which are both corrosion resistant.

Pressings Segment

Reflecting a continuing recessionary trend in commercial vehicle sector, installed capacities at company''s Pressings division were under-utilised throughout the year. As compared to a turnover of Rs 59.51 crores during 2012-13, turnover of this division during the year under review was only at Rs 48.63 crores, a decline of 19%. Keeping with market trend, your management has proactively curtailed resources used at this division such as working in one shift, transfer of a few employees to bus body division, diversion of certain workforce for attending to buses sold in Poona region etc.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

ACGL recognizes people as the primary source of its competitiveness and continues to focus on people development by leveraging technology and developing a continuously learning human resource base to unleash their potential and fulfill their aspirations. Employee productivity during the financial year 2013-14 increased to Rs 52.23 lakhs turnover per employee per year as compared to Rs 45.02 lakhs during the financial year 2012-13.Your company has a robust human resource management process supported by periodic assessment and development to ensure that we have the right people to take the company forward. Our founding principles of trust, hard work and excellence in everything we do have led us to drive sustainable growth. The company continues to invest in its people to upgrade their technical capabilities and functional skill and knowledge.

Employee strength came down to 580 as on 31st March 2014 against 585 as on 31st March 2013.

Industrial relations with staff and workmen across all the plants at Goa, Jejuri and Dharwad continued to be cordial.

CORPORATE SOCIAL RESPONSIBILITY

Being an associate of Tata Motors; an organization well known for its excellent work for the society, your company also discharges its responsibility to people in the nearby villages in full earnest. It has been doing its bit for the wellbeing of the neighboring society much prior to formulation of laws and rules in this regard.

During the year under review, your company provided a cut-section model of a chassis to ITI, Honda. This will enable the students to better understand functioning of various parts of a truck / bus chassis. In addition, welding machines have been given to ITI, Honda for facilitating the students to become proficient in the welding trade. Similarly, the company has donated laptops to meritorious students of the nearby school as also uniforms to students who cannot afford the same.

In addition, your Company continued its assistance of providing emergency ambulance service to the local community, help and assistance in the Polio vaccination drive etc.

The Company also provided Implant Training / Plant visit facilities to ITI, Engineering, Management and Commerce students of various Educational Institutions.

CORPORATEGOVERNANCE

Pursuant to clause 49 of the Listing Agreement with Bombay Stock Exchange, a separate section on Corporate Governance forming part of the Directors'' Report and Auditors'' certificate regarding compliance of conditions of Corporate Governance have been included in the Annual Report.

FINANCE

Borrowings of the company in the form of Cash Credits as at end March, 2014 stood at Rs. 246.74 lakhs (previous year Rs. 378.27 lakhs). Cash and bank balance stood at Rs. 350.35 lakhs (previous year Rs. 911.82 lakhs).

As the members are aware, Rs. 7039.08 lakhs were raised through right issue of shares in 2007 out of which a sum of Rs. 98.08 lakhs was incurred towards the expenditure for the issue. The company has utilized the unspent rights issue money in the most diligent and careful manner. The objective being to make the amount invested in business more profitable.

Out of the unspent amount of the rights issue proceeds, a sum of Rs. 6,947 lakhs has been applied towards capital expenditure. With this, the company has deployed the full proceeds raised through the rights issue of shares in 2007 for the purposes approved by the members.

DIRECTORS

In accordance with the requirement of the Companies Act, 2013, independent director can hold office for a two consecutive terms of five years each. However, such independent director shall be eligible for re- appointment after the expiration of three years of ceasing to become an independent director.

Mr. S VSalgaocar, Mr. P FX D''Lima and Mr. Steven A Pinto are the Independent Directors on the Board of the Company.

Mr. Salgaocar and Mr. D''Lima are on the Board for more than five years and are eligible for reappointment as per SEBI Circular no. CIR/CFD/POLICY CELL/2/2014 dated 17.4.2014 for a further term not exceeding five years. Mr. Pinto has completed four years and shall hold office for a term up to five consecutive years on the Board of a company and shall be eligible for re-appointment for another term of five consecutive years on passing of a special resolution by the members.

Mr. Salgaocar, Mr. D''Lima and Mr. Pinto are eligible for re-appointment in the ensuing Annual General Meeting.

Mr. S B Borwankar, a Director of the Company since July 2012, who retires by rotation at the ensuing Annual General Meeting has conveyed his decision not to offer himself for re-appointment. The Directors place on record their appreciation of the contribution made by Mr. Borwankar during his tenure as Director of the Company.

Attention of the members is invited to the relevant items in the Notice of the Annual General Meeting regarding appointment of Directors.

PARTICULARS OF EMPLOYEES

Information required under Section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors'' Report for the year ended March 31,2014, is given as an Annexure 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

M/s Deloitte Haskins & Sells LLP, 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 2014-15. M/s Deloitte Haskins & Sells LLP have, under Section 139(l)of the Companies Act, 2013, furnished a Certificate of their eligibility for re-appointment.

COSTAUDIT

Cost audit has become applicable in respect of products manufactured by your company with effect from financial year 2012-13 and onwards. Accordingly, cost audit report prepared by M/s S J Karve & Associates, Cost Accountants, Pune having registration number 100687 has been submitted for the year 2012-13. This was filed with the central government on IT August 2013.

The Cost Auditor had reported that proper cost records, as per Companies (Cost Accounting Records) Rules 2011 prescribed under clause (d) of sub section (1) of section 209 of the Companies Act, 1956, have been maintained by the company so as to give true and fair view of the cost of production, cost of sales and margin of the product groups under reference. In the opinion of the Cost Auditor, the said books and records give information required by the Companies Act, 1956, in the manner so required and the same are in conformity with the cost accounting standards issued by the Institute of Cost Accountants of India, to the extent these are found to be relevant and applicable. Cost audit for the year 2013-14 is in progress.

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, selected the accounting policies 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

Your Directors would like to place on record their sincere appreciation for the support and assistance extended by the Company''s suppliers, bankers and business associates. Your Directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management. The Directors wish to place on record their appreciation for the support and guidance provided by its parent company, Tata Motors.

The Directors place on record their sincere thanks for the help and support received from Government of Goa and related Government and semi- Government agencies. Your Directors acknowledge the unstinted service rendered by the employees of the Company at all levels towards its overall success.

On behalf of the Board of Directors

Place: New York, USA S. V. Salgaoct

Date : May 7, 2014 Chairman


Mar 31, 2013

Dear Members,

The Board of Directors have great pleasure in presenting 33rd Annual Report on the business and operations of your Company together with audited statement of accounts for the year ended March 31, 2013.

FINANCIAL PERFORMANCE SUMMARY Rs.in Lakhs

2012/13 2011/12

A. FINANCIAL RESULTS

Net Sales 26,336.92 33,273.67

Total Expenditure 24,304.96 29,942.14

Operating profit 2,031.96 3,313.53

Other Income 855.14 833.12

Earnings before Finance Cost, Tax,

Depreciation and Amortization 2,887.10 4,146.65

Finance Cost 10.81 13.52

Cash Profit 2,876.29 4,151.13

Provision for Depreciation & Amortization 537.51 473.44

Profit before Tax 2,338.78 3,677.69

Provision for Tax (net) 775.40 1,194.80

Profit after Tax 1,563.38 2,482.89

Balance in Profit & Loss A/c brought forward from the previous year 5,988.69 4,873.61

Profit available for appropriation 7,552.08 7,356.50



B. APPROPRIATIONS

Equity Dividend

Interim 160.54 160.54

Final 642.16 802.70

Corporate Dividend tax 135.18 156.26

Transfer to General Reserve 156.40 248.30

Balance carried to Balance Sheet 6,457.79 5,988.70

DIVIDEND

The Company has paid an interim dividend of 25% (Rs. 2.50 per share) during the year. The Board has recommended a final dividend of 100% (Rs. 10.00 per share) to the Equity Shareholders. Thus, the aggregate dividend for the year 2012-13 works out to 125% (Rs. 12.50 per share). The said dividend, if approved by the Members, would involve a cash outflow of Rs. 642.16 lakhs, which together with the interim dividend of Rs. 160.54 lakhs (both exclusive of dividend distribution tax) resulting in a payout of 51% of the profit (previous year: 39%).

OPERATIONS

Company''s business during 2012-13 was adversely affected due to the recessive trend in the global economy. This considerably brought down orders for company''s products and thereby reflected in the company''s turnover falling down from Rs. 33,274 lakhs in the previous year to Rs. 26,337 lakhs in the year under review. There was a decline in the business of both bus as well as pressings segments of the company. Workers'' three-yearly wage agreement ended on March 2012 and new agreement effective upto March 2015 was negotiated and signed with the unions in the most cordial manner and well in

As a result, profit before tax declined from Rs. 3,678 lakhs reported in the previous year to Rs. 2,339 lakhs in 2012-13. While operations of the company and business overview have been discussed in more detail in the Management Discussion and Analysis forming part of this report, the management took a number of proactive steps to restrict this trend.

During the period of low volumes in the year under review, your company took various proactive actions to prepare for handling larger volume of bus production. The company utilized time to modify and update Plant I at Goa by repairing, rationalizing work-stations and improving workflow so as to quickly respond to the demand for higher level of production of buses that may be necessary in the near future.

Bus Body Segment

From the highest number of buses 4,822 sold during 2010-11, the number declined to 3,937 in 2011-12 and further to 2,941 in the year under review. Decline with respect to previous year was to the extent of almost one thousand buses representing a drop of 25%. Funds available with potential customers in India as well as the Middle East markets were restricted due to which the company received less orders. Under the circumstances, company''s in-house marketing department put in excellent efforts in securing orders from private fleet operators as well as state transport undertakings.

Pressings Segment

Off-take of pressed components and assemblies were drastically reduced by company''s customers who are Original Equipment Manufacturers of engines, commercial vehicles etc. This was a result of the OEM''s business itself declining due to fall in demand for their products. Company''s marketing department has been focusing on adding new customers / products for this segment.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The Company is fortunate to have multi-skilled manpower which is flexible enough to adjust to the changing business needs of the Company. Your company focuses on productivity improvement of its workforce. Relations with Company''s employees at all levels remained cordial during the year; the Company recognizes its employees as its valuable asset.

As at end-March 2013, the Company had 585 employees including those in bargainable and non-bargainable categories.

The Company has a compensation structure of salary which includes both fixed and variable portion. Variable part of the salary depends upon performance of the Company as a whole as also that of the individual employee.

CORPORATE GOVERNANCE

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

FINANCE

Borrowings of the Company in the form of Cash Credits as at end-March, 2013 stood at Rs. 378.27 lakhs (previous year Rs. 324.29 lakhs). Cash and Bank Balance stood at Rs. 911.82 lakhs (previous year Rs. 181.87 lakhs).

As the members are aware, Rs. 7,039.08 lakhs were raised through a rights issue of shares in 2007 out of which a sum of Rs. 92.08 lakhs was incurred towards the expenditure for the issue. The Company has utilized the unspent rights issue money in the most diligent & careful manner. The objective being to make the amount invested in business more profitable.

Out of the unspent amount of the rights issue proceeds, a sum of Rs. 5,991.32 lakhs has been applied towards capital expenditure and the balance amount (Rs. 955.68 lakhs) has been held in the form of inter-corporate deposits.

DIRECTORS

Mr P M Telang & Mr. C Ramakrishnan relinquished office on 28th July, 2012 and 26th February, 2013 respectively.

Mr P M Telang

Mr Telang guided your company for many years of its development and continued his interest in its operations even after his additional pre-occupation as the Managing Director of Tata Motors. The company owes a debt of gratitude to him for its development over the years and his keen interest in the stabilization of present operations and diversification into new business like ambulance, sleeper coach, new pressing components etc.

Mr C Ramakrishnan

A professional of high standards is a master in financial matters. He was adjudged as the Rs.Best CFO of the year 2011-12'' for being an excellent change- agent and for his enormous and in-depth knowledge in the field of finance. Mr C Ramakrishnan has been a soft-spoken gentleman who was an asset for ACGL. Understanding the difficulties of ACGL in obtaining orders, Mr C Ramakrishnan used his good offices in creating sufficient awareness within Tata Motors.

The Board of Directors wishes to place on record its deep appreciation of the valued contribution and guidance extended by Mr. P M Telang in Company''s growth over a decade and by Mr C Ramakrishnan since August 2010. The company is confident of having the benefit of Mr C Ramkrishnan''s experience and support through Mr A A Gajendragadkar.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr S V Salgaocar will retire by rotation and is eligible for re-appointment in the ensuing Annual General Meeting.

Attention of the members is invited to the relevant items in the Notice of the Annual General Meeting regarding appointment/reappointment of Directors.

PARTICULARS OF EMPLOYEES

Information required under Section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors'' Report for the year ended March 31, 2013 is given as an Annexure to this report.

CORPORATE SOCIAL RESPONSIBILITY

ACGL''s approach to community has always been holistic and long term. During the year under review, the Company has undertaken few educational initiatives. Considering the importance of computer & IT knowledge of the students, the Company distributed laptops to the meritorious students of 12th standard and 10th standard of a School situated in the near vicinity. The Company also distributed uniforms to the students of a Government Primary School situated in the near vicinity.

Your company has been allocating Rs. 20 lakhs per annum towards discharging its social responsibility of helping the community from where it operates. A number of projects such as construction of classrooms, sanitary facilities for the villagers, tree plantations, welding machines, cut-section models of vehicle and its aggregates for the benefit of the students of industrial training institutes etc have been implemented or are in the process of implementation.

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

M/s 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 accounts of the Company for the financial year 2013-14. DHS have, under Section 224(1) of the Companies Act, 1956 furnished a certificate of their eligibility for re-appointment.

COST AUDIT

Pursuant to Order No.52/26/CAB/2010 dated 24.01.2012 issued by the Govt. of India, Ministry of Corporate Affairs, Cost Audit Branch and Section 233B of the Companies Act, 1956, cost audit was applicable in respect of products manufactured by the Company for the Financial Year 2012-13.

The Company appointed M/s S J Karve & Associates, Cost Accountants, Pune having Registration No 100687 with due approval of the Central Government to audit Cost Accounts of the Company for the Financial Year ending on March 31, 2013.

he due date for filing the Cost Audit Report is 27th September, 2013. The Company shall be filing the said report before the given due date. The Cost Audit for the Financial Year 2011-12 was not applicable to the Company.

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

ii. they have, in 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 maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities;

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

ACKNOWLEDGEMENTS

Your Directors express their gratitude for the whole-hearted assistance and persistent co-operation received from Government of Goa and the Governmental & Semi-Government authorities, Bankers, Shareholders, Investors and Vendors. Special mention must be made of our customers, who have reposed their faith in the Company''s products and have continued their patronage over the years.

Your Directors place on record their sincere appreciation for the continuous support and sustained efforts put in by the employees of the Company at all levels through their hard work, sense of belonging and sheer dedication.

On behalf of the Board of Directors

Sd/-

Place : New York, USA S. V. Salgaocar

Date : June 3, 2013

Chairman


Mar 31, 2012

The Board of Directors have great pleasure in presenting 32nd Annual Report on the business and operations of your Company together with audited statement of accounts for the year ended March 31, 2012.

FINANCIAL PERFORMANCE SUMMARY

Rs. in Lakhs

A. FINANCIAL RESULTS 2011/12 2010/11

Net Sales 33,273.67 37,066.94

Total Expenditure 29,942.14 33,083.31

Operating profit 3,313.53 3,983.63

Other Income 833.12 532.91

Earnings before Finance Cost, Tax, Depreciation and Amortization 4,164.65 4,516.54

Finance Cost 13.52 27.60

Cash Profit 4,151.13 4,488.94

Provision for Depreciation & Amortization 473.44 462.74

Profit before Tax 3,677.69 4,026.20

Provision for Tax (net) 1,194.80 1,298.23

Profit after Tax 2,482.89 2,727.97

Balance in Profit & Loss A/c brought forward from the previous year 4,873.61 3,541.67

Profit available for appropriation 7,356.50 6,269.63

B. APPROPRIATIONS

Equity Dividend

Interim 160.54 160.54

Final 802.70 802.70

Corporate Dividend tax 156.26 159.98

Transfer to General Reserve 248.30 272.80

Balance carried to Balance Sheet 5,988.70 4,873.61

DIVIDEND

The Company has paid an interim dividend of 25% (Rs 2.50 per share) during the year. Considering excellent results, the Directors are pleased to recommend a final dividend of 125% (Rs 12.50 per share). Thus, the aggregate dividend for the year 2011-12 works out to 150% (Rs 15 per share). The said dividend, if approved by the Members, would involve a cash outflow of Rs 802.70 lakhs, which, together with the interim dividend of Rs. 160.54 lakhs (both exclusive of dividend distribution tax) resulting in a payout of 39% of the profit (previous year : 35%).

OPERATIONS

Operational working of the Company, in detail, is discussed in the Management Discussion and Analysis forming part of this Report. Turnover of the Company showed a marginal decline of 9.29% over that achieved in the previous year. As against Rs 37,599.85 lakhs achieved in 2010-11, turnover of the Company during 2011-12 was Rs 34,106.79 lakhs. While the Pressings Segment showed an increase in the turnover of 16%, there was an equal decline in the turnover from Bus Segment compared to the respective turnover of the segments in the preceding year. The Bus segment was affected mainly due to shrinkage of volumes from our traditional markets i.e. the Gulf countries. Further, some of the bus business of these countries has also gone to countries other than India perhaps due to reasons of cost-competitiveness, attractive pricing etc. The Management is watching the trends in the overseas markets and expects to get better volumes in the year 2012-13.

Profit before tax for the year under review was Rs 3,677.69 lakhs as against Rs 4,026.20 lakhs in 2010-11, showing a marginal decline of 8.66%.

BUS BODY SEGMENT

Number of buses sold during the year was 3,937 as against 4,826 during the previous year; a drop of 18%. The reduction was mainly on account of decline in the overseas markets especially the Gulf countries. However, with the proactive steps initiated by the Management, the Company could contain the impact on profitability.

Focus on domestic markets by Company's own Marketing Department has yielded good results during the year. During the year, ACGL's own domestic business stood at 1,023 buses; up by 50% as compared to previous year's performance.

PRESSINGS SEGMENT

This segment saw a phenomenal growth during the year. Turnover crossed Rs 7,721 lakhs; the same was higher by over Rs 1,059 lakhs. The improvement was 16% as compared to the year 2010-11.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The Company is fortunate to have multi-skilled manpower and which is flexible enough to adjust to the changing business needs of the Company. Relations with Company's employees at all levels remained cordial during the year; the Company recognizes its employees as its valuable asset.

As at end-March 2012, the Company had 602 employees including bargainable and non-bargainable categories. During the year under review, a few employees from Goa Unit were relocated at Jejuri Plant consequent to shifting of Pressings business there. Feedback on their deputation to Jejuri has been encouraging.

The Company has a compensation structure of salary which includes both fixed and variable portion. Variable part of the salary depends upon performance of the Company as a whole as also that of the individual employee.

Three-year wage settlement with the bargainable employees has ended at March 2012. Negotiations with the Unions were held during April-May'12 and agreements - valid for a period of three years upto March 2015 - were signed in a very cordial and jubilant atmosphere. This is a record in the history of ACGL not only in terms of the short time duration that it has taken for settlement but also in terms of the direct and indirect benefits that all the Associates would be entitled to.

CORPORATE GOVERNANCE

A separate section on Corporate Governance, forming part of Directors' Report and certificate from the Company's Auditors confirming compliance with the 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

Borrowings of the Company as at end-March, 2012 stood at Rs 324.29 lakhs (previous year Rs 381.62 lakhs). Cash and Bank Balance stood at Rs 181.87 lakhs (previous year Rs 2,596.33 lakhs).

As the members are aware, Rs 7,039.08 lakhs were raised through a rights issue of shares in 2007 out of which a sum of Rs 92.08 lakhs was incurred towards the expenditure for the issue. The Company has utilized the unspent rights issue money in the most diligent & careful manner. The objective being to make the amount invested in business more profitable.

Out of the unspent amount of the rights issue proceeds, a sum of Rs 4,883.70 lakhs has been applied towards capital expenditure and the balance amount has been held in the form of Inter-Corporate Deposits.

DIRECTORS

Mr Ananth Prabhu, Executive Director & Company Secretary retired from office on 24th August, 2011. Mr Prabhu had joined the Company in 1982 and during his long career, was assigned various responsibilities in Materials & Purchase, Sales and other commercial functions in addition to his responsibilities as the Company Secretary. On March 21, 2001 he was appointed as whole-time director.

The Directors place on record their sincere appreciation of the valued contribution made by Mr Prabhu during his long association with 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. Steven Pinto retire by rotation and are eligible for re-appointment in the ensuing Annual General Meeting.

Attention of the members is invited to the relevant items in the Notice of the Annual General Meeting seeking re-appointment of Mr P. M. Telang and Mr. Steven Pinto.

PARTICULARS OF EMPLOYEES

Information required under Section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors' Report for the year ended March 31, 2012 is given as an Annexure 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

M/s 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 accounts of the Company for the financial year 2012-13. DHS 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 preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have, in 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 maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities;

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

ACKNOWLEDGEMENTS

Your Directors express their gratitude for the whole-hearted assistance and persistent co-operation received from Government of Goa and the Governmental & Semi-Government authorities, Bankers, Shareholders, Investors and Vendors. Special mention must be made of our customers, who have reposed their faith in the Company's products and have continued their patronage over the years.

Your Directors place on record their sincere appreciation for the continuous support, and sustained efforts put in by the employees of the Company at all levels through their hard work, sense of belonging and sheer dedication.

On behalf of the Board of Directors

S. V. Salgaocar

Chairman Place : Vasco-da-Gama, Goa.

Date :May 11, 2012


Mar 31, 2011

The Directors have great pleasure in presenting their 31st Annual Report and the audited statement of accounts for the year ended 31st March 2011.

Financial Results 2010/11 2009/10 (Rupees in Lakhs)

Net Sales 36,986.62 23,335.89

Total Expenditure 33,083.31 23,724.33

Operating profit / (loss) 3,903.31 (388.44)

Other Income 613.23 464.47

Earnings before Interest, Tax, Depreciation and Amortization 4516.54 76.03

Interest 14.08 25.11

Cash Profit 4,502.46 50.92

Provision for Depreciation & Amortization 462.74 422.64

Profit / (loss) before Tax 4,039.72 (371.72)

Provision for Tax (net) 1,311.76 (157.57)

Balance in Profit & Loss A/c brought forward from the previous year 3,541.67 3,830.95

Profit available for appropriation 6,269.63 3,616.80

Appropriations:

Equity Dividend Interim 160.54 -

Final 802.70 64.22

Corporate Dividend tax 159.98 10.91

Transfer to General Reserve 272.80 -

Balance carried to Balance Sheet 4,873.61 3,541.67

Dividend

In view of the excellent financial performance for the year under review, the Directors have recommended payment of Final Dividend of Rs. 12.50 per equity share (previous year Re. 1/- per share) which, together with Rs. 2.50 paid as Interim Dividend, works out to Rs. 15/- per equity share for the year 2010-11. The said dividend, if approved by the Members, would involve a cash outflow of Rs. 802.70 Lakhs, which, together with the interim dividend of Rs. 160.74 Lakhs (both exclusive of dividend distribution tax) results in a payout of 35 % of the profit (after tax).

Operations

Both the business segments of the Company showed improved results. The Company has impressively come out of the lurch caused by labour unrest and established a good benchmark of performance. Results achieved during the year have surpassed earlier best in the entire history of the Company of over 30 years.

The gross revenue for the year under review was Rs. 376 crores (Rs. 238 crores in the previous year). The profit before taxes was Rs. 40.40 crores (Rs. 3.71 crores loss in the previous year) and profit after tax was Rs. 27.28 Crores (Rs. 2.14 crores loss in the previous year)

Pressings Business Segment

The Sheet Metal Business reported a turnover of Rs. 67 crores. The Pressings business declined as against last years Rs. 71 crores. However, taking into consideration the fact of major Customer recalling their tooling as a consequence of unfortunate labour unrest which started at the end of the previous year and left its scar in the financial year, the Company has done a commendable business during the financial year under review. The demand grew slowly but continuously and the Company could capitalize on it appropriately. The last years loss of tooling is still a set back for the business segment. Efforts are continuously being made to restore the business as it can prove a good prospective source of revenue. The Management is also vigorously pursuing additional business with the other customers.

Bus Body Business Segment

2010-11 was one of the best performances in ACGL history. 4826 buses were sold during the financial year as against 2373 buses during the previous year. This growth is all the more commendable since it has been achieved in the face of steep rise in input costs and stiff competition from domestic and international market. Out of 4826 buses, 3936 buses were for export market as against 944 in the previous year whereas 890 buses were for domestic market as against 1429 in the previous year. As a strategy, the marketing department was directed to concentrate more on the domestic market. Various Proto types of buses, concept buses, ambulance, etc have newly been developed and are marketed to various customers. During the year, ACGL Marketing Department secured commendable domestic orders for 950 buses.

HRD and Industrial Relations

The Company continues to maintain harmonious and cordial industrial relations. Developing and maintaining competent resources in the organization so that goals of organization are achieved in an effective and efficient manner is the prime focus of the Company. Training needs of the 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 sharpen their skills on a regular basis.

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

Corporate Governance

A separate section on Corporate Governance forming part of Directors Report and the certificate from the Companys 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 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.351,165,673/- has been spent on Capital expenditure, the balance amount is being held in Inter Corporate Deposits as on 31st March, 2011, in line with resolution passed by the members at the AGM held on 8th August, 2009. The Management has aggressive plans to utilize the funds for expansion of Companys various Plants.

Directors

Mr. R S Thakur resigned on July 6, 2010. The Directors place on record their sincere appreciation of the contributions made by Mr. Thakur during his tenure as a Director as also as a Member of the Audit Committee and the strategic directions he provided in financial and other corporate matters.

In line with the retirement policy for Directors adopted by the Board, Mr. S M Kuvelker relinquished office on August 7, 2010. Mr. Kuvelker served as a member and later as the Chairman of the Audit Committee till his retirement. The Directors place on record their sincere appreciation of the significant contributions made by Mr. Kuvelker during his tenure as a Director.

Mr. C Ramakrishnan was appointed as an Additional Director by the Board on August 7, 2010. In accordance with the provisions of the Companies Act 1956, Mr. Ramakrishnan will cease to hold office as Additional Director at the forthcoming Annual General Meeting. The Company has received a notice in

writing from a member under Section 257 of the Companies Act, 1956, proposing Mr. C Ramakrishnans candidature for the office of Director of the Company.

The Board of Directors at the meeting held on October 18, 2010, appointed Mr. V Krishnamurthi as an Additional Director as also the Managing Director of the Company from October 18, 2010 to December 6, 2014. A proposal for the appointment of Mr. Krishnamurthi as a Director and approval of members for his appointment as the Managing Director has been included in the Notice of the Annual General meeting.

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Mr. S V Salgaocar and Mr. P F X DLima retire by rotation and are eligible for re-appointment.

Attention of the members is invited to the relevant items in the Notice of the Annual General Meeting and the Explanatory Statement thereto.

Particulars of employees

Information required under Section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended and forming part of the Directors Report for the year ended March 31, 2011, is given as an Annexure 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 2011-12. DHS 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.

Acknowledgments

The Directors sincerely acknowledge the help and support received from the Govt. of Goa and the Govt. and semi-Govt. agencies. Special mention must be made of our customers, who have reposed their faith in the Companys products and have continued their patronage over the years. The Directors also place on record the excellent co-operation received from the Bankers, vendors and other business associates. The Company has received commendable co-operation and contribution from all employees and employee unions and the Directors convey their thanks to all of them for the good performance achieved by the Company.

On behalf of the Board of Directors

S. V. Salgaocar Chairman

Place : Vasco-da-Gama, Goa

Date : 15th June, 2011.


Mar 31, 2010

The 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 32424.79

Total Expenditure 23724.33 30136.88

Operating profit / (loss) (388.44) 2287.91

Other Income 464.47 623.78

Earnings before Interest, Tax, Depreciation and Amortization 76.03 2911.70

Interest 25.11 28.62

Cash Profit 50.92 2883.08

Provision for Depreciation & Amortization 422.64 342.51

Profit / (loss) before prior period income, exceptional item and Tax (371.72) 2540.57

Prior period Income - -

Exceptional Item - 275.97

Provision for Tax (net) (157.57) 880.46

Excess provision for tax in respect of earlier years written back (net) - 9.20

Balance in Profit & Loss A/c brought forward from the previous year 3830.95 2850.97

Profit available for appropriation 3616.80 4796.25 Appropriations:

Equity Dividend 64.22 642.16

Corporate Dividend tax 10.91 109.14

Transfer to General Reserve - 214.00

Balance 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.

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 effective1st 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 Companys 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.

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. Pintos 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

 
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