Directors Report of Scooters India Ltd.

Mar 31, 2023

DIRECTORS'' REPORT

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 51^st Annual Report on
the business and operations of the Company together with the audited Balance Sheet and
statement of Profit and Loss Account and Auditors'' Report thereon for financial year
ended 31^st March, 2023. In view of the decision of GOI to shut down the operations and
close the Company vide MHI''s letter No. 3(1)/2020-PE-VI dated January 28, 2021, there
was no production & sales activity during the year under report. Accordingly, the activities
during the year under report were towards the implementation of the said decision of GOI.

1.	PRODUCTION REVIEW		(Nos.)
	Description	2021-22	2022-23
	Three-Wheeler	0	0

2. SALES REVIEW The Sales performance for the year is shown below:
Description	Physical	2021-22 Financial	Physical	2022-23 Financial
Three-Wheeler 0 Spares Petrol, Diesel, Lubricants etc. Other Operating Revenue Total		(Rs. In lakhs) 0.00 0.00 0.00 0.00 0.00	0	(Rs. In lakhs) 0.00 0.00 0.00 0.00 0.00

FINANCIAL REVIEW
The salient features of the Company''s financial results for the year		under review
are as follows:		(Rs. In lakhs)
Description a) Profit/Loss before Depreciation, Interest, Taxes,	2021-22	2022-23
Prior Year Items & Other Income.	(1302.80)	(355.60)
b) Profit/Loss before Depreciation, Interest, Taxes, &	(1302.80)	(355.60)
Other income
c) PBIDT	1316.04	629.94
d) Profit/(Loss) for the year	757.99	76.44

During the year under report:

I. Loss before depreciation, interest, taxes, prior year items & other income reduced
by Rs. 947.20 lakhs as compared to the previous year.

II. Loss before depreciation, interest, taxes, & other income decreased by Rs. 947.20
Lakhs as compared to the previous year.

III. Profit before depreciation, interest & taxes, increased by Rs. 686.10 lakhs as
compared to the previous year.

IV. Profit for the year increased by Rs. 681.55 lakhs as compared to the previous year.

4 CONTRIBUTION TO EXCHEQUER

The company has contributed a sum of Rs. 139.07 lakhs (towards duties & taxes)
to the exchequer during the period under review vis-a-vis Rs. 768.19 lakhs during
the previous financial year. Further, as per communication received from the
Income Tax Department vide letter dated March 17, 2023, the Company has
deposited amount of Rs. 14.44 Crore on April 10, 2023, with Income Tax
department.

5. DIVIDEND

In view of accumulated losses and the decision of GOI to shut down the operations
and close the Company vide MHI''s letter No. 3(1)/2020-PE-VI dated 28/01/2021,
the Directors did not recommend any dividend for the Financial Year 2022-23.

6. TRANSFER TO RESERVES

In view of the losses, the Company does not propose to transfer to the general
reserves out of the amount available for apportion.

7. ISSUE OF SHARES WITH OR WITHOUT DIFFERENTIAL RIGHT, SWEAT EQUITY,
ESOP:

The Company has not issued any share with differential right, sweat equity,
employee stock option during the year, hence, not applicable.

8. EXPORT

The export during the year was NIL.

9. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:

Expenditure on account of advertisement and publicity was NIL in the year.

10. STATUS OF REPAYMENT OF LOAN FROM GOI

The Government of India, Ministry of Heavy Industries, released funds by way of
interest free plan loan amounting to Rs. 2000.00 lakhs during the financial year
2013-14 for working capital under an approved revival package of Scooters India
Limited by Cabinet/ Misc. Application approved by BIFR. As per sanction
23.7.2013/BIFR order the loan was repayable in 5 installments commencing from
23.7.2016 onwards i.e. 3 years from date of sanctioning i.e. beginning w.e.f.
23.7.2016. In accordance with the Board''s decision in their meeting held on 8th
April 2016 and in the background of letter F.No. 3(15)/2013-PE-VI dated 5th March
2015, the interest on CAPEX funds temporarily deployed as FDR remitted to
Government of India in April 2014 amounting to Rs. 128.11 lakhs were adjusted
against the installment of Rs. 400.00 lakhs due on 23rd July 2016. Accordingly,
principal of Rs 1600 lacs is outstanding.

Further, vide MHI''s letter No. 3(1)/2020-PE-VI dated 28/01/2021, the GOI
sanctioned a loan of Rs. 65 crores, out of which a loan of Rs 41 crore was
disbursed on 28.03.2021 for VRS/vSs scheme of employees and other vendor
payments. As per the terms, the proceeds likely to be received in due course from
the sale of movable assets, and Sale of Brands and trademark funds, remaining
available after meeting its obligations and delisting payouts, will be used to pay
back the earlier outstanding Interest-Free loan of Rs. 16 Crore from GOI and the
loan with Interest of Rs. 65.12 crore (out of sanctioned loan of Rs. 65.12 Crore GOI
has disbursed Rs. 41 Crore).

11. STATUS OF CLOSURE OF THE COMPANY:

a) VRS/ VSS to employees: In terms of the communication vide letter no. F. No.
3(1)/2020-PE-VI dated 28.01.2021 from MHI, all regular employees had been
released pursuant to VRS/VSS and effective from 29.04.2021, the regular
strength of the Company is NIL.

b) Disposal of movable assets (Other than Brands): In terms of the
communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 from
MHI, E-auction of all movable assets has been completed during 2022-23
through MSTC Ltd.

c) Disposal of Intangible assets (Brands): In terms of the communication vide
letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 from MHI, the E-auction of
Lambretta & Lambro brand has been completed during 2022-23 and disposal of
Vikram and Vijay Super Trademarks is in process.

d) Return of Leasehold land: In terms of approval granted by the Ministry of
Heavy Industries (MHI), Government of India vide letter dated 21.10.2022,
147.49 acres of leasehold land along with building/ trees situated at Sarojini
Nagar on "as and where basis" has been transferred to UPSIDA (Uttar Pradesh
State Industrial Development Authority) Govt of Uttar Pradesh on 01.12.2022.

e) Settlement of Creditors: The Company has made a publication on June 04,
2022, in Economic Times (New Delhi/Gurgaon, Ahmedabad, Bangalore,
Chandigarh, Chennai, Kolkata, Mumbai, Hyderabad, Pune, Jaipur & Lucknow)
and on June 09, 2022, in Dainik Jagran (Lucknow, Kanpur, Gorakhpur, Varanasi,
Meerut, Jhansi, Agra, Bareilly, Prayagraj, Moradabad, Aligarh, New Delhi,
Dehradun, Haldwani, Hisar, Panipat, Dharamshala, Jalandhar, Ludhiana,
Amritsar, Bathinda/Malwa, Chandigarh, Jammu, Patna, Bhagalpur, Ranchi,
Dhanbad, Jamshedpur, & Siliguri), to communicate that the Company is in
process of closure and any person having dues receivables from the Company,
may reach out to the Company with supporting documents for their claims. The
Company has made settlement/payment of all legitimate claims received so far.
Unpaid/unclaimed dues, if any shall be written off in due course of time, as per
applicable provisions of law.

f) Settlement of Tax dues:

i. Direct Tax: As per letter received from the Ministry of Finance dated
17.03.2023, total outstanding income tax liability of Rs. 14.44 crores
on the company have been discharged/ paid on 10/04/2023. After
payment of the pending dues the Company is pursuing for issuance of
nOc, however the same is still awaited.

ii. Indirect Tax:

a. Service Tax: All Cases have been Closed and the Company
is making regular follow up with the concerned department
for issuance of NOC at the earliest. However, the same is
pending.

b. Vat/ Sales Tax/Entry Tax: All Cases have been Closed and
the Company is making regular follow up with the concerned
department for issuance of NOC at the earliest. However, the
same is pending.

g) Legal Cases: The Company is pursuing the legal cases for early disposal.

h) Closure of PF Trust: The Company has made payment in respect of 364
employees out of 485 employees, in respect of whom legitimate claims had been
received. PF Trust Audit has been completed till 31/03/2023 and Audit reports,
relevant schedules and Trust hand over request has been submitted to Regional
EPFO, Lucknow. The Company is in process of the Hand Over of the PF Trust.

12 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 01.04.2023 TO
DATE

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated
28.01.2021 from MHI, the operations of the Company had been stopped and the
process for closure of SIL has been initiated. In terms of the said communication all
regular employees had been released and from 29.04.2021, the regular strength of
the company is NIL. The Company has ceased to be a going concern and
necessary steps as per the said communications are being implemented.

Voluntary Delisting of Equity shares:

a) The Company is a PSU incorporated under the Companies Act, 1956, having
paid-up share capital of INR 87,27,38,188/- (Rupees Eighty-Seven Crore
Twenty-Seven Lakh Thirty-Eight Thousand One Hundred and Eighty-Eight
Only) divided into 8,72,72,255 (Eight Crore Seventy-Two Lakh Seventy-Two
Thousand Two Hundred Fifty-Five) Equity Shares of the Face Value of Rs 10/-
each. The Equity Shares of the company are listed on BSE.

b) Since the Company is a PSU, so the President of India through the Ministry of
Heavy Industries, Government of India, New Delhi, is the Promoter of the
Company.

c) The GOI, Ministry of Heavy Industries, New Delhi vide letter no. F. No.
3(1)/2020-PE-VI, dated January 28, 2021, communicated its decision for
shutting down the operations of the plant/unit of the Company and closure of
the Company. Further, the said letter by GOI also mentioned that before the
closure of the Company under section 248(2) of the Companies Act, 2013, the
Equity Shares of the Company are required to be delisted from the Stock
Exchange and Equity Shares with the public are to be acquired and payout to
be made to the public shareholders by Government of India, as per the
procedure prescribed in Delisting Regulations.

d) In furtherance to the same, the Company has ceased to be a going concern
and necessary steps as per the aforementioned letter have been initiated.

e) In terms of the decision taken by MHI, the Company has to be dissolved
pursuant to the provisions of section 248(2) of the Companies Act, 2013.

f) The Company has a Paid-up Capital of INR 87,27,38,188, divided into
8,72,72,255 Equity Shares with a Face Value of Rs 10/- each. The Promoters''
Shareholding in the Company is 93.87% and the public holding is merely
6.13%. There is very minuscule trading in the shares of the Company and no
benefit is being derived by the virtue of being listed on BSE Limited. The
Equity Shares of the Company are presently infrequently traded, with merely
0.66% trading during the last 12 months.

g) Given the limited liquidity of the Equity Shares on the stock exchange, the
proposed delisting will provide the public shareholders with an opportunity to
exit from the Company at a price determined in accordance with the Delisting
Regulations.

h) In this regard, Mr. Amit Shrivastav, Chairman & Managing Director of the
Company has been authorized by the President of India (“Acquirer”) to do the
needful on the Acquirer''s behalf for the proposed voluntary delisting.

i) The Acquirer expressed intentions to make a delisting offer to acquire up to
53,48,226 Equity Shares representing 6.13% of the paid-up equity share
capital of the Company from the Public Shareholders pursuant to Chapter VI
of the Delisting Regulations.

j) Accordingly, the Company floated a tender on July 05, 2021, for the
appointment of a Merchant Banker for the proposed delisting offer. In
accordance with the above and as per the provisions of Regulation 9 of the
Delisting Regulations, the Acquirer appointed Corporate Professionals Capital
Private Limited to act as Merchant Banker to the proposed Delisting offer vide
letter of engagement dated May 02, 2023.

k) The CMD, on behalf of the Acquirer vide letter dated May 03, 2023, has inter
alia expressed the intention to voluntarily delist the Equity Shares of the
Company in accordance with the Delisting Regulations by acquiring Equity
Shares that are held by the public shareholders of the Company.

l) In view of the above and as per the provisions of Regulation 8 of the Delisting
Regulations, an Initial Public Announcement was made by the Manager for
and on behalf of the Acquirer on May 03, 2023, to express its intention to
undertake the Delisting Proposal, in accordance with applicable law and
consequently made an offer to voluntarily delist the Equity Shares of the
Company from BSE in accordance with the Delisting Regulations and the
Exemption Letters.

m) Upon receipt of the IPA, the Company made an intimation to the Stock
Exchange on May 17, 2023, that a meeting of the Board is to be held on May
22, 2023. Thereafter, the Board meeting was postponed to May 24, 2023,
wherein the proposal of Delisting offer was considered and approved.

n) The Company appointed CS Amit Gupta, Practicing Company Secretary, a
Peer-Reviewed Company Secretary in terms of Regulation 10(2) of the
Delisting Regulations to carry out the due diligence and issue of reconciliation
of share capital report.

o) As per the conditions mentioned in the Exemption Letters and in accordance
with Regulation 20 of Delisting Regulations read with Regulations 8 of
Securities & Exchange Board of India (Substantial Acquisition of Shares
&Takeovers) Regulation, 2011, for computing the Fair Value of the Company
the floor price had been computed at INR 31.78/- per share. Thereafter, the
CMD on behalf of the Acquirer applied with the Ministry of Heavy Industries,

p) Government of India, New Delhi for approval of floor price for the proposed
voluntary delisting and the Ministry vide their letter dated February 09, 2023,
granted approval for the floor price to be INR 31.78/- per share.

q) The Board of Directors of the Company, in their meeting held on May 24,
2023, inter-alia took on record the following:

i. Various exemptions granted by SEBI vide their exemption letters.

ii. The Due Diligence report dated May 24, 2023, submitted by the Peer
Reviewed Company Secretary; and

iii. After consideration of the various factors and advantages of delisting,
the Board has granted their approval under Regulation 10(4) of the
Delisting Regulations and recommended the proposal to voluntarily
delist the equity shares of the Company from the Stock Exchange for
approval of the shareholders of the Company through postal ballot.
The Board confirmed that:

I. The Company is in compliance with the applicable
provisions of securities laws except for Regulation 17(1),
Regulation 31, Regulation 38, Regulation 107, Regulation
108, Regulation 6 of the Securities & Exchange Board of
India (Listing Obligations & Disclosure Requirements)
Regulations, 2015.

II. The Acquirer is in compliance with Regulation 4(5) of the
Delisting Regulations; and

III. The proposed delisting is in the interest of the shareholders
of the Company.

r) The Company had dispatched the notice of postal ballot to the shareholders of
the Company for seeking their approval through postal ballot and e-voting on
June 05, 2023.

s) On July 07, 2023, the postal ballot results were announced. Further, BSE had
issued their in-principle approval to the Delisting Offer vide its letter dated
October 30, 2023, in accordance with Regulation 12 of the Delisting
Regulations.

t) The Acquirer shall be sending a letter of offer in due course of time, towards
the proposed voluntary delisting of equity shares of the Company and the
Company shall take necessary next steps to complete the process in
accordance with the applicable provisions of law.

u) The SEBI vide exemption letter no. SEBI/HO/CFD/DCR3/P/OW/2021/26908/1
dated October 04, 2021 read with SEBI/HO/CFD/DCR3/P/OW/2023/2508/1
dated January 18, 2023 and SEBI/HO/CFD/RAC/DCR2/P/OW/2023/1786/1
dated May 02, 2023 granted various Exemptions for the proposed delisting.
The details of the exemptions granted vide these letters are as follows:

i. Exemption from the provisions of Regulation 12(4)(d) of Delisting
Regulations, mandating for Compliance with the provisions of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015
(“LODR Regulations”). The various provisions of LODR Regulations
from which exemptions have been obtained from SEBI are
enumerated below:

I. Regulation 17 (1) of LODR Regulations, 2015 requiring that
at least half of the board of directors of the company shall
comprise of independent directors.

II. Regulation 31 of LODR Regulations, 2015 requiring the
company to ensure that a hundred percent of the
shareholding of the promoter(s) and promoter group is in
dematerialized form and the same is maintained on a
continuous basis in the manner as specified by SEBI.

III. Regulation 38 of LODR Regulations, 2015 read with Rule
19(2) and Rule 19A of Securities Contracts (Regulations)
Rules, 1957 requiring the company to comply with the
Minimum Public Shareholding requirements in the manner
as specified by SEBI from time to time.

IV. Regulation 107 and 108 of LODR Regulations, 2015 on
listing of securities on Stock Exchanges.

V. Regulation 6 of LODR Regulations, 2015 requiring the
company to appoint a qualified company secretary as the
compliance officer.

ii. Further, relaxation was sought from the eligibility criteria for small
companies as specified under Regulation 35(1) of the Delisting
Regulations as the net worth of the Company as of March 31, 20221
was INR 50.24 Lakhs which met the criteria however the paid-up
share capital was INR 87.27 Crore which exceeded the limit as

specified under Regulation 35(1) of the Delisting Regulations.

iii. Exemption under Regulation 42 of Delisting Regulations w.r.t the
extension of timeline to December 31, 2023, for completing the
process of Voluntary Delisting.

iv. Exemption from seeking indicative price from the public shareholders
and consent of Public Shareholders holding 90% or more of the Public
Shareholding, subject to the following conditions:

I. The Acquirer shall appoint a Manager to the offer and
decide an exit price after consultation. The exit price offered
to the public shareholders shall not be less than the floor
price determined in terms of clause (e) of sub-regulation (2)
of regulation 8 of the Takeover Regulations.

II. The Acquirer writes individually to all the public
shareholders of the company informing them of its intention
to get the equity shares delisted, the exit price together with
the justification therefor and seeking their consent for the
proposal for delisting.

III. The communication made to the public shareholders shall
contain justification for the offer price with particular
reference to the applicable parameters and specifically
mention that consent for the proposal would include consent
for dispensing with the exit price discovery through the
reverse book-building method.

IV. Pursuant to the delisting of its equity shares, the promoters
shall continue to accept shares tendered by any remaining
public shareholder holding such equity shares, for up to a
period of 2 years from the date of delisting, at the same
price at which the earlier acceptance of shares was made.

V. The Manager to the offer, in coordination with the acquirer,
shall ensure that the rights of the remaining public
shareholders are protected and, in furtherance of the same
shall:

1. Publish, on a quarterly basis, an advertisement in the
same newspapers in which the public announcement
of the offer for delisting of equity shares was
published, inviting the remaining public shareholders
to avail the exit opportunity during the two-year exit
window after delisting of shares.

2. Send follow-up communications to the remaining
public shareholders on a quarterly basis; and

3. File a quarterly progress report to the stock
exchange(s), which shall be disseminated to the
public thereafter by the stock exchange(s), disclosing
the following:

a. Number of remaining public shareholders at
the beginning and end of the quarter; and

b. Details of public shareholders who availed of
the exit opportunity during the quarter.

13. Management Discussion and Analysis:

The Company has ceased to be a going concern and necessary steps as per the
letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 from MHI, are being
implemented. The Company is following the steps as confirmed in the letter and
the process of closure is going on.

A. MISSION, VISION & OBJECTIVE

VISION SIL Vision was to grow as an organization in the field of automobiles

with greater emphasis on E- Mobility.

MISSION SIL Mission was to strengthen SIL presence in E-Mobility by foraying
into Electric Vehicle market and thus to provide cleaner mobility
solutions for future generations.

OBJECTIVE

? Design, Development and Commercialization of two variants of Electric
3-Wheeler/ one variant of BS-VI 3-Wheeler.

? Design, Development and Commercialization of two more variants of
Electric 3-Wheeler/BS-VI 3-Wheeler.

? Consolidation of E-Mobility business and BS-VI 3-Wheelers to make
SIL a force of domination in 3-Wheeler Industry.

? Creating Niche markets in Electric Vehicle Market.

However, as the GOI vide letter No.3 (1) 2020-PE-VI dated 28th January 2021 has
ordered for closure of SIL therefore the afore-mentioned Mission, vision & objectives
no longer are being pursued.

B. MARKET SCENARIO-SEGMENT /PRODUCT WISE PERFORMANCE

The Company ceased to be a segment player in this market and during the period
under review there were no production of three wheelers in the Company.

C. FUTURE OUTLOOK:

As the Department of Heavy Industries in the letter No.3 (1) 2020-PE-VI dated 28^th
January 2021 has ordered for closure of SIL therefore the Future Outlook of the
Company is to comply with steps defined under said order.

D. STRATEGIC ROAD MAP:

As the Department of Heavy Industries in the letter No.3 (1) 2020-PE-VI dated 28^th
January 2021 has ordered for closure of SIL therefore the Company ceased to be a
segment player in this market. Therefore, there is no strategic Road Map.

E. ADEQUACY OF INTERNAL CONTROL:

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

The Company ensures adherence to all internal control policies and procedures as
well as compliance with all regulatory guidelines. The Company has in place
adequate internal financial controls with reference to financial statements. The
Statutory Auditors of the Company tested such controls and no reportable material
weakness in the design or operation was observed.

F. OPERATIONAL REVIEW vs FINANCIAL REVIEW

During the year under report the operation of the Company remained suspended in
terms of the letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 and has initiated
the process of closure of SIL.

G. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL
RELATIONS FRONT AND NUMBER OF PEOPLE EMPLOYED:

The manpower strength of the Company as on 31^st March 2023 was NIL. In terms of
the communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 from
MHI, the operations of the Company had been stopped and process for closure of

SIL has been initiated. In terms of the said communication all regular employees
had been released and from 29.04.2021, the regular strength of the Company is
NIL.

H. SIGNIFICANT CHANGES IN FINANCIAL RATIOS

[Pursuant to Schedule V(B) to the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015]

Key Financial Ratios for the financial year ended 31st March, 2023 along with
details of significant changes (i.e. change of 25% or more as compared to the
immediately previous financial year) in key financial ratios, and the detailed
explanations, are provided below:

Financial Ratio Standalone Change Reason for such change

2021-22 2022-23

Operation Profit -1016.57 0.00 Due to closure of operations and

Margin payment of outstanding dues.

Net Profit Margin -972.32 7.80 Due to closure of operations and

sales proceed from auction of
Company Assets

I. Status before BIFR

On 18th February, 2010, BIFR has declared the Company as sick industrial
company in terms of the provisions of section 3(1)(o) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA) on reference being made after
full erosion of the Net- worth of the Company, as per annual accounts for the year
ended at 31^st March, 2009. BIFR approved the miscellaneous application filed by
the Company for seeking necessary permission/ appropriate directions for reliefs &
concessions enabling issue of shares, restructuring of balance sheet and for
release of funds for capital expenditure and working capital in line with the cabinet
decision for revival of SIL. The Draft Rehabilitation Scheme (DRS) was submitted
by the Operating Agency (SBI) for submission with BIFR. BIFR in its hearing
dated15.09.2015 directed that SIL ceases to be a sick industrial company, within
the meaning of Section 3(1)(o) of the SICA as its net worth has turned positive and
It is, therefore, discharged from the purview of SICA/BIFR.

13. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(3)(c) and 134(5) of the Companies
Act, 2013 your Directors to the best of their knowledge confirm that:

a) in preparation of the annual accounts for the year ended March 31, 2023, the
applicable accounting standards have been followed and that there are no
material departures in adoption of these standards.;

b) 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 ended on March 31, 2023 and of the losses of the Company for
year ended on that date;

c) 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, 2013, for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) 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 to the best of their knowledge and ability; and

f) Directors have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and are

14. DIRECTORS, KEY MANAGERIAL PERSONNEL, APPOINTED AND RESIGNED:

Government of India, Ministry of Heavy Industries has vide its Order No.
F.No.:3(23)/2012-PE-VI- (Part II), Dated 23^rd April, 2021, appointed Mr. Rupesh
Telang, gM, BHEL, FSIP as Chairman & Managing Director of SIL on an additional
charge basis w.e.f. April 25, 2021, for the period of One year. The Company has
received an order for an extension of his term as CMD till April 24, 2023.
Accordingly on competition of tenure of Mr. Rupesh Telang with effect from April

24, 2023, Mr. Amit Shrivastav, GM, BHEL, FSIP has been appointed as a
Chairman & Managing Director on an additional charge basis with effect from April

25, 2023, on the Board of SIL for a period of one year or till further orders,
whichever is earlier, in terms of letter No. Letter No. F. No.3(23)/2012-PE-VI (Vol
III)/CPSE I, dated 21.04.2023 issued by Govt. of India, Ministry of Heavy Industries,
New Delhi.

Government of India, Ministry of Heavy Industries has vide its Letter No. F.
No.3(4)/2018-PE-VI dated 27.08.2020, appointed during the year Shri Mukesh
Kumar as Director Finance (Additional Charge) of Scooters India Limited, Shri
Mukesh Kumar has completed his tenure with effect from August 29, 2022.

Mr. Rama Kant Singh, Director, MHI was appointed as a part-time official director
on the Board of Scooters India Limited in place of Mrs. Ritu Pande, Ex-Director,
MHI as per Govt. of India, Ministry of Heavy Industries & Public Enterprises,
Department of Heavy Industry, New Delhi vide letter No. F. No.2- 03/2/2017-PE-VI,
Dtd.10.11.2020. Mr. Arun Kumar Diwan, Joint Director, Ministry of Heavy Industries
(MHI) and Mrs. Sushma Batra, Deputy Director, MHI were appointed as a Part-time
official Director in place of Mr. Rama Kant Singh, Director, MHI with effect from
May 18, 2023 on the Board of SIL until further orders, in terms of letter No. F. No.2-
03/3/2017-PE-VI, dated May 18, 2023, issued by the Government of India, Ministry
of Heavy Industries, New Delhi.

Government of India, Ministry of Heavy Industries & Public Enterprises,
Department of Heavy Industry has vide its order No. 3(20)/2013-PE-VI dated
28.01.2020, appointed Shri Mahendra Pratap Singh and Smt Rakesh Sharma as
Independent Directors for a period of three years and both of them had completed
their tenure as a Non-Executive Independent Director on January 27, 2023. At
present the Company has only one Non-Executive Independent Director, who was
appointed with effect from November 02, 2021, by MHI vide letter No. 3(20)/2013-
PE-VI dated November 02, 2021.

In accordance with the provisions of Section 152 of the Act read with the Articles of
Association of the Company, Mr. Amit Shrivastav, CMD will retire by rotation at the
ensuing AGM and being eligible, offer himself for reappointment. The Board has
recommended his reappointment. The Board commends for his re-appointment.

The Board of Directors of the Company are appointed by the Government of India
as per guidelines issued by the Department of Public Enterprises (DPE),
Government of India from time to time. The remuneration of Managing
Director/Whole time Director is fixed as per grade and other terms and conditions
issued by the DPE. The Government Directors on the Board of the Company draw
their remuneration from Government of India and not from the Company. The
independent directors if any, are paid the sitting fee only (within the limits
prescribed under the Companies Act), as per Articles of Association, besides
reimbursement of the expenses to attend the meeting. No other remuneration is
paid to the independent directors.

During the year under report CS Samarth Dave who was appointed as a Company
Secretary & Compliance Officer of the Company with effect from July 20, 2021,
ceased with effect from April 01,2022. CS Prakhar Surveyal worked as a Company
Secretary & Compliance Officer for a short duration from August 12, 2022, to

August 30, 2022. CS Ravi Prakash Tiwari, joined as a Company Secretary and
Compliance Officer with effect from December 29, 2022, however as ceased with
effect from July 12, 2023. Mr. Raj Shekhar Tiwari, continues as a Chief financial
officer of the Company.

As regards, the appointment and remuneration of Key Managerial Personnel and
other employees, the appointment of all employees below board level is made as
per Recruitment & Promotion Rules of the Company and remuneration is paid to
them as per DPE guidelines.

The Nomination & Remuneration Committee (NRC) has been constituted. As
appointments of Directors are made by the Government of India, accordingly,
evaluation of Directors are done by the Government of India. It may also be noted
that Ministry of Corporate Affairs vide notification dated 5th June 2015 has
exempted Government Companies from the provisions of section 178(2), (3) and(4)
which requires formulation of criteria for determining qualifications, positive
attributes, independence and annual evaluation of Directors & Policy relating to
remuneration of Directors. Similar exemption is anticipated from SEBI under SEBI
LODR. The other matters relating to remuneration, if any, are placed to Nomination
and Remuneration Committee.

15. NUMBER OF MEETINGS OF THE BOARD

The Board met 13 times during the financial year, the details of which are given in
the Corporate Governance Report that forms part of this Annual Report. The
intervening gap between any two meetings was within the period prescribed by the
Companies Act, 2013 and the Listing Agreement Regulations.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO

A statement giving details of conservation of energy, technology absorption, foreign
exchange earnings and outgoing accordance with the Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014
is provided at ANNEXURE-1, 1-A and1-B to this report.

17. PARTICULARS OF EMPLOYEES:

Information under Section 197(12) of the Companies Act, 2013 read with rule 5(2)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 be treated as NIL as none of the employee of the company is getting
salary more than the prescribed limit.

18. INDUSTRIAL RELATION:-

During the period under review, the industrial relations have been by and large
satisfactory, however non-regular employee [ATTs/Cont. (JT)] has been protesting
hard for safeguarding their services in closure activity for while Ministry had
already provided in principle approval.

21. HUMAN RESOURCE DEVELOPMENT:

Due to Notice issued by Department of Heavy Industries (MHI) through Letter No.:
3(1)/2020-PE-VI on Dated 28/01/2021, all operation of the company has been
permanently shut down and as per the instruction stated in the said letter, in
accordance to the said notice all employees/ officers of the company has been
released during the year 2020-21.

22. REPRESENTATIVE FOR SCHEDULED CASTES & SCHEDULE TRIBE:

The Company operations are closed therefore there are no employees. As on
31.03.2023 the total strength of the company is NIL.

23. INDEPENDENT DIRECTOR''S DECLARATION

Two Independent Directors Smt Rakesh Sharma and Shri M.P. Singh on the Board
of the Company ceased w.e.f. 28.01.2023 on competition of tenure. As per the
requirement of section 149(7), the Company has received a declaration from
Independent Director that he meets the criteria of independence as laid down
under section 149(6) read with rule 5 of the Companies (Appointment and
Qualification of Directors) Rule, 2014 and Regulation 25 of the SEBI (Listing
Obligations and Disclosures Requirements) Regulations, 2015. The Independent
Directors of your Company have confirmed that (a) they meet the criteria of
Independence as prescribed under Section 149 of the Act and Regulation 16 of the
Listing Regulations 2015, (b) they are not aware of any circumstance or situation,
which could impair or impact their ability to discharge duties with an objective
independent judgment and without any external influence and (c) they have
registered their names in the Independent Directors'' Databank. Further, in the
opinion of the Board, the Independent Directors fulfill the conditions prescribed
under the Listing Regulations 2015 and are independent of the management of the
Company. The Independent Directors meeting was held on financial year 2022-23.
The Meeting was conducted without the presence of the Chairman, Executive
Directors and any other Managerial Personnel.

24. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS:

During the year 2022-23 no Independent Directors was appointed on the Board of SIL
and no re-appointment has been made during the year under report. The Independent
Directors on the Board of the Company are appointed by the Administrative
Ministry. Hence, disclosure pertaining to reappointment of independent directors does
not apply.

25. COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT &REMUNERATION
INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, ATTRIBUTES,
INDEPENDENCE ETC.:

The Board of Directors of the Company are appointed by the Government of India
as per guidelines issued by the Department of Public Enterprises (DPE),
Government of India from time to time. The remuneration of Managing
Director/Whole time Director is fixed as per grade and other terms and conditions
issued by the DPE. The Government Directors on the Board of the Company draw
their remuneration from Government of India and not from the Company. The
independent directors, if any, are paid the sitting fee only (within the limits
prescribed under the Companies Act), as per Articles of Association, besides
reimbursement of the expenses to attend the meeting. No other remuneration is
paid to the independent directors.

As regards, the appointment and remuneration of Key Managerial Personnel and
other employees, the appointment of all employees below board level is made as
per Recruitment & Promotion Rules of the Company and remuneration is paid to
them as per DPE guidelines.

The Nomination & Remuneration Committee (NRC) has been constituted. As
appointments of Directors are made by the Government of India, accordingly,
evaluation of Directors are done by the Government of India. It may also be noted
that Ministry of Corporate Affairs vide notification dated 5th June 2015 has
exempted Government Companies from the provisions of section 178(2), (3) and
(4) which requires formulation of criteria for determining qualifications, positive
attributes, independence and annual evaluation of Directors & Policy relating to
remuneration of Directors. Similar exemption is anticipated from SEBI under SEBI
LODR. The other matters relating to remuneration, if any, are placed to Nomination
and Remuneration Committee.

26. ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEE
AND DIRECTORS

In terms of the decision of GOI vide letter no. F. No. 3(1)/2020-PE-VI dated

28.01.2021 regarding closure, the provisions regarding MOU negotiations
regarding the targets for next year and evaluation thereof are not applicable to the
Company.

27. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS AND
THEIR APPOINTMENT

Being a Government Company, the Non-Executive Directors are drawn from
amongst pool of eminent persons with experience in business/finance/law/public
administration and enterprises. The Board Diversity Policy of your Company
requires the Board to have balance of skills, experience and diversity of
perspectives appropriate to the Company. The skills, expertise and competencies
of the Directors as identified by the Board, are provided in the ''Report on Corporate
Governance'' forming part of the Report and Accounts. The Articles of Association
of your Company provide that the strength of the Board shall not be fewer than
three nor more than fifteen. Directors are appointed/re-appointed with the approval
of the Members for a period of three to five years or a shorter duration, in
accordance with retirement guidelines and as may be determined by the Board
from time to time. All Directors, other than Independent Directors and Managing
Director are liable to retire by rotation, unless otherwise approved by the Members.
One-third of the Directors who are liable to retire by rotation, retire every year and
are eligible for re-election.

28. BOARD EVALUATION

In keeping with SIL''s belief that it is the collective effectiveness of the Board that
impacts the Company''s performance, the primary evaluation platform is that of the
collective performance of the Board as a whole. Board performance is assessed
against the role and responsibilities of the Board as provided in the Act and the
Listing Regulations 2015 read with the Company''s Governance Policy. The
parameters for Board performance evaluation have been derived from the Board''s
core role of trusteeship to protect and enhance shareholder value as well as to fulfil
the expectations of other stakeholders through strategic supervision of the
Company. Evaluation of the functioning of Board Committees is based on
discussions amongst Committee members and shared by the respective
Committee Chairman with the Board. Individual Directors are evaluated in the
context of the role played by each Director as a member of the Board at its
meetings, in assisting the Board in realizing its role of strategic supervision of the
functioning of the Company in pursuit of its purpose and goals. The evaluation of
individual Directors was carried out against the laid down parameters,
anonymously in order to ensure objectivity.

A 45 meeting of Independent Directors was held in the financial year 2022-23 to
review the performance of the independent Directors and the Board, pursuant to
Schedule IV to the Act and Regulation 25 of the Listing Regulations 2015.

29. GOING CONCERN STATUS

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated

28.01.2021 from MHI, the operations of the Company had been stopped and
process for closure of SIL has been initiated and the Company has ceased to be a
going concern and necessary steps as per the said communications are being
implemented. Further, in compliance of the said notice most of the assets of the
company has been auctioned during the year.

30. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION
FROM HOLDING OR SUBSIDIARY COMPANY:

The Company has no holding or subsidiary company, hence not applicable.

31. ADEQUACY OF INTERNAL CONTROL:

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

The Company ensures adherence to all internal control policies and procedures as
well as compliance with all regulatory guidelines. The Company has in place
adequate internal financial controls with reference to financial statements. The

Statutory Auditors of the Company tested such controls and no reportable material
weakness in the design or operation was observed.

(i) Reporting of Fraud

There was no instance of fraud during the year under review, which require the
Statutory Auditor to report to the Audit Committee / and or Board under section
143(12) of the Act and rules made thereunder.

32. FIXED DEPOSITS

The Company has not accepted any deposits under the provisions of the
Companies Act, 2013 during the year.

33. AUDITORS''REPORT

M/s S Srivastava and Company, Chartered Accountants were appointed as
Statutory Auditor of the Company by Comptroller & Auditor General of India for the
financial year 2022-23. M/s Asija & Associates LLP were Statutory Auditor of the
Company by Comptroller & Auditor General of India for the financial year 2021-22.
The Statutory Auditors'' Report on the accounts of the Company for the financial
year ended 31^st March, 2023 are enclosed at ANNEXURE-2.

The Accounts of the Company were submitted to the Comptroller and Auditor
General of India for their report under section 143(5) of the Companies Act, 2013
and their report is appended as ANNEXURE-3.

The management replies to the comments made by Auditors are placed at
Annexure - 3A.

34. STATUTORY AUDITOR

Comptroller and Auditor General of India has appointed M/s S Srivastava and
Company, Chartered Accountants as statutory Auditor of the Company for the year
2022-23.

35. CORPORATE GOVERNANCE:

Your Company is in compliance with all the applicable provisions of Corporate
Governance as stipulated under Chapter IV of the Listing Regulations. A detailed
report on Corporate Governance as required under the Listing Regulations is
provided in a separate section and forms part of the Annual Report.

A Certificate from M/s Amit Gupta & Associates, Company Secretaries regarding
compliance of conditions of Corporate Governance as stipulated under regulation
34(3) of the SEBI Listing regulations, 2015 along with the report on Corporate
Governance is attached as Annexure - 4 & 4A to this report.

36. SECRETARIAL AUDITOR:

M/s Amit Gupta & Associates, Practicing Company Secretaries were appointed as
secretarial auditors of the Company for the year 2022-23 as required under Section
204 of the Companies Act, 2013 and Rules made there under. The secretarial audit
report in Form MR-3 for FY 2022-23 forms part of the Directors Report and is
placed at ANNEXURE-5. Regarding comments/qualifications in the said report, it is
submitted that the Company has taken up matter regarding appointment of
Independent Directors/women Director with MHI and with the said appointments
the Board has became duly constituted in accordance with the provisions of the
Companies Act, 2013 & Listing agreement-Regulations and necessary compliances
regarding constitution of various Committees viz. Audit Committee, Nomination &
Remuneration Committee etc. has also be made. Further the Company is in
process of filing of necessary returns with the Registrar of Companies, Kanpur.

37. SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e SS-1 and SS-2,
relating to'' Meetings of the Board of Directors'' and'' General Meetings'', respectively,
have been duly followed.

38. SIGNIFICANT AND MATERIAL ORDERS

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated

28.01.2021 from MHI, the operations of the Company had been stopped and
process for closure of SIL has been initiated and the Company has ceased to be a
going concern and necessary steps as per the said communications are being
implemented. There are no other significant and material orders passed by the
regulators or courts or tribunals impacting the going concern status and the
Company''s operations in future.

39. AUDIT COMMITTEE AND VIGIL MECHANISM

In view of appointment of Independent Directors by GOI, the Company is having
Audit Committee pursuant to requirement of section 177(1) of Companies Act,

2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules,

2014 and Regulation18 of the SEBI Listing Regulations, 2015 & erstwhile clause
49 of Listing Agreement.

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower
Policy in terms of the Listing Agreement, may be accessed on the Company''s
website at the link: http://www.scootersindialimited.com. The policy includes
appointment of a Whistle Officer who will look into the matter, conduct detailed
investigation and take appropriate disciplinary action. Protected disclosures can be
made by a whistle blower through an e-mail, or dedicated telephone line or a letter
to the Whistle Blower Officer. During the year under review, no employee was
denied access to Whistle Blower Officer.

40. WEB-LINK OF ANNUAL RETURN:

The Annual Return of your Company is available on its corporate website at
https://www.scootersindialimited.com/.

41. RATIO OF DIRECTORS'' REMUNERATION TO MEDIAN EMPLOYEES''
REMUNERATION AND OTHER DISCLOSURES

During the year, no remuneration to the Chairman & Managing Director median
employees has been paid by the Company. (ANNEXURE-8).

42. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

As per the requirement of section 186(4) of Companies Act, 2013, particulars of
loans given, investments made, guarantees given or securities provided along with
the purpose for which the loan or guarantee or security is proposed to be utilized by
the recipient are provided in the financial statements on page number 71. The
Company is in compliance with the limits as prescribed under Section 186 of
Companies Act, 2013 read with rule 11 of the Companies (Meeting of Board and its
Powers) Rules, 2014.

43. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED
PARTIES:

All contracts / arrangements / transactions entered by the Company during the
financial year with related parties were in the ordinary course of business and on
an arm''s length basis.

Particulars of contracts or arrangements with related parties referred to in section
188(1) of the Companies Act, 2013 as required under section 134(3)(h) of the Act
read with Rule 8(2) of the Companies (Accounts) Rules 2014,, are presented in
Annexure-9 to the Directors'' Report in Form AOC 2.

The Board has adopted a Policy for dealing with Related Party Transaction. The
Policy as approved by the Board may be viewed on the Company website at the
weblink:www.scootersindialimited.com.

44. RISK MANAGEMENT:

SIL aims to have a formalized and systematic approach for managing risks across
the Company. It encourages knowledge and experience sharing in order to
increase transparency on the key risks to the Company to the extent possible. This
approach increases risk awareness, and ensures proper management of risks as
part of the daily management activities.

The policy on Risk Management may be accessed on the Company''s website at
the link: https://www.scootersindialimited.com. The objective of the Company''s
risk management process is to support a structured and consistent approach to
identify, prioritize, manage, monitor and report on the principal risks and
uncertainties that can impact its ability to achieve its strategic objectives. The
Company has introduced several initiatives for risk management including the
introduction of audit functions and processes to identify and create awareness of
risks, optimal risk mitigation and efficient management of internal control and
assurance activities.

45. LISTING:

The Company is listed at BSE Limited and has connectivity from both National
Securities Depository Limited (NSDL) & Central Depository Services Limited
(CDSL). Delhi Stock Exchange Limited, Delhi has been de-recognized by SEBI
vide its order dated November 19, 2014.The Company has paid due listing fees
with the stock exchange.

46. CORPORATE SOCIAL RESPONSIBILITY:

SIL strongly believes in concept of sustainable development and is committed to
operate and grow its operations in a socially and environmentally responsible way.
As per the Companies Act, 2013, all companies with a net worth of Rs. 500 crore or
more, or turnover of Rs.1,000 crore or more or a net profit of Rs.5 crore or more
during any financial year are required to constitute a Corporate Social
Responsibility (CSR) committee of the Board of Directors comprising of three or
more directors, at least one of whom should be an independent director and such
company shall spend at least 2%of the average net profits of the company''s
immediately preceding three financial years on CSR activities. In view of losses the
Company has ceased to fall in the requirement of doing CSR.

47. VIGILANCE CASES:

Pursuant to ACC approval vide DoPT''s O.M No. 66/1/2018-E-OMM(CVO) dated
11th October, 2019, Shri Ashok Maheshwari, Chief Vigilance Officer (CVO),
Rajasthan Electronics & Instruments Ltd.(REIL) Jaipur was appointed to hold the
additional charge of the post of Chief Vigilance Officer (CVO), Scooters India
Limited, Lucknow in addition to his existing duties and responsibilities beyond
13.09.2019 till the expiry of his tenure i.e. upto 30.04.2020 or till the appointment of
regular CVO in SIL or till further orders, whichever is earlier. After expiry of the said
tenure no CVO has been appointed for Scooters India Limited. Accordingly, no
report of CVO regarding the vigilance cases in pursuance of Order No.
F.No.26(1)/2016PE-VI dated January 24, 2018 issued by Ministry of Heavy
Industries, has been received for the year under report.

RIGHT TO INFORMATION CASES:

In pursuance of Order No.F.No.26(1)/2016PE-VI dated January 24, 2018, issued by
Ministry of Ministry of Heavy Industries & Public Enterprises; Department of Heavy
Industries Committee recommends including RTI matters during the year. The
Report is as follows:

RTI CASES STATUS FOR FY 2022-23
	Application Received in FY 2022-23	No. of cases transferred to other Public Authorities	Decisions where request/ appeals rejected*	Decisions where request/ appeals accepted	Cases Disposed off in FY 2022-23	Cases Pending
Requests	2	2		-	2	0
First Appeal	-	-	-	-	-	-
Second Appeal	-	-	-	-	-	-

48. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT,2013

The Company''s has always had a very strict policy on the sexual harassment
issues and has zero tolerance in this matter. Ensuring a safe environment for its
women employees is a major priority for the Company and its management. The
Company has complied with provisions relating to the constitution of Internal
Complaints Committee under Sexual harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.It has formed an Internal
Compliant Committee (ICC) to deal with all the matters or matters incidental
thereof. In your Company''s legacy of more than 40 years, no instance of sexual
harassment has ever been reported by any employee. During the year 2022-23
also, the Company has not received any complaints of sexual harassment.

49. SHIFTING OF THE REGISTERED OFFICE OF THE COMPANY

Effective from January 01, 2023, the registered office of the Company has been
shifted from Lucknow-Kanpur Road (16th Mile Stone), Sarojini Nagar, Lucknow-
226008 to 3/481, 1st Floor, Vikalp Khand, Gomti Nagar, Lucknow - 226 010, Uttar
Pradesh, India.

50. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the
following matters as there were no transactions on these items during the year
under review:

¦ Details relating to deposits covered under Chapter V of the Act.

¦ Issue of equity shares with differential rights as to dividend, voting or otherwise.

¦ Issue of shares (including sweat equity shares) to employees of the Company
under any scheme including Employees Stock Options Plan.

¦ The Company does not have any scheme of provision of money for the
purchase of its own shares by employees or by trustees for the benefit of
employees.

¦ Neither the Managing Director nor the Whole-time Directors of the Company
receive any remuneration or commission from any of its subsidiaries.

¦ No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Company'' operations in
future.

¦ No fraud has been reported by the Auditors to the Audit Committee or the Board.

¦ There are no details of application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 during the year along with their status
as at the end of the financial year, as no such proceedings initiated or pending.

¦ The details of difference between amount of the valuation done at the time of
one time settlement and the valuation done while taking loan from the Banks or
Financial Institutions along with the reasons thereof, are not required, as there
was no instance of onetime settlement with any Bank or Financial Institution.

53. ACKNOWLEDGEMENT:

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

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

By the order of Board of Directors

Sd/-

Amit Shrivastav
DIN:10141867

Chairman & Managing Director
Scooters India Limited,
Lucknow

Place :Lucknow
Date : 09.11.2023

---

Mar 31, 2018

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 46^th Annual Report on the business and operations of the Company together with the audited Balance Sheet and statement of Profit and Loss Account and Auditors'' Report thereon for financial year ended 31st March, 2018.

1. PRODUCTION REVIEW:

(Nos.)

Description	2016-17	2017-18
Three Wheeler	6650	3664

As per recent order of Supreme Court BS-III Vehicles will not be allowed for manufacturing & Sale after 1st April 2017. The approval of BS-IV complied Vehicle were not available and few models got approved between May to September 2017 hence reduction in the number of units produced.

2. SALES REVIEW:

The Sales performance for the year is shown below:

Description 2016-17 2017-18

	Physical	Financial	Physical	Financial
Three Wheeler	6349	10030.56	3107	4870.20
Spares	-	337.95		157.12
Petrol, Diesel, Lubricants etc	-	216.93		Nil
Other Operating Revenue	-			27.95
Total	-	10855.44		5055.27

3. FINANCIAL REVIEW:

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

(Rs. in lakhs)

Description	2016-17	2017-18
a) Profit before Depreciation, Interest, Taxes, Prior Year Items & Other Income	(1084.89)	(2283.63)
b) Profit before Depreciation, Interest, Taxes, & Other Income	(1084.89)	(2283.63)
c) PBDIT	(660.07)	(1627.89)
d) Profit /(Loss) for the Year	(1025.81)	(1870.11)

During the year under report:

(1) Loss before depreciation, interest, taxes, prior year items & other income increased by Rs. 1105.19 lakhs as compared to the previous year.

(2) Loss before depreciation, interest, taxes, & other income increased by Rs. 1104.33 Lakhs as compared to the previous year.

(3) Profit before depreciation, interest & taxes, decreased by Rs. 871.85 lakhs as compared to the previous year.

(4) Net profit for the year decreased by Rs. 842.44 lakhs as compared to the previous year.

4. OPERATIONAL REVIEW

During the year under report the operations of the company remained under stress due to constraints in marketing and disruption in supplies, leading to lower production, sales & profits. Further the Ministry of Road Transport and Highways vide notification no. GSR - 643(E) dated 19.08.2015 amended Rule 115 of Central Motor Vehicles Rules, 1989 to provide that the Mass Emission Standards for Bharat Stage IV shall come into force all over the country in respect of vehicles manufactured on or after the 1st April, 2017. Hon''ble Supreme Court of India in I.A.NO. 487/2017, I.A. NO. 491/2017, I.A. NO. 494/2017, I.A. NO. 489/2017, I.A. NO. 495/2017 in Writ Petition (Civil) No.13029/1985 in M C Mehta vs. Union of India & Others vide order dated

29.03.2017 held that:

a) On and from 1st April, 2017 such vehicles that are not BS-IV compliant shall not be sold in India by any manufacturer or dealer, that is to say that such vehicles whether two wheeler, three wheeler, four wheeler or commercial vehicles will not be sold in India by any manufacturer or dealer on and from 1st April, 2017.

b) All the vehicle registering authorities under the Motor Vehicles Act, 1988 are prohibited for registering such vehicles on and from 1st April, 2017 that do not meet BS-IV emission standards, except on proof that such a vehicle has already been sold on or before 31st March, 2017.

Due to the above change, the operations during the current year 2017-18 are also under stress. Though the Company has got vehicle type approval of few vehicle models namely VIKRAM 1500CG, 1000CG on May 2017, 750 D on July 2017 and 450 D on September 2017 of BS-IV; however liquidity crunch has further stressed the operations all through the year.

1MW Roof Top Solar Power Plant has been installed and commissioned on 10th August, 2017 . This will lead to substantial savings in energy cost.

5. CONTRIBUTION TO EXCHEQUER

The company has contributed a sum of Rs. 709.06 lakhs (towards duties & taxes) to the exchequer during the period under review vis-a-vis Rs. 2167.26 lakhs during previous financial year.

6. EXPORTS

The company has not made any exports during the period under review. Further the royalty income during the year by way of foreign exchange remittances also remained nil, in view of ongoing legal cases.

7. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:

An expenditure of Rs. 12.98 Lakhs was incurred on account of advertisement and publicity in the year.

8. STATUS OF REPAYMENT OF LOAN FROM GOI

In terms of Cabinet approval the existing term plan & non-plan loan as of 31st March, 2012 of Rs 85.21 Crores (Plan loan - Rs 1.93 Crores & Non-plan - Rs. 83.28 crores) has been converted into equity share capital of Rs. 85.21 crores by issue of 8.52 crores equity shares of Rs. 10/- each at par and further the Equity share Capital of the Company has been reduced by 85.21 crores by cancellation of aforesaid Rs. 85.21 crores equity share capital held by Government of India in terms of BIFR Order dated 24.06.2013. The existing interest Accrued as on 31st March, 2012 amounting to Rs. 2,367 Lacs on GOI loan (Plan loan of Rs. 193 lakhs & Non-plan loan of Rs. 8328 lacs) has been written off against accumulated losses and no further interest has been provided on the aforesaid loan from 31st March, 2012 onwards. The matter of repayment of principal & interest on non-plan loan sanctioned during financial year 2012-13 of Rs. 189 Lakhs, which has been followed up with Department of Heavy Industry since the year 2013-14, has been approved and Ministry of Heavy Industry and Public Enterprises vide its letter No. F3-33/2009 PE-VI(Vol-IV) dated 5th June 2018 communicated the freezing of the interest on the Non Plan Loan of Rs.1.89 crore and conversion into Equity of the Outstanding Principal amount of Rs.1.89 Crore. The Company has accordingly made allotment of 18.90 lacs equity shares of Rs. 10/- each. The GOI has also approved the reduction of equity of Rs. 85.21 crores in the share capital of SIL held by GOI against the accumulated losses with effect from 31.03.2013. The Company has been preparing its annual reports for 2012-13 and onwards recognizing the aforesaid reduction, so no revision in annual accounts is required to be made. The Government of India, Ministry of Industries & Public Enterprises, Department of Heavy Industry released funds by way of interest free plan loan amounting to Rs. 2000.00 lakhs during the financial year 2013-14 for working capital under an approved revival package of Scooters India Limited by Cabinet/ Misc. Application approved by BIFR. As per sanction 23.7.2013 the Moratorium period for the loan is 3 years and Installment commence from 31.3.2015. The company sought by way of Reliefs & Concessions in the Draft Rehabilitation Scheme (DRS) submitted to Operative Agency (SBI) for submission of BIFR for recovery of 5 installments commencing from 23.7.2016 onwards i.e. 3 years from date of sanctioning i.e. beginning w.e.f. 23.7.2016.

9. AUDITORS'' REPORT

M/s Dhawan & Madan, Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors of the Company for the year 2017-18. The Statutory Auditors'' Report on the accounts of the Company for the financial year ended 31 st March, 2018 are enclosed at ANNEXURE-2.

The Accounts of the Company were submitted to the Comptroller and Auditor General of India for their report under section 143(5) of the Companies Act, 2013 and their report is appended as ANNEXURE-3.

The Comptroller and Auditor General of India, has appointed M/s Dhawan & Madan, Chartered Accountants, as Statutory Auditors of the Company for the year 2018-19.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 01.04.2017 TO DATE

No material change and commitment have been made by the company from 01.04.2018 to date that has adverse effect on the financial position.

11. MANAGEMENT DISCUSSION AND ANALYSIS

(A) MISSION, VISION & OBJECTIVE

VISION Scooters India''s vision is to grow as a recognized automotive company, with market presence in public transport category in Goods, Passenger & Special Purpose Carriers in India & abroad.

MISSION Our mission is to build on the reliability we possess in niche markets and evolve into an economic enabler with stronger after-market support for our customers who trust us when plying our vehicles in service.

OBJECTIVE

- To prosper into defined areas delineated by the revival plan in 2013

- To achieve 2 % decrease in cost, and rationalize input materials expense.

- Growing resources & JV partners to fill strategic gaps in skills and operations.

- To reduce energy input per unit of production with renewable.

- To make a mark in Electric Three Wheeler market and thus support the cause of environment protection for further generations

(B) MARKET SCENARIO

(i). The total number of 3-Wheelers produced and sold in the domestic market by manufactures in India during the year 2017-18 as against 2016-17 is given below :

Category	Production	(In Nos.)
Segment/ Sub- segment	April''16- March''17	April''17- March''18
Passenger Carrier	671361	899023
Goods Carrier	112360	122888
Total	783721	1021911
	Domestic Sales	(In Nos.)
Passenger Carrier	402189	517423
Goods Carrier	109690	118275
Total	511879	635698

Note: Sales excluding Export of 281894 nos. in 2016-17 and 381002 nos. in 2017-18

Source: SIAM

Scooters India Limited has been a pioneer in bringing out various models of 3-Wheelers running on Diesel, Electric, LPG and CNG for applications as both passengers and load carrier versions. Company has played an important role in popularization of 3- Wheelers of larger capacity in the country. SIL has achieved sales of 6348 nos. in 2017-18. This has also resulted in decrease the SIL market share from 1.28 % in 2016-17 to 0.44 % in 2017-18.

The company continues to be the leader in larger capacity of vehicles i.e. passenger carrier (6 1) segment and goods carrier exceeding 1 ton of vehicles. The market share of company is 100% in 2017-18 (SIL sales 1210 nos. out of 1210 nos.).

(ii). 3- Wheelers growth drivers in future are as under:

- Rapid development of infrastructure and focus of both Central as well as State Govt. on infrastructure mainly on roads, the demand of 3- wheeler may see an upward trend in coming years. The demand driver for 3-Wheelers are its affordability as an economical viable transport solution. However the demand for 3-Wheeler passenger carrier depends on the availability of permits issued by Local RTO''s.

- Increased demand from semi urban & rural areas for 3- Wheelers because of its high product maneuverability and drivability

- Suitability of 3- Wheelers for congested Indian roads and tropical conditions.

- Self employment opportunity for a large no of youths especially with the Govt. focus on various schemes for the unemployed youths.

- 3- Wheelers of smaller capacity are in great demand in load carrier segment because of increase in organizing retail marketing across the country which requires faster and economical transportation.

- 3-Wheeler is a low cost transport solution to daily commuting passenger. Hence the market for 3 - wheeler shall continue to be there because of higher cost of transportation in other modes of transport like taxi, contract carriages, buses etc.

- 3-Wheeler are also better earning opportunity for unemployed youths. With a minimum expenditure i.e Rs. 45,000 - 50,000 (margin money) , one can start earning Rs.300-400 per day right from the day one of purchasing a new 3- Wheeler.

(C) Opportunities & Threats:

C1. Strengths:

- Integrated plant with capability to produce majority of components.

- Induction of new Machinery through CAPEX has improved quality as well as Productivity.

- Skilled manpower at reduced cost by re-engage retired personals.

- Scope of doubling/tripling the production with minimum investment,.

C2. Weakness :

- Depleting manpower.

- Sourcing of material at ecpnomical costs is difficult due to low volumes. This is also resulting in weak supply chain.

- Location of plant with respect to automotive hub:

- Not able to introduce new models/variants due to low volumes of production.

- Not having strong" vehicles finance" tie ups.

C3. Opportunities:

Growing automobile sector

Untapped markets - South, West, East & Exports

Developing hub and spoke transportation model

Increasing allocation of funds for poverty alleviation under various Govt. Schemes like PMRY, SC/ST, NREGS etc.

Rapidly growing awareness about vehicular pollution leading to policy formulation for increase use of alternate fuel vehicles such as Electric Vehicle.

Options for technology infusion

Rapidly growing network for CNG supply

Replacement market of 4W SCV, like Tata Ace with 3 wheelers.

C4. Threats:

Growing e- rickshaws markets.

Increase in product substitution effect by rapidly growing Electric Market Vehicle

Increased competition both from organized and unorganized players

Frequent changes in Market Norms.Volatility in Raw Materials prices/input and difficulty in passing on cost increase.

(D) Future Outlook:

Challenges faced by the Company:

The need for consistency in quality demands for enhanced investment in R&D and upgradation of plant & machinery. Existing over-lived plant & machinery is a cause of concern.

Manpower cost in the company is still high because of low volumes of production and so is the average age profile of the employees. While the company needs to reduce its manpower cost even while putting efforts to infuse fresh blood simultaneouly.

Though 3-wheelers as an industry continue to grow but increase in competition and availability of 4-wheelers in 1.0 ton and sub 1.0 ton category is expected to aggravate the extremely competitive scenario and impact the volumes and margins.

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

SIL has lesser presence in small 1 3- Passenger Category segment which has strong market preference. This segment contribution has high volumes though the margins are low. The established player''s viz. Piaggio, Mahindra etc. dominate the market. SIL is putting extra efforts to enhance its market share in this segment by expanding its market network to southern states.

Employees'' aspiration for effecting revision in salary and wages.

(E) Strategic Road Map:

Although there has been negative growth in three wheeler segment of Auto sector in India, the performance of your company has improved considerably in comparison to the previous year. Your company is evaluating various new product development options to cater to various market segments with a view to higher production and sales.

The various efforts are as under

- Introduction of Electric Passenger Vehicle with Li-ion Battery with DC Motor as short term strategy.

- In long term it is planned to introduce electric Passenger /Load Carrier vehicles with Li-Ion Battery and AC Motor.

(iii) Status before BIFR:

On 18th February, 2010, BIFR has declared the Company as sick industrial company in terms of the provisions of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act,1985 (SICA) on reference being made after full erosion of the Net-worth of the Company, as per annual accounts for the year ended at 31st March, 2009. BIFR approved the miscellaneous application filed by the Company for seeking necessary permission/appropriate directions for reliefs & concessions enabling issue of shares, restructuring of balance sheet and for release of funds for capital expenditure and working capital in line with the cabinet decision for revival of SIL. The Draft Rehabilitation Scheme (DRS) was submitted by Co Operating Agency (SBI) for submission with BIFR. BIFR in its hearing dated 15.09.2015 directed that SIL ceases to be a sick industrial company, within the meaning of Section 3(1)(o) of the SICA as its net worth has turned positive and It is, therefore, discharged from the purview of SICA/BIFR.

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

Your company is an ISO 9001: 2000 certified which focuses on quality management system. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with the Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is provided at ANNEXURE-1, 1-A and 1-B to this report.

13. PARTICULARS OF EMPLOYEES:

Information under Sec. 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 be treated as NIL as none of the employee of the company is getting salary more than the prescribed limit.

14. INDUSTRIAL RELATION:

During the period under review i.e. 01.04.2017 to 31.03.2018, the industrial relation in the Company remained normal. No agitation and strike took place during the aforesaid period.

15. TRAINING AND DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development the Company cannot progress. The Company has been analyzing developmental needs in technical and managerial areas and provide requisite training and exposure to all employees at all levels in the area on Professional Excellence through motivation etc. employees were trained during 01.04.2017 to 31.03.2018 on course of Fire Fighting, Vigilance, Industrial Safety & Health etc.

Programme Details	Officers	Staffs	Workmen	Trainees	Total
External	15	09	02	70	96
Internal	07	01	-	-	-
Total	22	10	02	70	104

16. VIGILANCE:

Vigilance Department continues to function with particular emphasis on the aspects of preventive and corrective vigilance. Strict vigil was exercised over various activities as part of Preventive Vigilance measures and suggestions were made to the Management for system improvement. Company also observed Vigilance Awareness Week from 31.10.2017 to 04.11.2017.

17. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company cannot progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, Advance Engine Combustion & Diagnostics, Competence Building for Effective Management, Healthcare Services, Part Programming for CNC Machines, Leadership Strategies for Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety, Environment Protection through Legal Reforms & technological Innovations, Building & Leading Effective Teams, Safety Engineering & Management, Value Based Management, Legal framework for Cost Audit Compliances, Finance for Non-finance Executives, International Commercial Practices, Energy Conservation, House Keeping etc.

18. HINDI IMPLEMENTATION:

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

19. REPRESENTATIVE FOR SCHEDULED CASTES & SCHEDULE:

As on 31.03.2018 the total strength of the company is 177. Out of these, 52 employees belong to Scheduled Castes and 01 employee to Scheduled Tribe.

20. DIRECTORS, KEY MANAGERIAL PERSONNEL, APPOINTED AND RESIGNED:

Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Heavy Industry has vide its Order No. F. No.:1(1)/2016-PE-VI dated 26th September, 2016, appointed Shri Renati Sreenivasulu as Chairman & Managing Director of SIL for the period of five years or till the date of his superannuation or until further orders, whichever is earliest. Shri Renati Sreenivasulu has joined as Chairman & Managing Director of SIL w.e.f. 06.10.2016. Mr. Shaktimani was appointed as a Diector (F) on additional charge basis with effect from 30 May, 2018 for the period of three months.

Ms. Shrabanti Mandol has joined as Company Secretary of SIL w.e.f 06.11.2017.

Mr. R.S Tiwari, HOD Finance also re designated as Chief Financial Officer of the Company w.e.f 08.02.2018

The Board of Directors of the Company are appointed by the Government of India as per guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time. The remuneration of Managing Director/Whole time Director is fixed as per grade and other terms and conditions issued by the DPE. The Government Directors on the Board of the Company draw their remuneration from Government of India and not from the Company. The independent directors, if any, are paid the sitting fee only (within the limits prescribed under the Companies Act), as per Articles of Association, besides reimbursement of the expenses to attend the meeting. No other remuneration is paid to the independent directors.

As regards, the appointment and remuneration of Key Managerial Personnel and other employees, the appointment of all employees below board level is made as per Recruitment & Promotion Rules of the Company and remuneration is paid to them as per DPE guidelines.

In absence of Independent Directors on the Board, the Nomination & Remuneration Committee (NRC) has also not been constituted. The other matters relating to remuneration, if any, are placed directly to the Board of Directors.

21. INDEPENDENT DIRECTOR''S DECLARATION

Directors on the Board of the Company are appointed by the Administrative Ministry. SIL has been requesting the Ministry to appoint the independent directors. The appointment of Independent directors is yet to be made by the Ministry. During the year there was no independent director on the board of the Company. Thus, the declaration pertaining to independent director does not apply.

22. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS:

During the year there was no independent director on the Board of the Company. Hence, disclosure pertaining to reappointment of independent directors does not apply.

23. NUMBER OF MEETINGS OF THE BOARD

The Board met seven times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the Listing Agreement.

24. COMPANY''S POLICY ON DIRECTORS'' APPOINTMENT & REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, ATTRIBUTES, INDEPENDENCE ETC.:

The Board of Directors of the Company are appointed by the Government of India as per guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time. The remuneration of Managing Director/Whole time Director is fixed as per grade and other terms and conditions issued by the DPE. The Government Directors on the Board of the Company draw their remuneration from Government of India and not from the Company. The independent directors, if any, are paid the sitting fee only (within the limits prescribed under the Companies Act), as per Articles of Association, besides reimbursement of the expenses to attend the meeting. No other remuneration is paid to the independent directors.

As regards, the appointment and remuneration of Key Managerial Personnel and other employees, the appointment of all employees below board level is made as per Recruitment & Promotion Rules of the Company and remuneration is paid to them as per DPE guidelines.

In absence of Independent Directors on the Board, the Nomination & Remuneration Committee (NRC) has also not been constituted. The other matters relating to remuneration, if any, are placed directly to the Board of Directors.

25. ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEE AND DIRECTORS

The Company enters into MoU with the Administrative Ministry in the month of March every year for the next financial year. Before signing the MoU the targets are negotiated with the Company in detail by the MoU Task Force constituted by the DPE. The evaluation of performance of the Company against MoU parameter is done by DPE every year and MoU score is communicated by it to the Company through the Administrative Ministry.

26. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION FROM HOLDING OR SUBSIDIARY COMPANY:

The Company has no holding or subsidiary company, hence not applicable.

27. RATIO OF DIRECTORS’ REMUNERATION TO MEDIAN EMPLOYEES’ REMUNERATION AND OTHER DISCLOSURES:

During the year, the remuneration of Chairman & Managing Director was Rs. 24.94 lac and median employee’s remuneration was Rs. 4.28 lac. The Chairman & Managing Director remuneration comes to 582.71% of median employees’ remuneration. (ANNEXURE - 7)

28. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

As per the requirement of section 186(4) of Companies Act, 2013, particulars of loans given, investments made, guarantees given or securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statements on page number 71. The Company is in compliance with the limits as prescribed under Section 186 of Companies Act, 2013 read with rule 11 of the Companies (Meeting of Board and its Powers) Rules, 2014.

29. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. Particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, are presented in Annexure 8 to the Directors'' Report in Form AOC 2.

30. DIRECTORS'' RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(3)(c) of the Companies Act, 2013 your Directors confirm that:

a) in preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with the requirements set out under Schedule III of the Act have been followed and that there are no material departures from the same;

b) 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 ended on March 31, 2018and of the profit of the Company for year ended on that date;

c) 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, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) 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 to the best of their knowledge and ability; and

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

31. ADEQUACY OF INTERNAL CONTROL:

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

The Company ensures adherence to all internal control policies and procedures as well as compliance with all regulatory guidelines. The Company has in place adequate internal financial controls with reference to financial statements. The Statutory Auditors of the Company tested such controls and no reportable material weakness in the design or operation was observed.

32. FIXED DEPOSITS:

The Company has not accepted any deposits under the provisions of the Companies Act, 2013 during the year.

33. SECRETARIAL AUDITOR:

M/s Amit Gupta & Associates, Practicing Company Secretaries were appointed as secretarial auditors of the Company for the year 2017-18 as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report in Form MR-3 for FY 2017-18 forms part of the Directors Report and is placed at Annexure - 5. Regarding comments/qualifications in the said report, it is submitted that the Company has taken up matter regarding appointment of Independent Directors/women Director with DHI and with the said appointments the Board shall become duly constituted in accordance with the provisions of the Companies Act, 2013 & Listing agreement and necessary compliances regarding constitution of various Committees viz. Audit Committee, Nomination & Remuneration Committee etc. shall also be made. Further the Company is in process of filing of necessary returns with the Registrar of Companies, Kanpur.

34. CORPORATE GOVERNANCE:

A Certificate from M/s Dhawan & Madan, Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under regulation 34(3) of the SEBI Listing regulations, 2015 along with the report on Corporate Governance is attached as Annexure - 4 to this report.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed.

35. SIGNIFICANT AND MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

36. AUDIT COMMITTEE AND VIGIL MECHANISM:

In view of non appointment of Independent Directors by GOI, the Company is not having Audit Committee pursuant to requirement of section 177(1) of Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Regulation 18 of the SEBI Listing Regulations, 2015 & erstwhile clause 49 of Listing Agreement.

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreement, may be accessed on the Company''s website at the link: http://www.scootersindia.com. The policy includes appointment of a Whistle Officer who will look into the matter, conduct detailed investigation and take appropriate disciplinary action. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Whistle Blower Officer. During the year under review, no employee was denied access to Whistle Blower Officer.

37. EXTRACT OF ANNUAL RETURN:

Extract of Annual Return of the Company is annexed herewith as ANNEXURE - 6 to this Report.

38. ISSUE OF SHARES WITH DIFFERENTIAL RIGHT, SWEAT EQUITY, EMPLOYEE STOCK OPTION:

The Company has not issued any share with differential right, sweat equity, employee stock option during the year, hence, not applicable.

39. RISK MANAGEMENT:

SIL aims to have a formalized and systematic approach for managing risks across the Company. It encourages knowledge and experience sharing in order to increase transparency on the key risks to the Company to the extent possible. This approach increases risk awareness, and ensures proper management of risks as part of the daily management activities.

The policy on Risk Management may be accessed on the Company''s website at the link: http//www.scootersindia.com. The objective of the Company''s risk management process is to support a structured and consistent approach to identify, prioritize, manage, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has introduced several initiatives for risk management including the introduction of audit functions and processes to identify and create awareness of risks, optimal risk mitigation and efficient management of internal control and assurance activities.

40. LISTING:

The Company is listed at BSE Limited and has connectivity from both National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL). Delhi Stock Exchange Limited, Delhi has been de-recognized by SEBI vide its order dated November 19, 2014.The Company has paid due listing fees with the stock exchange.

41. CORPORATE SOCIAL RESPONSIBILITY:

SIL strongly believes in concept of sustainable development and is committed to operate and grow its operations in a socially and environmentally responsible way.

As per the Companies Act, 2013, all companies with a net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) committee of the Board of Directors comprising of three or more directors, at least one of whom should be an independent director and such company shall spend at least 2% of the average net profits of the company''s immediately preceding three financial years on CSR activities. The Company has duly constituted a Corporate Social Responsibility (CSR) Committee pursuant to the requirement of Section 135(1) of Companies Act, 2013 and the Rules made there under. However in absence of an Independent Director Committee constitution is not proper. Accordingly to conserve the resources for business operations the Company has decided not to spend any amount towards Corporate Social Responsibility during the year under report.

42. VIGILANCE CASES:

In pursuance of Order No. F. No. 26(1)/2016 PE-VI dated January 24, 2018 issued by Ministry of Ministry of Heavy Industries & Public Enterprises; Department of Heavy Industries Committee recommends including vigilance cases during the year. The Report is as follows:

During 2017-18, 4 complaints related to procurement and Corruptions and Harassment of employees were investigated by Vigilance department, out of which 2 complaints related to procurement were carried to a logical conclusion and appropriate disciplinary action has been initiated wherever necessary. The remaining 2 related to Corruptions and Harassment of employees complaints were under various stages of investigation as on 31.03.2018.

43. RIGHT TO INFORMATION CASES:

In pursuance of Order No. F. No. 26(1)/2016 PE-VI dated January 24, 2018 issued by Ministry of Ministry of Heavy Industries & Public Enterprises; Department of Heavy Industries Committee recommends including RTI matters during the year. The Report is as follows:

RTI CASES STATUS FOR FY 2017-18
	Application Received in FY 2017-18	No. of cases transferred to other Public Authorities	Decisions where request/ appeals rejected*	Decisions where request/ appeals accepted	Cases Disposed off in FY 2017-18	Cases Pending
Requests	23	1	1	21	23	0
First Appeal	1	0	0	1	1	0
Second Appeal	1	0	1	1	1	0

44. ACKNOWLEDGEMENT:

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

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

By the order of Board of Directors

Sd/

Renati Sreenivasulu

DIN: 07634253

Place : New Delhi Chairman & Managing Director

Dated : August 03, 2018 Scooters India Limited, Lucknow -226008

---

Mar 31, 2015

The Board of Directors of your Company is pleased to present the 43rd Annual Report on the business and operations of the Company together with the audited Balance Sheet and Profit and Loss Account and Auditors' Report thereon for the financial year ended 31st March, 2015.

1. PRODUCTION REVIEW :

The production performance for the year is shown below in physical terms :

(Nos.) Description 2013-2014 2014-2015

Three wheelers 14,584 13,057

2. SALES REVIEW :

The Sales performance for the year is shown below :

2013-2014 2014-2015

Description Physical Financial Physical Financial (in Nos.) (Rs,in lakhs) (in Nos.) (Rs,in lakhs)

Three Wheelers 13,877 17,267.66 11,409 14,876.02

Spares - 546.38 - 405.65

Petrol, Diesel, Lubricants etc. - 1,552.35 - 1,490.11

Other Sales - 68.91 - 8.60

TOTAL - 19,435.30 - 16,780.38

3. FINANCIAL REVIEW :

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

(Rs.in Lakhs)

Description 2013-2014 2014-2015

a) Profit before Depreciation, Interest, Taxes, Prior Year 301.82 692.29 Items & Other Income

b) Profit before Depreciation, Interest, Taxes & Other Income 181.83 707.34

c) PBDIT 1,554.66 1,340.17

d) Profit/(Loss) for the year 1,359.64 1,108.86

During the year under report :

(1) The profit before depreciation, interest & taxes, prior year items & other income has increased by Rs. 390.47 lakhs.

(2) The profit before depreciation, interest & taxes & other income has increased by Rs. 525.41 lakhs.

(3) The profit before depreciation, interest & taxes has decreased by Rs. 214.49 lakhs.

(4) The net profit for the year has decreased by Rs. 250.78 lakhs as compared to the previous year.

4. OPERATIONAL REVIEW

During the year 2014-15 the management adopted a dual strategy of initiating several new measures along with focusing on the various improvement measures undertaken in the previous year to improve the operational efficiency of the company as a result of which the company reported operational profits (PBDIT from operations) to the tune of INR 667.42 Lakhs during the year 2014-15 consecutively for the second financial year in succession. Some of the measures initiated by the management are as follows:-

Focusing on value engineering through weight reduction of vehicle without any effect on the performance has resulted in savings which not only helped in improving the value of product but has also helped in controlling the material cost.

Significant energy savings measures were undertaken during the year like installation of 06 nos. VCB's on 11KV line, replacing the street lights with LED lights, overhauling of 33/11 KV, 5000 KVA main transformer etc. .

There has been substantial improvement in operational profit despite of additional financial impact of INR 99.70 Lakhs due to payment of Interim Relief (IR) from Jan. 2015 onwards to the employees.

Further due to change in computation of depreciation with the introduction of Companies act 2013 during the year there was additional impact of INR 73.93 Lacs.

5. DIVIDEND :

To conserve the resources the directors recommend no dividend during the year under report.

6. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum of Rs. 3,458.47 lakhs (towards duties & taxes) to the exchequer during the period under review vis-a-vis Rs. 4,161.50 lakhs during previous financial year.

7. EXPORTS

The company has not made any exports during the period under review. Further the royalty income during the year by way of foreign exchange remittances also remained nil, in view of ongoing legal cases.

8. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY :

An expenditure of Rs. 26.76 lakhs was incurred on account of advertisement and publicity during the year.

9. STATUS OF REPAYMENT OFLOAN FROM GOI

In terms of Cabinet approval the existing term plan & non-plan loan as of 31st March, 2012 of Rs. 85.21 Crores (Plan loan - Rs. 1.93 Crores & non-plan - Rs. 83.28 crores) of has been converted into equity share capital of Rs. 85.21 crores by issue of 8.52 crores equity shares of Rs. 10/- each at par and further the Equity share Capital of the Company has been reduced by 85.21 crores by cancellation of aforesaid Rs. 85.21 crores equity share capital held by Government of India in terms of BIFR Order dated 24.06.2013. The existing interest Accured as on 31st March, 2012 amounting to Rs. 2,367 lacs on GOI loan (Plan loan of Rs. 193 lacs & Non-plan loan of Rs. 8,328 lacs) has been written off against accumulated losses and no further interest has been provided for on the aforesaid loan from 31st March, 2012 onwards. No provision of interest on Non-Plan loan of Rs. 189 lacs released during the financial year 2012-13 has been made. This matter has been taken up with Department of Heavy Industry/Board of Industrial & Financial Reconstruction for maintaining the status quo.

The Government of India, Ministry of Industries & Public Enterprises, Department of Heavy Industry released funds by way of interest free plan loan amounting to Rs. 2000 lacs during the financial year 2013-14 for working capital under approved revival package of Scooters India Limited by Cabinet/Misc. application approved by BIFR. As per sanction 23.7.2013 the Moratorium period for the loan is 3 years and Installment commence from 31.3.2015. The company has sought by way of Reliefs & concessions in the Draft Rehabilitation Scheme (DRS) under preparation of Operative Agency (SBI) for submission to BIFR for recovery of 5 installments commencing from 23.7.2016 onwards i.e. 3 years from date of sanctioning. The DRS is under consideration of the operating Agency - SBI for submission of BIFR. Therefore repayment is likely to commence based on BIFR sanctioning of scheme w.e.f. 23.7.2016.

10. AUDITOR'S REPORT

M/s D.S. Shukla & Company, Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors' of the Company for the year 2014-15. The Statutory Auditors' Report on the accounts of the Company for the financial year ended 31st March, 2015 are enclosed at Annexure-2.

The Accounts of the Company were submitted to the Comptroller and Auditor General of India for their report under section 143(5) of the Companies Act 2013 and their report is appended as Annexure-3.

11. COST AUDITOR

Although in terms of the provisions of the Companies Cost Audit Rules 2014, the Company is not mandated for Cost Audit, however as a good governance measure M/s Sunil Singh & Co., Cost Accountant, Luck now has been appointed as Cost auditor of the Company by the Govt. of India, Ministry of Company Affairs, for auditing cost records relating to manufacture of Motor Vehicles for the financial year ending 31st March, 2016.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 01.04.2015 TO DATE :

No material change and commitment have been made by the company from 01.04.2014 to date that has adverse effect on the financial position.

13. MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Mission, Vision & Objective

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

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

Objective To sustain production till finalization of revival plan.

To achieve 2% decrease in cost.

Induction of Manpower to fill the gap.

To reduce energy input per unit of production.

(B) MARKET SCENARIO

(i) The total number of 3-wheelers produced and sold in the domestic market by manufacturers in India during the year 2014-15 as against 2013-14 is given below :

Category Production (In Nos.)

Segment/Sub-segment Apr.13 - Mar.14 Apr.14 - Mar.15

Passenger Carrier 733,244 845,606

Goods Carrier 96,864 103,415

Total : 830,108 949,021

Domestic Sales (In Nos.)

Passenger Carrier 385,384 432,234

Goods Carrier 94,701 99,693

Total : 480,085 531,927

Note : Sales excluding Export of 353,392 Nos. in 2013-14 and 407,957 Nos. in 2014-15.

Source-SIAM

Scooters India Limited has been a pioneer in bringing out various models of 3-wheelers running on Diesel, Electric, LPG and CNG for applications as both passengers and load carrier versions. Company has played an important role in popularization of 3-wheelers of larger capacity in the country. With focused efforts and approach, SIL has achieved sales of 11380 nos. in 2014-15. By achieving these sales, SIL has utilized 79.13% of their capacity. This has also resulted in decreasing the SIL market share from 2.89% in 2013-14 to 2.14% in 2014-15.

The company continues to be the leader in larger capacity of vehicles i.e. passenger carrier (6 1) segment and goods carrier exceeding 1 ton of vehicles. The market share of company is 99.87% in 2014-15 (SIL sales 2376 nos. out of 2379 nos.)

(ii) 3-Wheeler growth drivers in future are as under :

Rapid development of infrastructure and focus of both Central as well as State Govt. on infrastructure mainly on roads, the demand of 3-wheeler may see an upward trend in coming years. The demand driver for 3-wheeler are its affordability as an economical viable transport solution. However, the demand for 3-wheeler passenger carrier depends on the availability of permits issued by Local RTOs.

Increased demand from semi-urban and rural areas for 3-wheelers because of its high product maneuverability and drivability Suitability of 3-wheelers for congested Indian roads and tropical conditions.

Self employment opportunity for a large number of youths especially with the Govt. focus on various schemes for the unemployed youth.

3-wheelers of smaller capacity are in great demand in load carrier segment because of increase in organized retail marketing across the country which requires faster and economical transportation.

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

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

(C) Resources and Liquidity :

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

(D) Quality :

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

(E) Opportunities & Threats : E.1. Opportunities :

Growing automobile sector

Untapped markets of South, West, East and Exports

Developing hub and spoke transportation model.

Increasing allocation of funds for poverty alleviation under various Govt. Schemes like PMRY, SC/ST, NREGS etc.

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

Options for technology infusion.

Rapidly growing network for CNG/LPG supply.

Replacement market of 4W SCV, like Tata Ace.

E.2 Threats :

Government regular focus and thrust on pushing 3W e-rickshaws.

Increase in product substitution effect by rapidly growing 4 Wheel Small Commercial Vehicle.

Increased competition both from organized and unorganized players.

Strict enforcement of the pollution norms and Passenger Vehicle permits.

Increased customer expectations.

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

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

(F) Future Outlook :

i) Challenges faced by the Company :

The need for consistency in quality demands for enhanced investment in R&D and up gradation of plant & machinery. Existing over-lived plant & machinery is a cause of concern.

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

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

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

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

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

Employees' aspiration for effecting revision in salary and wages and increase in retirement age from 58 to 60 years.

(ii) Strategic Road Map :

Although there has been negative growth in three wheeler segment of Auto sector in India, the performance of your company has improved considerably in comparison to the previous year. Your company is evaluating various new product development options to cater to various market segments with a view to higher production and sales.

(iii) Status Before BIFR

On 18th February, 2010, BIFR has declared the Company as sick industrial company in terms of the provisions of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on reference being made after full erosion of the Net worth of the Company, as per annual accounts for the year ended at 31st March, 2009. BIFR approved the miscellaneous application filed by the Company for seeking necessary permission/appropriate directions for reliefs & concessions enabling issue of shares, restructuring of balance sheet and for release of funds for capital expenditure and working capital in line with the cabinet decision for revival of SIL. The Draft Rehabilitation Scheme (DRS) is under preparation by Operating Agency (SBI) and shall be submitted in due course before BIFR for sanction.

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

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

Information in accordance with provision of the Companies Act, 2013 regarding the conservation of energy, technology absorption and foreign exchange earnings and outflow are given in Annexure- I, I-A and I-B to this report.

15. PARTICULARS OF EMPLOYEES:

Information under Sec. 197(12) of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 be treated as NIL as none of the employee of the company is getting salary more than the prescribed limit.

16. INDUSTRIAL RELATIONS:

During period under review i.e. 01.04.2014 to 31.03.2015, the industrial relation in the company improved with adhoc release of wage revision (2007).

17. TRAINING AND DEVELOPMENT :

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company cannot progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, etc. employees were trained during 01/04/2014 to 31/03/2015 on Acupressure & Naturopathy, Leadership & Risk Management training program as per details given below :

Programme Details Officers Staffs Workmen Trainees Total

Internal 3 18 12 29 62

External 3 - - 12 15

Total 6 18 12 41 77

18. VIGILANCE:

Vigilance Group continues to function with particular emphasis on the aspects of preventive and corrective vigilance. Strict vigil was exercised over various activities as part of Preventive Vigilance measures and suggestions were made to the Management for system improvement Company also observed Vigilance Awareness Week from 27th October 2014 to 1st November, 2014.

19. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, Advance Engine Combustion & Diagnostics, Competence Building for Effective Management, Healthcare Services, Part Programming for CNC Machines, Leadership Strategies for Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety, Environment Protection through Legal Reforms & technological Innovations, Building & Leading Effective Teams, Safety Engineering & Management, Value Based Management, Legal framework for Cost Audit Compliances, Finance for Non-finance Executives, International Commercial Practices, Energy Conservation, House Keeping etc.

20. HINDI IMPLEMENTATION:

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

21. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

As on 31.03.2015 the total strength of the company is 594. Out of these, 130 employees belong to Scheduled Castes and 01 employee to Scheduled Tribe.

22. DIRECTORS, KMP APPOINTED AND RESIGNED

Mr. Dinesh Kumar retired w.e.f. 31.07.2014 on his retirement and Mr. Arvind Kumar has been appointed as Part time official Director in place of Mr. S.K. Singh w.e.f. 08.08.2014. Shri A.M. Manichan, Deputy Secretary (Finance), DHI was appointed as part time official Director in place of vice Shri Dinesh Kumar w.e.f. 23.09.2014. Shri A.K. Deori, Director, DHI was appointed in place of Shri Arvind Kumar as part time official Director with effect from 07.11.2014. Shri Pravin Agrawal, Director, DHI, has been appointed as a part time official Director w.e.f. 23.04.2015 in place of Mr. A.K. Deori.

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

The Company is not having Independent Director as well as women Director in terms of the provisions of the Companies Act, 2013 & Listing agreement. However the matter has been taken up with Ministry for filling up the vacant positions of Independent Director, women Director as well as Director (Finance) on the Board.

The Company has nominated Shri Rahul Bali, Director (Technical) & Shri B.N. Raj, Chief Financial Officer as Key Managerial Personnel.

Ms. Chaitali Panmei was nominated as CVO of SIL on additional charge basis w.e.f. 10.12.2014 on retirement of Miss. Parvinder Kaur. Further Mr. Manish Sahu, CVO, Bharat Pumps & Compressors Limited (BPCL), Allahabad has been nominated as CVO of SIL w.e.f. 1.04.2015.

23. INDEPENDENT DIRECTOR'S DECLARATION :

Directors on the Board of the Company are appointed by the Administrative Ministry. Corporation has been requesting the Ministry to appoint the independent directors. The appointment of Independent directors is yet to be made by the Ministry. During the year there was no independent director on the board of the Company. Thus, the declaration pertaining to independent director does not apply.

24. DISCLOSURE ON REAPPOIINTMENT OF INDEPENDENT DIRECTORS :

During the year there was no independent director on the Board of the Company. Hence, disclosure pertaining to reappointment of independent directors does not apply.

25. NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the Listing Agreement.

26. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, ATTRIBUTES, INDEPENDENCE ETC. :

The Board of Directors of the Company are appointed by the Government of India as per guidelines issued by the Department of Public Enterprises (DPE), Government of India from time to time. The remuneration of Managing Director is fixed as per grade and other terms and conditions issued by the DPE. The Government Directors on the Board of the Company draw their remuneration from Government of India and not from the Company. The independent directors, if any, are paid the sitting fee only (within the limits prescribed under the Companies Act), as per Articles of Association, besides reimbursement of the expenses to attend the meeting. No other remuneration is paid to the independent directors.

As regards, the appointment and remuneration of Key Managerial Personnel and other employees, the appointment of all employees below board level is made as per Recruitment & Promotion Rules of the corporation and remuneration is paid to them as per DPE guidelines.

In absence of Independent Directors on the Board, the Nomination & Remuneration Committee (NRC) has also not been constituted. The other matters relating to remuneration, if any, are placed directly to the Board of Directors.

27. ANNUAL EVALUATION OF PERFORMANCE OF BOARD, ITS COMMITTEE AND DIRECTORS :

The Company enters into MoU with the Administrative Ministry in the month of March every year for the next financial year. Before signing the MoU the targets are negotiated with the corporation in detail by the MoU Task Force constituted by the DPE. For evaluation of the performance of the Managing Director by the Administrative Ministry, a weight age of 75% is given for the achievement of MoU parameters by the corporation. The evaluation of performance of the corporation against MoU parameter is done by DPE every year and MoU score is communicated by it to the corporation through the Administrative Ministry.

28. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION FROM HOLDING OR SUBSIDIARY COMPANY :

The Company has no holding or subsidiary company, hence not applicable.

29. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHER DISCLOSURES :

During the year, the remuneration of Director (Technical) was Rs. 19.48 lac and median employee's remuneration was Rs. 3.45 lac. The Director (Technical) remuneration comes to 564% of median employees' remuneration.

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

As per the requirement of section 186(4) of Companies Act, 2013, particulars of loans given, investments made, guarantees given or securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statements on page number-71. The Company is in compliance with the limits as prescribed under Section 186 of Companies Act, 2013 read with rule 11 of the Companies (Meeting of Board and its Powers) Rules, 2014.

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis.

Particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, are presented in Annexure-8 to the Directors' Report in Form AOC 2.

32. DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(3)(c) of the Companies Act, 2013 your Directors confirm that :

a) in preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with the requirements set out under Schedule III of the Act have been followed and that there are no material departures from the same.

b) 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 ended on March 31, 2015 and of the profit of the Company for the year ended on that date;

c) 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, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) 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 to the best of their knowledge and ability; and

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

33. ADEQUACY OF INTERNAL CONTROL :

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

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

34. FIXED DEPOSITS:

The Company has not accepted any deposits under the provisions of the Companies Act, 2013 during the year.

35. SECRETARIAL AUDITOR

M/s Amit Gupta & Associates, Practicing Company Secretaries were appointed as secretarial auditors of the Company for the year 2014-15 as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report in Form MR-3 for FY 2014-15 forms part of the Directors Report and is placed at Annexure–5. Regarding comments/qualifications in the sand report, it is submitted that the Company has taken up matter regarding appointment of Independent Directors/women Director with DHI and with the said appointments the Board shall become duly constituted in accordance with the provisions of the Companies Act, 2013 & Listing agreement and necessary compliances regarding constitution of various Committees viz. Audit Committee, Nomination & Remuneration Committee etc. shall also be made. Further the Company is in process of filing of necessary returns with the Registrar of Companies, Kanpur.

The Board has further appointed M/s Amit Gupta & Associates, Practicing Company Secretaries, as secretarial auditor of the Company for the financial year 2015-16.

36. CORPORATE GOVERNANCE :

A Certificate from M/s D S Shukla & Co, Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement along with the report on Corporate Governance is attached as Annexure-4 to this report.

37. SIGNIFICANT AND MATERIAL ORDERS :

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

38. AUDIT COMMITTEE AND VIGIL MECHANISM :

In view of non appointment of Independent Directors by GOI, the Company is not having Audit Committee pursuant to requirement of section 177(1) of Companies Act, 2013 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Clause 49 of Listing Agreement.

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreement may be accessed on the Company's website at the link : http:// www.scootersindia.com. The policy includes appointment of a Whistle Officer who will look into the matter, conduct detailed investigation and take appropriate disciplinary action. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Whistle Blower Officer. During the year under review, no employee was denied access to Whistle Blower Officer.

39. EXTRACT OF ANNUAL RETURN :

Extract of Annual Return of the Company is annexed herewith as Annexure-6 to this Report.

40. ISSUE OF SHARES WITH DIFFERENTIAL RIGHT, SWEAT EQUITY, EMPLOYEE STOCK OPTION :

The Company has not issued any share with differential right, sweat equity, employee stock option during the year, hence, not applicable.

41. RISK MANAGEMENT :

SIL aims to have a formalized and systematic approach for managing risks across the Company. It encourages knowledge and experience sharing in order to increase transparency on the key risks to the Company to the extent possible. This approach increases risk awareness, and ensures proper management of risks as part of the daily management activities.

The policy on Risk Management may be accessed on the Company's website at the link : http// www.scootersindia.com. The objective of the Company's risk management process is to support a structured and consistent approach to identify, prioritize, mango, monitor and report on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has introduced several initiatives for risk management including the introduction of audit functions and processes to identify and create awareness of risks, optimal risk mitigation and efficient management of internal control and assurance activities.

42. LISTING :

The Company is listed at BSE Limited and has connectivity from both National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL). Delhi Stock Exchange Limited, Delhi has been de-recognized by SEBI vide its order dated November 19, 2014.

43. CORPORATE SOCIAL RESPONSIBILITY :

SIL strongly believes in concept of sustainable development and is committed to operate and grow its operations in a socially and environmentally responsible way.

As per the Companies Act, 2013, all companies with a net worth of Rs. 100 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) committee of the Board of Directors comprising of three or more directors, at least one of whom should be an independent director and such company shall spend at least 2% of the average net profits of the company's immediately preceding three financial years on CSR activities. The Company has duly constituted a Corporate Social Responsibility (CSR) Committee pursuant to the requirement of Section 135(1) of Companies Act, 2013 and the Rules made there under. However as presently the Company is a sick Company and under reference to BIFR, the Company has not spent any amount towards Corporate Social Responsibility.

44. ACKNOWLEDGEMENT:

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

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

For and on behalf of the Board



Rahul Bali R K Singh

Director (Technical) Chairman & Managing Director

DIN : 06549064 DIN : 06459343

Place : Lucknow

Date : 05.08.2015

---

Mar 31, 2014

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 42nd Annual Report on the business and operations of the Company together with the audited Balance Sheet and Profit and Loss Account and Auditors'' Report thereon for the financial year ended 31st March, 2014.

1. PRODUCTION REVIEW :

The production performance for the year is shown below in physical terms :

(Nos.)

Description 2012-2013 2013-2014

Three wheelers 15,807 14,584

2. SALES REVIEW :

The Sales performance for the year is shown below :

2012-2013 2013-2014

Description Physical Financial Physical Financial (in Nos.) (Rs. in lakhs) (in Nos.) (Rs. in lakhs)

Three Wheelers 15,837 19,020.74 13,877 17,267.66

Spares - 546.27 - 546.38

Petrol, Diesel, Lubricants etc. - 1,415.25 - 1,552.35

Other Sales - 1.44 - 68.91

TOTAL - 20,983.70 - 19,435.30

3. FINANCIAL REVIEW :

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

(Rs. in Lakhs)

Description 2012-2013 2013-2014

a) PBDIT (286.32) 1,554.66

b) Profit before Interest, Depreciation & Exceptional items (286.32) 1,554.66

c) Profit before Exceptional item (600.06) 1,359.64

d) Profit/(Loss) for the year (600.06) 1,359.64

During the year under report :

(1) The profit before depreciation, interest & taxes has increased by Rs. 1,840.98 lakhs.

(2) The net profit has increased by Rs. 1,959.70 lakhs as compared to the corresponding previous year.

4. OPERATIONAL REVIEW

During the year under review the management undertook several measures to turn around the Company as a result of which after several years of losses, the Company has reported operational profits (PBDIT from operations) of INR 265.39 Lakhs during the year 2013-14. Some of the initiatives undertaken by the management, that helped the Company''s turnaround are highlighted below :

Selection of optimal product mix to enhance value and to suit the market dynamics. The value of the product has improved by 4% (approx).

- Better inventory management & control leading to reduction in material cost by 4% (approx).

- Power savings, reduction in power consumption, control on rejections etc. leading to reduction in the unit energy consumption by approx 3%.

The Company has also reduced its future obligation considerably by initiating several measures like offering leave encashment benefit etc. to employees during the year.

5. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum of Rs. 4,161.50 lakhs (towards duties & taxes) to the exchequer during the period under review vis-a-vis Rs. 4,852.12 lakhs during previous financial year.

6. EXPORTS

The company has achieved exports of Rs. 37.95 lakhs during the period under review. The royalty income by way of foreign exchange remittances is NIL during the year.

7. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY :

An expenditure of Rs. 20.98 lakhs was incurred on account of advertisement and publicity during the year.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 01.04.2014 TO DATE :

No material change and commitment have been made by the company from 01.04.2014 to date that has adverse effect on the financial position. However it is pertinent to note that GOI has vide letter no. F. No. 3-33/2009 - PE VI dated 22.02.2013 conveyed that Cabinet has approved the revival package of Rs. 201.96 crores, which inter-alia includes the infusion of fresh funds, conversion of plan & non plan loan in to equity & waiver of interest and directed for taking necessary approval from BIFR. Since the Draft Rehabilitation Scheme (DRS) was under preparation by Operating Agency (SBI) and sanction by BIFR was likely to take some time, pending finalization of DRS & sanction by BIFR, SIL filed the Miscellaneous application for seeking necessary permission/ appropriate directions for reliefs & concessions enabling conversion of loan in to equity/issue of shares/reduction of shares capital etc. without further approval of shareholders/Central Government/SEBI/Stock exchanges in terms of provisions of section 81(1A) of the Companies Act, 1956, listing agreement, Securities And Exchange Board Of India (Issue of Capital And Disclosure Requirements) Regulations, 2009 and Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011, restructuring of balance sheet and for release of funds for capital expenditure and working capital in line with the cabinet decision for revival of SIL. BIFR in its hearing dated June 19, 2013, allowed the Miscellaneous application of SIL and vide order dated 24.06.2013 issued necessary directions accepting the prayers of SIL. Accordingly SIL has given effect to BIFR order envisaging inter-alia restructuring in share capital & write off of interest on plan & non plan loan against accumulated losses etc. in the annual accounts for the year ended at 31st March, 2013. The Draft Rehabilitation Scheme (DRS) is under preparation by Operating Agency (SBI) and shall be submitted in due course before BIFR for sanction. The Board of Directors of the Company have also recommended the implementation of pay scales (2007) for officers and has submitted proposal to DHI for Presidential directives. The negotiations for wage revision for workmen are also in process.

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

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

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

10. PARTICULARS OF EMPLOYEES:

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

11. INDUSTRIAL RELATIONS:

During under period under review i.e. 01.04.2013 to 31.03.2014, the industrial relation in the company improved with the implementation of long pending negotiated wages (2002) for workmen. However, workmen have been demanding for implementation of wage revision (2007). The negotiations for the same are in process.

12. TRAINING AND DEVELOPMENT :

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, etc. Employees were trained during 01/04/2013 to 31/03/2014 on Acupressure & Naturopathy, Leadership & Risk Management training program as per details given below :

13. VIGILANCE:

Vigilance Group continues to function with particular emphasis on maintaining strict vigil over various activities of the Company. The Company also observed Vigilance Awareness Week from October 28, 2013 to November 02, 2013.

14. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, Advance Engine Combustion & Diagnostics, Competence Building for Effective Management, Healthcare Services, Part Programming for CNC Machines, Leadership Strategies for Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety, Environment Protection through Legal Reforms & technological Innovations, Building & Leading Effective Teams, Safety Engineering & Management, Value Based Management, Legal framework for Cost Audit Compliances, Cost Accounting Record Rules 2011 & Cost Audit Report Rules 2011, Finance for Non-finance Executives, International Commercial Practices, Energy Conservation, House Keeping etc.

15. HINDI IMPLEMENTATION:

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

16. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

As on 31.03.2014 the total strength of the company is 620. Out of these, 142 employees belong to Scheduled Castes and 01 employee to Scheduled Tribe.

17. DIRECTORS:

The tenure of Shri Ajai Kumar as Chairman cum Managing Director of the Company came to an end w.e.f. 13.04.2013. Shri R K Singh, Jt. Secretary, Department of Heavy Industries, Ministry of Heavy Industries & Public Enterprises, Government of India has been given Additional charge as Chairman & Managing Director w.e.f. 15.05.2013. Shri Rahul Bali has been apointed as Director (Technical) w.e.f. 02.04.2013. Shri S K Singh has been appointment as Part time official director vice Shri Harbhajan Singh w.e.f. 20.12.2013 & Shri Dinesh Kumar has been appointed as part time official director vice Shri S K Goyal w.e.f. 25.03.2014. Mr. Dinesh kumar retired w.e.f. 31.07.2014 on his retirement and Mr. Arvind Kumar has been appointed as Part time official Director in place of Mr. S K Singh w.e.f. 08.08.2014. The Company has taken up the matter with Ministry for filling up the vacant positions of Independent Directors as well as Director (Finance) on the Board.

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

18. DIRECTORS'' RESPONSIBILITY STATEMENT:

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

a) That in the preparation of the accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review;

c) That the Directors have taken proper and sufficient care 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;

d) That the Directors have prepared the accounts for the financial year ended 31st March 2014 on a ''going concern'' basis.

19. ADEQUACY OF INTERNAL CONTROL:

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

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

20. FIXED DEPOSITS:

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

21. STATUS OF REPAYMENT OF LOAN FROM GOI

In terms of Cabinet approval the existing term Plan & non plan Loan as of 31st March, 2012 of RS. 85.21 crores (Plan loan - Rs. 1.93 Crores & non plan Rs. 83.28 Crores) of has been converted into equity share capital of Rs. 85.21 crores by issue of 8.52 crores equity share of Rs. 10 each at par and further the Equity Share Capital of the Company has been reduced by Rs. 85.21 crores by cancellation of aforesaid Rs. 85.21 crores equity share capital held by the Government of India in terms of BIFR order dated 24.06.2013. The existing Interest Accrued as on 31 March, 2012 amounting to Rs. 2,637 Lacs on GOI loan (Plan loan of Rs. 193 lacs & Non plan loan of Rs. 8328 lacs) has been written off against accumulated losses and no further interest has been provided for on the aforesaid loan from 31st March, 2012 onwards. No provision of interest on Non Plan Loan of Rs. 189 lacs released during the financial year 2012-13 has been made.

22. AUDITORS'' REPORT:

M/s D S Shukla & Co., Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors of the Company for the year 2013-14. The Statutary Auditor reports on the accounts of the company for the financial year ended 31st March, 2014 in enclosed as Annexure-III.

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

23. COST AUDITOR:

M/s Sunil Singh & Co., Cost Accountant, Lucknow has been appointed as Cost Auditor of the Company by the Govt. of India, Ministry of Corporate Affairs, for auditing cost records relating to manufacture of Motor Vehicles for the financial year ending 31st March 2014.

24. CORPORATE GOVERNANCE:

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

25. ACKNOWLEDGEMENT:

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

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

For and on behalf of the Board

R K Singh

Chairman & Managing Director

Place : New Delhi

Date : August 13, 2014

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Mar 31, 2013

Dear Shareholders,

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

1. PRODUCTION REVIEW :

The production performance for the year is shown below in physical terms :

(Nos.)

Description 2011-2012 2012-2013

Three wheelers 17,512 15,807

2. SALES REVIEW :

The Sales performance for the year is shown below :

2011-2012 2012-2013

Description Physical Financial Physical Financial

(in Nos.) (Rs.in lakhs) (in Nos.) (Rs. in lakhs)

Three Wheelers 17,584 20,655.36 15,837 19,020.74

Spares - 654.37 - 546.27

Petrol, Diesel, Lubricants etc. - 1,364.13 - 1,415.25

Other Sales - 123.98 - 1.44

TOTAL - 22,797.84 - 20,983.70

3. FINANCIAL REVIEW :

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

(Rs. in Lakhs)

Description 2011-2012 2012-2013

a) PBDIT (319.12) (281.43)

b) Profit before Interest, Depreciation & Exceptional items (2.42) (281.43)

c) Profit before Exceptional item (1,677.29) (600.06)

d) Profit/(Loss) for the year (1,993.99) (600.06)

During the year under report :

(1) The loss before depreciation, interest & taxes have decreased by Rs. 37.69 lakhs.

(2) The loss before depreciation, interest, taxes and exceptional items has increased by Rs. 279.01 lakhs.

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

(4) However, the net loss after exceptional items for the year has decreased by Rs. 1,393.93 lakhs as compared to the previous year.

4. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum of Rs. 4,852.12 lakhs to the exchequer during the period under review vis-a-vis Rs. 4,837.65 lakhs during previous financial year.

5. EXPORTS

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

6. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY :

An expenditure of Rs. 10.12 lakhs was incurred on account of advertisement and publicity during the year.

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

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

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

Your company is ISO 9001: 2000 certified which focuses on quality management system. Information in accordance with provision of Section 217(1)(e) of the Companies Act, 1956 regarding the conservation of energy, technology absorption and foreign exchange earnings and outflow are given in Annexure-I, I-A and I-B to this report.

10. PARTICULARS OF EMPLOYEES:

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

11. INDUSTRIAL RELATIONS:

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

12. VIGILANCE:

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

13. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, Advance Engine Combustion & Diagnostics, Competence Building for Effective Management, Healthcare Services, Part Programming for CNC Machines, Leadership Strategies for Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety, Environment Protection through Legal Reforms & technological Innovations, Building & Leading

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

14. HINDI IMPLEMENTATION:

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

15. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

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

16. DIRECTORS:

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

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

17. DIRECTORS'' RESPONSIBILITY STATEMENT:

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

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

b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review;

c) That the Directors have taken proper and sufficient care 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;

d) That the Directors have prepared the accounts for the financial year ended 31st March 2013 on a ''going concern'' basis.

18. ADEQUACY OF INTERNAL CONTROL:

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

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

19. FIXED DEPOSITS:

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

20. STATUS OF REPAYMENT OF LOAN FROM GOI

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

21. AUDITORS'' REPORT:

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

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

22. COST AUDITOR:

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

23. CORPORATE GOVERNANCE:

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

24. ACKNOWLEDGEMENT:

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

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

For and on behalf of the Board

R K Singh

Chairman & Managing Director

Place : New Delhi

Date : August 23, 2013

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Mar 31, 2012

The Board of Directors of your Company is pleased to present the 40th Annual Report on the business and operations of the Company together with the audited Balance Sheet and Profit and Loss Account and Auditors' Report thereon for the financial year ended 31st March, 2012.

1. PRODUCTION REVIEW :

The production performance of the Company has increased considerably and recorded highest production during the year as under :

(Nos.)

Description 2010-2011 2011-2012

Three wheelers 14,381 17,512

2. SALES REVIEW :

The Sales performance also increased leading to highest sales during the year as shown below:

2010-2011 2011-2012 Description Physical Financial Physical Financial (in Nos.) (Rs in lakhs) (in Nos.) (Rs in lakhs)

Three Wheelers 14,039 15,770.98 17,584 20,656.36

Spares - 464.42 - 654.37

Petrol, Diesel, Lubricants etc. - 1,240.12 - 1,364.13

Other Sales - 77.85 - 123.98

TOTAL - 17,553.37 - 22,797.84

3. FINANCIAL REVIEW:

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

(in Lakhs)

Description 2010-2011 2011-2012

a) PBDIT (523.84) (319.12)

b) Profit before Interest, Depreciation & Exceptional items (523.84) (2.42)

c) Profit before Exceptional items (1,711.14) (1,677.29)

d) Profit/(Loss) for the year (1,711.14) (1,993.99)

During the year under report :

(1) The loss before depreciation, interest & taxes decreased by Rs. 204.72 lakhs.

(2) The loss before depreciation, interest & taxes and exceptional items has decreased by Rs. 521.42 lakhs.

(3) The net loss before Exceptional items has decreased by Rs. 33.85 lakhs as compared to the corresponding previous year

(4) However, the net loss after exceptional items for the year has increased by Rs. 282.85 lakhs as compared to the previous year

4. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum ofRs. 4,837.65 lakhs to the exchequer during the period under review vis-a-vis Rs. 3,811.49 lakhs during previous financial year

5. EXPORTS

The company has achieved exports ofRs. 60.36 lakhs during the period under review. The royalty income by way of foreign exchange remittances is NIL during the year.

6. MANAGEMENT DISCUSSION AND ANALYSIS:

(A) Mission, Vision & Objective

Vision To improve the performance of the company so as to be competitive and

profitable through constantly improving existing products, adding new products and expanding customer base.

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

Objective

- To achieve 10% increase in production.

- To achieve 5% decrease in cost

- Rationalization of Manpower.

To reduce energy input per unit of production.

(B) MARKET SCENARIO

(i) The total number of 3-wheelers produced and sold in the domestic market by manufacturers in India during the year 2011-12 as against 2010-11 is given below :

Category Production

Segment/Sub-seament Apr.10-Mar.11 Apr.11-Mar.12

Passenger Carrier 696,984 767,173

Goods Carrier 102,569 110,538

Total: 799,553 877,711

Sales

Passenger Carrier 425,358 406,236

Goods Carrier 100,666 107,015

Total: 526,024 513,251

Note : Sales excludes Export of 269,968 Nos. in 2010-11 and 362,876 Nos. in 2011-12.

Source-SIAM

Scooters India Limited has been a pioneer in bringing out various models of 3-wheelers running on diesel, electric and CNG for application as both passengers and load carrier versions. Company has played an important role in popularization of 3-wheelers of larger capacity in the country. With focused efforts and approach, SIL has achieved highest ever sales of 17,569 nos. in 2011-12. This is an increase of 25% over the sales made in 2010- 11 whereas the domestic market of three wheelers has shown negative trend (-) 2.43% compared to previous year. This has also resulted in increasing the SIL market share from 2.67% in 2010-11 to 3.43°% in 2011-12.

The company continues to be the leader in larger capacity of vehicles i. e. passenger carrier (6 1) segment and goods carrier exceeding 1 ton of vehicles. The market share of company is 59.1% in 2011-12 (SIL sales 6,904 of vehicles out of 11,685 nos.)

(ii) 3-Wheeler growth drivers in future are as under :

- Rapid development of infrastructure and focus of both Central as well as State Govt, on infrastructure mainly on roads, the demand of 3-wheeler may see an upward trend in coming years. The demand driver for 3-wheeler are its affordability as an economical viable transport solution, however, the demand for 3-wheeler passenger carrier depends by availability of permits issued by Local RTOs.

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

- Suitability of 3-wheelers for congested Indian roads and tropical conditions.

- Self employment opportunity for a large no. of youths especially with the Govt, focus on various schemes for the unemployed youths.

3-wheeler of smaller capacity are in great demand in load carrier segment because of increase in organised retail marketing across the country which requires faster and cheaper transportation.

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

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

(C) Resources and Liquidity :

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

(D) Quality:

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

(E) Opportunities & Threats :

E. 1. Opportunities:

- Growing automobile sector including three-wheelers.

- Untapped markets-Rural, South, West & Exports

- Developing hub and spoke transportation model.

- Increasing allocation of funds for proverty alleviation under various Govt. Schemes like PMRY, SC/ST, NREGA etc.

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

- Options for technology infusion.

- Rapidly growing network for CNG/LPG supply E.2 Threats :

Increase in product substitution effect by rapidly growing 4 Wheel Small Commercial Vehicle.

- Increased competition both from organized and unorganized players.

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

- Increased customer expectations.

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

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

(F) Future Outlook:

i) Challenges faced by the Company :

- The need for consistency in quality demands for enhanced investment in R & D and upgradation of plant & machinery Existing over-lived plant & machinery is a cause of concern.

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

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

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

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

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

- Employees' aspiration for effecting revision in salary and wages and increase in retirement age from 58 to 60 years.

(ii) Strategic Road Map :

Although there has been negative growth in three wheeler segment of Auto sector in India, the performance of your company has improved considerably in comparison to the previous year. Monthly production of vehicles has shown significant improvement Your company is evaluting various new product development options to cater to various market segments with a view to higher production and sales.

(iii) Status Before BIFR

On 18lh February, 2010, BIFR has declared the Company as sick industrial company in terms of the provisions of section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on reference being made after full erosion of the Networth of the Company as per annual accounts for the year ended at 31st March, 2009. Last meeting of BIFR was held on 16h July, 2012, and the next meeting is scheduled on 3rd October, 2012. The Business Plan for revival of SIL is under consideration of GOI.

7. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:

An expenditure ofRs. 9.74 lakhs was incurred on account of advertisement and publicity during the year.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 1.4.2011 TO DATE:

No material change and commitments have been made by the company from 01-04-11 to date that has adverse effect on the financial position of the company.

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

Your company is an ISO 9001 : 2000 certified which focuses on quality management system. Information in accordance with provision of Section 217 (1) (e) of the Companies Act, 1956 regarding the conservation of energy, technology absorption and foreign exchange earnings and outflow are given in Annexure - 1, 1-A and 1-B to this report.

10. PARTICULARS OF EMPLOYEES:

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

11. INDUSTRIAL RELATIONS:

During the year under review, that is 1.4.2011 to 31.3.2012, the industrial relations in the Company continued to be under stress mainly due to non fulfillment of employees' aspirations. The aspiration of employees regarding Wage Revision and retirement age could not be fulfilled due to Company's financial health.

12. VIGILANCE:

Vigilance Group continues to function with particular emphasis on the aspects of preventive and corrective vigilance. Strict vigil was exercised over various activities as part of Preventive Vigilance measures and suggestions were made to Management for system improvement. Company also observed Vigilance Awareness Week from 31.10.2011 to 05.11.2011.

13. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Professional Excellence through Motivation, Advance Engine Combustion & Diagnostics, Competence Building for Effective Management, Healthcare Services, Part Programming for CNC Machines, Leadership Strategies for Building Excellence, Quest for Excellence Imperatives for India PSUs, Health, Safety, Environment Protection through Legal Reforms & technological Innovations, Building & Leading Effective Teams, Safety Engineering & Management, Value Based Management, Legal framework for Cost Audit Compliances, Cost Accounting Record Rule 2011 & Cost Audit Report Rules 2011, Finance for Non-finance Executives, International Commercial Practices, Energy Conservation, House Keeping etc.

14. HINDI IMPLEMENTATION:

Official Language implementation Committee monitors and reviews the progress of implementation of the Annual Programme issued by Department of Offical Language, Ministry of Home Affairs, Government of India. Hindi Divas is commemorated every year by observing offical language week in the month of September. Various competitions are organized for employees and winners are felicitated on Republic Day.

15. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

As on 31.3.2012, the total strength of the company is 796. Out of these, 219 employees belong to Scheduled Castes and 01 employee to Scheduled Tribe.

16. DIRECTORS :

Shri Harbhajan Singh, Jt. Secretary, has joined as Part time Official Director w.e.f. 13th Sept. 2011 vice Shri Vikram Gulati who ceased to be Director on 6.9.2011. Tenure of Shri P.P. Sarkar, Director (Technical) came to an end on 15.05.2012. Shri S.K. Goyal has been nominated by GOI as part time non-official Director on the Board of SIL w.e.f. 17.05.2012. The Company has taken up the matter with Ministry for filling up the vacant positions of Independent Directors as well as Director (Finance) & Director (Technical) on the Board.

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

17. DIRECTORS' RESPONSIBILITY STATEMENT:

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

(a) That in the preparation of the accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review;

(c) That the Directors have taken proper and sufficient care 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;

(d) That the Directors have prepared the accounts for the financial year ended 31st March 2012 on a 'going concern' basis.

18. ADEQUACY OF INTERNAL CONTROL:

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

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

19. FIXED DEPOSITS:

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

20. STATUS OF REPAYMENT OF LOAN FROM GOI

Due to continuing losses the company has not re-paid principal amount of Rs. 2643.83 lakhs and interest ofRs. 2217.38 lakhs as on 31.03.2012.

21. AUDITORS REPORT:

M/s S. Srivastava & Co., Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors of the Company for the year 2011-12. The Statutory Auditors' Report on the Accounts of the Company for the financial year ended 31st March, 2012 alongwith Management replies are enclosed at Annexure-V.

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

22. COST AUDITOR:

Shri R.N. Tripathi, Cost Accountant, Lucknow has been appointed as Cost Auditor of the Company by the Govt. of India, Ministry of Corporate Affairs, for auditing cost records relating to manufacture of Motor Vehicles for the financial year ending 31st March 2012.

Cost audit report for the year ended at 31st March, 2011 was submitted with the Ministry of Corporate Affairs on 26.09.2011.

23. CORPORATE GOVERNANCE :

A certificate from M/s S. Srivastava & Co., Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement alongwith the report on Corporate Governance is attached as Annexure-II to this report.

24. ACKNOWLEDGEMENT :

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

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

For and on behalf of the Board

Ajai Kumar

Chairman-cum-Managing Director

Place : Lucknow

Date : August 23, 2012

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Mar 31, 2011

Dear Shareholders,

The Board of Directors of your Company is pleased to present the 39th Annual Report on the business and operations of the Company together with the audited Balance Sheet and Profit and Loss Account and Auditors' Report thereon for the financial year ended 31st March, 2011.

1. PRODUCTION REVIEW:

The production performance for the year is shown below in physical terms : I

Description 2009-2010 2010-2011 Three wheelers 12,178 14,381

2. SALES REVIEW:

The Sales performance for the year is shown below :

2009-2010 2010-2011

Description Physical Financial Physical Financial (in Nos.) (Rs in lakhs) (in Nos.) (RS, in lakhs)

Three Wheelers 11,720 12,492.07 14,039 15,770.98

Spares - 468.03 - 464.42

Petrol, Dtesel, Lubricants etc. - 1,024.34 - * 1,240.12

Other Sales - 73.63 - 77.85

TOTAL - 14,058.07 - 17,553.37

3. FINANCIAL REVIEW:

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

(Rs in Lakhs)

Description 2009-2010 2010-2011

a) Profit/(Loss) before Depreciation (2,637.40) (1,577.59)

b) Depreciation 151.44 133.55

c) Profit/(Loss) for the year (2,788.84) (1,711.14)

d) Prior period adjustment (11.70) -

e) Income Tax - -

f) FBT - -

Net Profit/(Loss) (PAT) (2,800.54) (1,711.14)

The production and sales performance of the Company improved during the year under report. However the company registered a loss of Rs 17.11 crores compared to X 28.01 crores in the previous year.

4. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum of Rs 3,811.49 lakhs to the exchequer during the period under review.

5. EXPORTS

The company has achieved exports of Rs 25.40 lakhs during the period under review. The royalty income by way of foreign exchange remittances amounted to Rs 30.37 lakhs during the year.

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

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

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

10. PARTICULARS OF EMPLOYEES:

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

11. INDUSTRIAL RELATIONS:

During the year under review, that is 1.4.2010 to 31.3.2011, the industrial relations in the Company continued to be under stress mainly due to non fulfillment of employees' aspirations. The aspiratioii of employees regarding Wage Revision and retirement age could not be fulfilled due to Company's poor financial health.

12. VIGILANCE:

Vigilance Group continues to function with particular emphasis on the aspects of preventive and corrective vigilance. In selected areas, surprise checks and system studies were carried out and the improvements suggested were implemented. Company also observed Vigilance Awareness Week from 25.10.2010 to 01.11.2010.

13. HUMAN RESOURCE DEVELOPMENT :

Employees of the Company are the most important constituent and Company understands that without their motivation and development Company can not progress. The Company has been analyzing developmental needs in technical and managerial areas and provides requisite training and exposure to the employees at all levels in the area on Product upgradation, Energy Conservation, Total Productive Maintenance, Safety, Customer Satisfaction, Quality & Environmental Management Systems, Productivity and Work Culture.

14. HINDI IMPLEMENTATION:

Official Language implementation Committee monitors and reviews the progress of implementation of the Annual Programme issued by Department of Offical Language, Ministry of Home Affair, Government of India. Hindi Divas is commemorated every year by observing offical language week in the month of September. Various competitions are organized for employees and winners are felicitated.

15. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:

As on 31.3.2011, the total strength of the company is 1011. Out of these, 246 employees belong to Scheduled Castes and 02 employees to Scheduled Tribe.

16. DIRECTORS:

Shri P. Muthusamy, Director (Finance), has been relieved from SIL w.e.f. 17th March, 2011. The Company has taken up the matter with DHI for filling up the vacant positions of Independent Directors as well as Director (Fin.) on the Board.

Shri S.K. Tripathi, Independent Director, retired w.e.f. 5th July, 2010.

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

17. DIRECTORS' RESPONSIBILITY STATEMENT:

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

(a) That in the preparation of the accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review;

(c) That the Directors have taken proper and sufficient care 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;

(d) That the Directors have prepared the accounts for the financial year ended 31st March 2011 on* a 'going concern' basis.

18. ADEQUACY OF INTERNAL CONTROL:

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

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

19. FIXED DEPOSITS:

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

20. STATUS OF REPAYMENT OF LOAN FROM GOI

Due to continuing losses the company has not re-paid principal amount of Rs 787.20 lakhs and interest of Rs 658.58 lakhs as on 31.03.2011.

21. AUDITORS REPORT:

M/s S. Srivastava & Co., Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors of the Company for the year 2010-11. The Statutory Auditors' Report on the Accounts of the Company for the financial year ended 31st March, 2011 alongwith Management replies are enclosed at Annexure-V.

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

22. COST AUDITOR:

Shri R.N. Tripathi, Cost Accountant, Lucknow has been appointed as Cost Auditor of the Company by the Govt, of India, Ministry of Corporate Affairs, for auditing cost records relating to manufacture of Motor Vehicles for the financial year ending 31st March 2011.

"Cost audit report for the year ended at 31st March, 2010 was submitted with the Ministry of Corporate Affairs on 27.09.2010

23. CORPORATE GOVERNANCE:

A certificate from M/s S. Srivastava & Co., Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement alongwith the report on Corporate Governance is attached as Annexure-4 to this report.

24. ACKNOWLEDGEMENT:

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

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

For and on behalf of the Board

Lucknow Ajai Kumar

30th August, 2011 Chairman-cum-Managing Director

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Mar 31, 2010

The Board of Directors of your Company is pleased to present the 38th Annual Report on the business and operations of the Company together with the audited Balance Sheet and Profit and Loss Account and Auditors Report thereon for the financial year ended 31st March, 2010.

1. PRODUCTION REVIEW:

The production performance for the year is shown below in physical terms :

Description 2008-2009 2009-2010

Three wheelers 10,107 12,178

2. SALES REVIEW:

The Sales performance for the year is shown below :

2008-2009 2009-2010

Description Physical Financial Physical Financial (in Nos.) (Rs.in lakhs) (in Nos.) (Rs.in lakhs)

Three Wheelers 11,139 11,872.03 11,720 12,492.07

Spares - 738.88 - 468.03

Petrol,Diesel, Lubricants etc. - 947.30 - 1,024.34

Other Sales - 104.05 - 73.63

TOTAL 13,662.26 - 14,058.07



3. FINANCIAL REVIEW:

The salient features of the Companys financial results for the year under review are as follows:

(Rs. in Lakhs) 2008-2009 2009-2010

a) Profit/(Loss) before Depreciation (2,599.94) (2,637.40)

b) Depreciation 173.91 151.44

c) Profit/(Loss) for the year (2,773.85) (2,788.84)

d) Prior period adjustment 15.18 (11.70)

e) Income Tax - -

f) FBT 6.76 -

Net Profit/(Loss) (PAT) (2,765.43) (2,800.54)

The production and sales performance of the Company improved during the year under report. However the company registered a loss of Rs. 28.01 crores (including extra-ordinary provision of Rs. 5.77 crores on account of enhancement of entitlement limit of gratuity from Rs. 3.5 lacs to Rs. 10 lacs) compared to Rs. 27.65 crores in the previous year.

4. CONTRIBUTION TO NATIONAL EXCHEQUER

The company has contributed a sum of Rs. 2,700.00 lakhs to the exchequer during the period under review.

5. EXPORTS

The company has achieved exports of Rs. 23.71 lakhs during the period under review. The royalty income by way of foreign exchange remittances amounted to Rs. 134.96 lakhs during the year.

16. DIRECTORS:

Shri Ajai Kumar & Shri P. Muthusamy retire by rotation at ensuing annual general meeting and being eligible had offered themselves for re-appointment. The Board commends for their re- appointment at ensuing annual general meeting. Term of Shri S. Chakraborty, Shri P.K. Brahma & Shri S.K. Tripathi, Part time Non official Directors (Independent Directors) completed on 30.01.2010, 07.02.2010 & 05.07.2010 respectively. The Board records the appreciation for contribution made by aforesaid Independent Directors during their association with the Company. The Company has taken up the matter with DHI for filling up the vacant positions on the Board.

17. DIRECTORS RESPONSIBILITY STATEMENT:

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

(a) That in the preparation of the accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review;

(c) That the Directors have taken proper and sufficient care 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;

(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concern basis.

18. ADEQUACY OF INTERNAL CONTROL:

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

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

19. FIXED DEPOSITS:

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

20. STATUS OF REPAYMENT OF LOAN FROM GOI

Due to financial crisis the company has not re-paid principal amount of Rs. 398.80 lakhs and interest of Rs. 228.37 lakhs during the period under review.

21. AUDITORS REPORT:

M/s S. Srivastava & Co., Chartered Accountants have been appointed by the Comptroller and Auditor General of India, as Statutory Auditors of the Company for the year 2009-10. The Statutory Auditors Report on the Accounts of the Company for the financial year ended 31st March, 2010 alongwith Management replies are enclosed at Annexure-lll & V.

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

22. COST AUDITOR:

Shri R.N. Tripathi, Cost Accountant, Lucknow has been appointed as Cost Auditor of the Company by the Govt, of India, Ministry of Corporate Affairs, for auditing cost records relating to manufacture of Motor Vehicles for the financial year ending 31st March 2010.

23. CORPORATE GOVERNANCE:

A certificate from M/s S. Srivastava & Co., Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement alongwith the report on Corporate Governance is attached as Annexure-ll to this report.

24. REFERENCE TO BIFR/BRPSE:

On 18th February, 2010, BIFR has declared the Company as sick industrial company in terms of the provisions of section 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on reference being made after full erosion of the Networth of the Company, as per annual accounts for the year ended at 31st March, 2009. Your Company being a Central PSU has also been referred to BRPSE in addition to BIFR.

The business plan for revival of SIL is under consideration of GOI.

25. ACKNOWLEDGEMENT:

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

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

For and on behalf of the Board

Ajai Kumar Chairman-cum-Managing Director

Place : Lucknow Date : August 27th, 2010