VST Ar 2008

40
th
Annual Report 2007 - 2008
V.S.T. TILLERS TRACTORS LTD.
LORD GANESHA
Idol of Lord Ganesha at VST Tillers Tractors Limited
NOTICE
"NOTICE IS HEREBY GIVEN that the 40th Annual General Meeting of VST TILLERS TRACTORS LTD will be held at Woodlands Hotel Pvt. Ltd. No.5, Rajaram Mohan Roy Road, Bangalore-560 025 on August 29, 2008 at 3.00 P.M. to transact the following business. Ordinary Business: 1. To receive, consider, approve, and adopt the audited Balance Sheet as at March 31, 2008, Profit and Loss account and Cash Flow Statement for the year ended on that date together with the Directors' and Auditors' Report thereon. To declare dividend. To appoint a Director in place of Mr. A. Hishikawa, who retires by rotation and being eligible offers himself for re-appointment To appoint a Director in place of Mr. V. Ramachandran, who retires by rotation and being eligible offers himself for re-appointment. To appoint Auditors and fix their remuneration. b. c. House Rent Allowance - Rs.30,000/- per month. Special Allowance - Rs.9,000/- per month. "RESOLVED FURTHER THAT in the case of absence or inadequacy of profits in any financial year, the above remuneration be paid to the Executive Director as the minimum remuneration." Salary a. Basic Salary - Rs.50,000/- per month in the scale 50,000 - 2,500. Mr. B C S Iyengar be and is hereby appointed as Executive Director of the Company not liable to retire by rotation for a period of five years w.e.f. August 28, 2007 on the remuneration and terms & conditions set out below effective f r o m August 1, 2008: "FURTHER RESOLVED that subject to the overall limits of managerial remuneration fixed by the Companies Act, 1956, the Managing Director of the Company be and is hereby authorized on behalf of the Shareholders to revise the remuneration of Mr. B.C.S. Iyengar suitably as he deems fit whenever the remuneration is revised to the Management Staff of the Company."
2. 3.
4.
5.
SPECIAL BUSINESS: Item No.6 To consider and if thought fit, to pass with or without modification(s) the following resolution as ORDINARY RESOLUTION. "RESOLVED THAT Mr. B C S Iyengar who was appointed as an Additional Director in the Board of Directors meeting held on August 28, 2007, pursuant to provisions of Section 260 of the Companies Act, 1956 and who holds office upto the date of this AGM, be and is hereby appointed as Director of the Company" To consider and if thought fit, to pass with or without modification(s) the following resolution as SPECIAL RESOLUTION. "RESOLVED THAT pursuant to the provisions of Article 29 of the Articles of Association of the Company and Sections 198, 269, 309 and 314 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) and subject to such consents, approvals and permissions as may be required VST TILLERS TRACTORS LTD
PERQUISITES In addition to salary, the following perquisites are allowed and classified into four categories, "A", "B", " C " and " D " as follows :CATEGORY - A a) Furnishing Allowance - Reimbursement upto Rs.25,000/- (Rupees twenty five thousand only) per annum towards furnishing/ repair/ maintenance of own house. Leave Travel Allowance - for self and family once in a year not exceeding two months basic salary. Club Fees - Re-imbursement of monthly club fees for a maximum of two clubs. Medical Insurance Premium for family - subject to a limit of Rs.2,500/- per annum. Note: For the purpose of this Part, "family" means the spouse, dependent children and dependent parents of the Executive Director.
b) c) d)
NOTICE
-
CATEGORY-B a) Contribution to Provident Fund will not be included in the computation of the ceiling on perquisites to the extent it is not taxable under the Income-tax Act. Gratuity payable shall not exceed one half month's salary for each completed year of service subject to a ceiling specified in the Gratuity Act.
and permissions as may be needed Mr. V V Pravindra be and is hereby appointed as the Deputy Managing Director of the Company not liable to retire by
rotation for a period of five years w.e.f. July 28, 2008

on the remuneration and terms & conditions set out below effective from August 1, 2008 : "FURTHER RESOLVED that subject to the overall limits of managerial remuneration fixed by the Companies Act, 1956, the Managing Director of the Company be and is hereby authorized on behalf of the Shareholders to revise the remuneration of Mr. V V Pravindra suitably as he deems fit whenever the remuneration is revised to the Management Staff of the Company" "RESOLVED FURTHER THAT in the case of absence or inadequacy of profits in any financial year, the above remuneration be paid to the Deputy Managing Director as the minimum remuneration" Salary
b)
c)
Earned/Privilege Leave shall be allowed to the Executive Director on full pay and allowances according to the rules of the Company but not more than 34 (thirty four) days leave for every 12 (twelve) months service. However, leave accumulated but not availed of will be allowed to be en-cashed. CATEGORY-C Provision of Car for use on Company's business and telephone at residence will not be considered as perquisites. CATEGORY - D COMMISSION One percent on the net profit of the Company subject to a maximum of the annual basic salary drawn. Item No.7 To consider and if thought fit, to pass with or without modification(s) the following resolution as ORDINARY RESOLUTION. "RESOLVED THAT Mr. V V Pravindra who was appointed as an Additional Director in the Board of Directors meeting held on July 28, 2008, pursuant to provisions of Section 260 of the Companies Act, 1956 and who holds office upto the date of this AGM, be and is hereby appointed as Director of the Company" To consider and if thought fit, to pass with or without modification(s) the following resolution as SPECIAL RESOLUTION. "RESOLVED THAT pursuant to the provisions of Article 29 of the Articles of Association of the Company and Sections 198, 269, 309 and 314 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) and subject to such consents, approvals
a. b. c.
Basic Salary - Rs.45,000/- per month in the scale 45,000 - 2,500. House Rent Allowance - Rs.30,000/- per month. Special Allowance - Rs.9,000/- per month.
PERQUISITES In addition to salary, the following perquisites are allowed and classified to four categories, "A", "B", " C " and " D " as follows:CATEGORY - A a) Furnishing Allowance - Reimbursement upto Rs.25,000/- (Rupees twenty five thousand only) per annum towards furnishing/ repair/ maintenance of own house. Leave Travel Allowance - for self and family once in a year not exceeding two months basic salary. Club Fees - Re-imbursement of monthly club fees at actuals for a maximum of two clubs. Medical Insurance Premium for family - subject to a limit of Rs.2,500/- per annum.
b) c) d)
Note: For the purpose of this Part, "family" means the spouse, and dependent children of the Deputy Managing Director.
VST TILLERS TRACTORS LTD
NOTICE
CATEGORY - B a) Contribution to Provident Fund will not be included in the computation of the ceiling on perquisites to the extent it is not taxable under the Income-tax Act. Gratuity payable shall not exceed one half month's salary for each completed year of service subject to a ceiling specified in the Gratuity Act. Earned/Privilege Leave shall be allowed to the Deputy Managing Director on full pay and allowances according to the rules of the Company but not more than 34 (thirty four) days leave for every 12 (twelve) months service. However, leave accumulated but not availed of will be allowed to be en-cashed. 6. August 22, 2008 to August 31, 2008 (both days inclusive) in connection with Annual General Meeting. 5. Dividend if declared shall be payable to all those members whose names appear in the register of members or to the beneficial owners as per the records of the depositories, at the closing of business hours on August 21, 2008. Members desirous of obtaining any information on the annual accounts are requested to write to the Company at an early date to facilitate compilation and dissemination of the same at the AGM.
b)
c)
By the Order of the Board for VST TILLERS TRACTORS LTD. Sd/Place: Bangalore Date: June 28, 2008 Subash B K Company Secretary
CATEGORY-C Provision of Car for use on Company's business, telephone and other communication facilities at residence will not be considered as perquisites. CATEGORY - D COMMISSION One percent on the net profit of the Company subject to a maximum of the annual basic salary drawn.
EXPLANATORY STATEMENT AS PER SECTION 173(2) OF COMPANIES ACT, 1956 Item No. 6 Mr. B C S Iyengar was appointed as an Additional Director of the Company by the Board of Directors w.e.f. August 28, 2007. Pursuant to Section 260 of the Companies Act, 1956, Mr. B C S Iyengar holds office only up to the Annual General Meeting. As required under Section 257 of the said Act, a notice has been received from a member along with deposit of Rs. 500/- signifying his intention to propose Mr. B C S Iyengar as a candidate for the office of Director. The Board of Directors had also appointed Mr. B C S Iyengar as an Executive Director of the Company for a period of 5 years effective from August 28, 2007 subject to the approval of the shareholders of the Company. As per the provisions of Section 198, 269, 309 and 314 read with Schedule XIII to the Companies Act, 1956, the appointment of and remuneration to Executive Director requires the approval of the shareholders in General Meeting by way of a special resolution.
NOTES: 1. A MEMBER ENTITLED TO ATTEND A N D VOTE IS ENTITLED TO APPOINT A PROXY TO A T T E N D A N D VOTE INSTEAD OF HIMSELF A N D PROXY NEED N O T BE A MEMBER OF THE COMPANY. The proxies to be effective, should be deposited at the Registered Office of the Company not later than 48 hours before the commencement of the meeting. The relative Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956 in respect of Special Business under item no. 6 & 7 is annexed hereto. The Register of Members and Share Transfer Books of the Company will be closed from
2.
3.
4.
NOTICE
The Board of Directors recommends the resolutions for approval as set out under item no.6. None of the Directors except Mr. B C S Iyengar, is concerned or interested in the said resolution. The Explanatory Statement together with the accompanying notice may also be regarded as an abstract of the terms of appointment of Mr. B C S Iyengar, Executive Director of the Company and Memorandum of interest of Directors u/s. 302 of the Companies Act, 1956. (1) Background Details - Mr. B C S Iyengar, aged 58 years, is a Chartered Accountant and has been associated with the Company in various capacities for over 29 years. Past remuneration Remuneration in the capacity as Vice President was Rs. 12,24,564/- CTC (3) Job profile and his suitability - Subject to the superintendence, direction and control of the Board, the day to day administration of the Company would be vested with the Executive Director. Owing to his association for over 29 years in various capacities and also being in-charge of finance and marketing Mr. B. C. S. Iyengar is suitable for the post of Executive Director. (4) Remuneration proposed - as set out in the resolution for the item no. 6. The remuneration to Executive Director has the approval of the Board of Directors. Comparative remuneration profile with respect to industry, size of the company, profile of the position and person - Taking into consideration the size of the Company, the profile of Mr. B. C. S. Iyengar, the responsibilities shouldered by him, the aforesaid remuneration package is commensurate with the remuneration package paid to managerial position in other Companies. Besides, the remuneration proposed, Mr. B. C. S. Iyengar does not have any other pecuniary relationship with the Company. (2) along with a deposit of Rs.500/-proposing the candidature of Mr. V V Pravindra for the office of Director. As per the provisions of Section 198, 269, 309 and 314 read with Schedule XIII to the Companies Act, 1956, the appointment of and remuneration to Deputy Managing Director requires the approval of the shareholders in General Meeting by way of a special resolution. The Board of Directors recommends the resolutions for approval as set out under item no.7 None of the Directors except Mr. V V Pravindra, is concerned or interested in the said resolution. The Explanatory Statement together with the accompanying notice may also be regarded as an abstract of the terms of appointment of Mr. V V Pravindra, Deputy Managing Director of the Company and Memorandum of interest of Directors u/s. 302 of the Companies Act, 1956. (I) Background Details - Mr. V V Pravindra, aged 43 years, is a Commerce graduate. After an initial training with a Chartered Accountant firm he undertook to independently manage VST Auto Anciilaries Pvt. Ltd., (a VST group Company) supplying parts to the Company. During the year 1996 he was appointed as Executive coordinator and subsequently elevated to the post of Vice-President, Business Development in the year 2004. Past remuneration Remuneration in the capacity as Vice President was Rs.12,08,292/- CTC. (3) Job profile and his suitability - Subject to the superintendence, direction and control of the Board, Mr. V V Pravindra shall broad base administrative operations, corporate policies and responsibilities of the Company including its overall development. In consideration to his contributions for the past 12 years in various capacities and also as head of Business Development and considering his varied experience in the aforementioned capacities, he stands apt for the post of Deputy Managing Director.
(2)
(5)
(6)
Iterm No. 7 The Company has received a notice in writing from a member under section 257 of Companies Act, 1956
NOTICE
(4) Remuneration proposed - as set out in the resolution for the Item No.7. The remuneration to Deputy Managing Director has the approval of the Board of Directors. Comparative remuneration profile with respect to industry, size of the company, profile of the position and person - Taking into consideration the size of the Company, the profile of Mr. V V Pravindra, the responsibilities shouldered by him, the aforesaid remuneration package is commensurate with the remuneration package paid to managerial position in other Companies. Besides, the remuneration proposed, Mr. V V Pravindra also belongs to the promoter group.
(5)
(6)
V S T TILLERS T R A C T O R S L T D
Board of Directors
Mr. V.K. Surendra - Chairman Mr. A. Hishikawa Mr. K. Tanaka - Alternate to A. Hishikawa Mr. R. Subramanian Mr. M.K. Bannerjee Mr. V. Ramachandran Mr. V.P. Mahendra - Managing Director Mr. B.C.S. Iyengar - Executive Director
Company Secretary and Compliance Officer Auditors
Mr. Subash B.K. M/s. Brahmayya & Company 10/2, Khivraj Mansion, Kasturba Road, Bangalore - 560 001 M/s. Rao, Murthy & Associates No.23/33, Surveyor's Street Basavanagudi, Bangalore - 560 004 M/s. Canara Bank M/s. State Bank of India M/s. Canbank Factors Limited M/s. AZB & Partners 67-4, 4th Cross, Lavelle Road Bangalore - 560 001 Plot No.I, Dyavasandra Industrial Layout, P.B.No.4801, Whitefield Road, Mahadevapura Post, Bangalore - 560 048
Cost Auditors
Bankers
Legal Advisers
Regd. Office
INFORMATION REQUEST TO MEMBERS 1. Please bring your copy of the Annual Report to the meeting as no extra copies will be distributed owing to limited number of copies printed. 2. 3. Members are requested to send their queries, if any, relating to the annual accounts and reports at least one week prior to the date of meeting to facilitate computation of information. Members/their proxies/representatives are advised to bring their Attendance Slip duly filled in for attending the meeting. An Attendance Slip and Proxy form are attached at the end of this Annual Report
Information as required under clause 49 (IV)(G) of the Listing Agreement Brief resume of Directors seeking Appointment / Re-appointment Particulars Date of Birth & Age Appointment on Qualifications Expertise in specific functional Areas Mr. A. Hishikawa 10/09/1951 & 57 Years 27/06/2003 Masters Degree, Tokyo Institute of Technology Senior General Manager of General Machinery & Special Vehicle Headquarters. He takes a role of business management of Engine and Turbocharger in Japan and worldwide. Mr. V. Ramachandran 26/01/1948 & 60 Years 29/01/2004 Bachelor of Engineering 34 years of experience in Auto Component Industry, evolving long-term strategies and plans, investment decisions and formulating management policies. He was Vice Chairman and Managing Director of Kar Mobiles Ltd., Bangalore. He is Chairman, Southern Region of Auto Component Manufacture's Association.
By the Order of the Board for VST TILLERS TRACTORS LTD. Place: Bangalore Date: June 28, 2008 Annual Report 2007 - 2008
Subash B K
Company Secretary 2
ABSTRACT OF VARIATION IN THE TERMS OF C O N T R A C T W I T H THE M A N A G I N G D I R E C T O R P U R S U A N T T O S E C T I O N 302 O F T H E C O M P A N I E S A C T , 1956. Mr. V R Mahendra was re-appointed as Managing Director at the 36th Annual General Meeting of the Company held on September 3, 2004 for a further period of 5 years w.e.f. February 20, 2004. The Share Holders had authorised the Board of Directors to revise the remuneration of the Managing Director on behalf of the Company on a time scale or whenever the circumstances rendered it desirable. Accordingly, the Board of Directors in its meeting held on July 28, 2008 has revised the remuneration payable to Managing Director with effect from August 1, 2008 by passing the following resolutions: "RESOLVED T H A T subject to provisions of Sections 198, 269, 309 and 311 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modification or re-enactment thereof for the time being in force) the pay scale Mr. V. P.Mahendra, Managing Director be and is hereby revised as per the Terms & Conditions set out below: SALARY Rs. 1,00,000/- per month in the scale of Rs. 1,00,000 5000. PERQUISITES In addition to salary, the following perquisites are allowed and classified into four categories, "A", "B", "C" and " D " as follows:CATEGORY - A a) Medical Reimbursement - Expenses incurred for self and family subject to a ceiling of one month's salary per year or three months' salary over a period of three years. Leave Travel Allowance - for self and family once in a year not exceeding two months basic salary. Club Fees - Re-imbursement of monthly club fees for a maximum of two clubs. Medical Insurance Premium for Spouse & Children: Actuals subject to a limit of Rs.5,000/ - per annum. Furnishing & Other Allowance - Reimbursement upto Rs.50,000/- (Rupees fifty thousand only) per annum or Rs.2,00,000/- (Rupees two lakhs only) 3 over a period of four years towards furnishing/ repair/ maintenance of own house. e) Fuel Allowance for car: To & Fro from Residence to Office on actual basis.
Note: For the purpose of this Part, "family" means the spouse, dependent children, and dependent parents of the Managing Director. CATEGORY - B a) Contribution to Provident Fund will not be included in the computation of the ceiling on perquisites to the extent it is not taxable under the Income-tax Act. Gratuity payable shall not exceed one half month's salary for each completed year of service subject to a ceiling specified in the Gratuity Act. Earned/Privilege Leave shall be allowed to the Managing Director on full pay and allowances according to the rules of the Company but not more than 37 (thirty seven) days leave for every 12 (twelve) months service. However, leave accumulated but not availed of will be allowed to be en-cashed.
b)
c)
CATEGORY - C Provision of Car for use on Company's business and telephone at residence will not be considered as perquisites. CATEGORY - D COMMISSION One percent on the net profit of the Company subject to a maximum of one and half times annual salary drawn. "RESOLVED FURTHER T H A T in the case of absence or inadequacy of profits in any financial year, the above remuneration be paid to the Deputy Managing Director as the minimum remuneration." By the Order of the Board for V S T TILLERS T R A C T O R S L T D . Place: Bangalore Date: June 28, 2008
b) c) d)
e)
Subash B K
Company Secretary
Contents ....
Directors' Report Report on Corporate Governance Auditors' Report Balance Sheet Profit and Loss Account Schedules Notes forming part of Accounts Balance Sheet Abstract Cash Flow Statement 6 14 20 24 25 26 33 43 44
FINANCIAL INDICATORS
DIRECTORS' REPORT
Dear Shareholders, Your Directors place on record by paying tribute and homage to a great soul who was closely associated with your Company since its inception - our beloved Founder Shri V T Velu. He gave inspiration and guidance to your Company through its formative years and led the organization during difficult and joyous times. His passing away leaves a vacuum that will always be felt in your Company and the business fratenity in general. Your Directors are pleased to present the 40th Annual Report and the Audited Statement of Accounts for the year ended March 31, 2008. FINANCIAL PERFORMANCE Period TURNOVER OTHER INCOME TOTAL INCOME PROFIT BEFORE DEPRECIATION & INTEREST INTEREST DEPRECIATION PROFIT BEFORE TAX INCOME TAX PROFIT AFTER TAX BALANCE B/F SURPLUS AVAILABLE FOR APPROPRIATION TO: DIVIDEND TAX ON DIVIDEND TRANSFER TO GENERAL RESERVE BALANCE CARRIED FORWARD COMPANY'S PERFORMANCE During the year under review your company continued to make progress over the previous year by selling over 12000 Tillers, a new milestone and consolidating its market position in the power tiller industry. The turnover for the year increased by 16% from Rs 162 crores in 2006-07 to Rs. 188.58 crores in 2007-08 while the operating profit rose to Rs. 22.90 crores compared to Rs 20.74 crores in the previous year mainly due to higher capacity utilization for power tillers and tractors. However higher operating expenses incurred to support growth had an impact on operating profit margins. Despite increase in price of steel products and other inputs, your company has achieved satisfactory results. The Precision Components Division has also improved its exports and contributed to the overall increase in profitability Annual Report 2007 - 2008 of your Company. Consequently, earnings per share increased from Rs. 21.79 to Rs. 25.01 and your company continues to remain debt free while short term borrowings were limited to only need based working capital requirements. The sale of Power Tillers during the year increased to 12174 units as against the previous year's sales of 10510 units an increase of 16%. Sale of Chinese make power tillers under the brand name "Dragon" has been encouraging and our strategy to expand market share across, the country is well positioned. The Company's Tractor sales have grown to 1714 units as against 1537 units in the previous year. Your Company sold 76 Rice Transplanters in the rice growing belts in India, which is slowly shifting in favor of these machines to overcome manpower shortage and reduce costs. Year 2007-08 18,858 278 19,136 2,569 53 290 2,226 786 1,440 777 2,217 288 49 1,000 880 (Rupees in lacs) Year 2006-07 16,228 211 16,439 2,283 45 273 1,965 710 1,255 541 1,796 230 39 750 777
DIRECTORS' REPORT
The Precision Component Division's performance has been encouraging despite the continuous increase in cost of various grades of steel which has resulted in reduced margins on exports. The growth in profitability of this division is dependent on overseas customers accepting an upward revision in price, in line with raw material increase. DEPB benefits from exports were availed on higher rates during the year, which has contributed to higher profits from this division. During the year, TS 16949 re-certification for quality standards has been obtained this being essential to develop new customers in the automotive field. DIVIDEND: Your Directors have pleasure in recommending a dividend of Rs. 5/- per equity share of Rs. 10/- each for approval at the Annual General Meeting. The dividend if declared will result in an outflow of Rs.337 lacs including the distribution tax. DIRECTORS: In accordance with the provisions of the Companies Act, 1956 and Articles of Association, Mr. A. Hishikawa and Mr. V Ramachandran, Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment. Consequent to withdrawal of Nomination by MITSUBISHI AGRICULTURAL M A C H I N E R Y C O . LTD. Mr. M. Tanaka, has ceased to be on the Board of the Company w.e.f. July 28, 2008. Your Directors place on record their sincere appreciation for the contribution of Mr. M. Tanaka during his tenure as Director of the Company. At the Board Meeting held on August 28, 2007, Mr. B C S Iyengar, has been co-opted on the Board of the Company and designated as Executive Director for a period of 5 years. At the Board Meeting held on July 28, 2008, Mr. V V Pravindra, has been co-opted on the Board of the Company and designated as Deputy Managing Director for a period of 5 years. Both the appointments and remuneration payable to them are subject to the approval of the shareholders at the forthcoming Annual General Meeting on the terms and conditions as set out in the Notice of the Meeting. The attention of the Members is invited to Item no. 6 & 7 of the Notice and the Explanatory Statement attached thereto. CORPORATE GOVERNANCE:
The Company strives to ensure highest standards in Corporate Governance and levels of transparency and has been compliant with all the provisions of Clause49 of the Listing Agreement. A certificate from the Auditors to this effect forms part of Corporate Governance Report. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to sec 217(2AA) of the Companies Act 1956, amended as per Companies (Amendment) Act 2000, the Directors confirm that: In preparation of the Annual Accounts of your Company the Accounting Standards laid down by the Institute of Chartered Accountants of India from time to time have been followed. Appropriate Accounting policies have been selected and applied consistently, and reasonable and prudent judgment and estimates have been made so as to ensure that the accounts give a true and fair view of affairs of your Company as at March 3 1 , 2008 and the profits of your Company for the year ended March 31, 2008. Proper and sufficient care has been taken for the maintenance of appropriate accounting records in accordance with the provisions of the act for safeguarding the assets of your Company and for preventing and detecting frauds and other irregularities. The annual accounts have been prepared on a going concern basis. The observations of Auditors in their report to Members have been adequately dealt with in the relevant notes to accounts. Hence no additional explanation is considered necessary. AUDITORS: M/s. Brahmayya & Company, Chartered Accountants, retire as Auditors of the Company at the conclusion of 40th Annual General Meeting and are eligible for re-appointment.
DIRECTORS' REPORT
PARTICULARS OF EMPLOYEES: As required by provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who draw remuneration as set out in the aforesaid provision of the Companies Act. CONSERVATION OF ENERGY, TECHNOLOGY A B S O R P T I O N A N D FOREIGN EXCHANGE EARNINGS A N D OUTGO: Information under Section 217(I)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March 2008 is enclosed as Annexure 7. FIXED DEPOSITS: Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956 and rules made there under. MANAGEMENT DISCUSSION A N D ANALYSIS Industry structure and developments: Although the fiscal year 2007-08 commenced on a good note, the economic environment in the second half of the year turned out to be difficult. GDP growth was initially expected to grow 8.7% in fiscal 2007-08. However with a slowdown in the industrial sector as well as the impact of high interest rates a GDP growth of around 8% is likely to emanate. The agricultural sector slowed down in the backdrop of difficulties coupled with high interest rates. The Power Tiller industry, which is growing at around 20% per annum largely, relies on Government subsidies and agricultural lending by banks. The recent waiver of loans announced in the Budget to small and marginal farmers is sending mixed signals to the tractor and power tiller sector as loans have been temporarily stalled following mounting non-performing assets of banks. Farmers who have repaid in time have been sidelined as they have been left out due to this waiver. Delay in the government-releasing subsidy in some States, has left the industry exposed to higher levels of credit risk in the long term. Your Company is working closely with various Government sponsored schemes to capitalize on the potential demand in the paddy growing belts of the country. The Power Tillers being imported from China by smaller players has seen robust growth during the year and is posing a challenge to your company in its endeavor to protect its market share. In the Tractor segment, the industry as a whole declined marginally to 346501 units from 352781 units in the previous year. The tractor industry is segmented between 25hp, 35hp and 45hp which are catered to by most of the manufacturers. Your Company caters to the < 20HP tractor segment and continues to maintain a niche market share in Maharashtra and Gujarat. Sale of tractors in this segment is expected to grow in the coming years with the opening up of new markets. OPPORTUNITIES The growth of the Power tiller and Tractor industry could be directly linked to the 8% GDP growth of the Indian economy in 2007-08. Agriculture, which is slated to register a positive growth of 3%, will benefit farm mechanization and provide opportunities for higher sales and optimum utilization of capacities. With the advent of urbanization and consequent rise in wages in the farm sector augurs well for your Company's products. NABARD has increased its allocation of credit for agricultural machinery through various schemes and the central subsidy has been enhanced to support the critical role of agriculture in the economy. The market penetration for power tillers in India is low compared to countries like China and Bangladesh. However scope for expanding business through strong marketing initiatives certainly exists. With the Government's decision to increase spending on rural employment in the budget for the year 200809, this industry is expected to post better growth. Presently, lack of remunerative price for crops is forcing the farmers to sell food grains at a loss. A higher Minimum Support Price fixed by the Central Government for rice and wheat will result in better
price realization and hence greater opportunities to

increase sales of your company's products. 8
DIRECTORS' REPORT
RISKS A N D C O N C E R N S With the amendment to CMVR rules by the Ministry of Surface Transport, the power tillers has been subjected to extensive compliances in respect of road safety though the basic design does not support these features. Representations by manufacturers have been forwarded to the Government to exempt power tillers wholly used for agricultural operations with features that are impractical. With respect to tractors the key factor that affects demand is institutional credit, which has declined due to high defaults. In addition, interest rates have been increasing which could have an impact on demand. Monsoons plays a significant role in agriculture and water is the primary factor that determines farm production and consequently has a bearing on demand for your company's products. Protecting our market share and margins in the face of The continuous increase in oil price is a cause for concern as it forms a major operating cost for agricultural machinery. During the year international crude touched an unprecedented levels, which could lead to lower demand for your company's products. There are continuing concerns on input cost increases particularly steel and rubber. In a competitive market, your company may not be able to pass on the cost increases fully. Hence, margins may come under pressure. The appreciation of Rupee against the Euro and Pound Sterling for most part of the financial year 2007-08 in addition to the constant increase in raw material prices impacted the margins of Precision Components Division. Presently due to a better exchange rate, this division is expected to maintain its performance. CURRENT YEAR O U T L O O K Your Company envisages the growth outlook for 200809 to be positive. The Government's continued thrust on agriculture will help the economy in general and the farm community in particular and your Company expects improved sales through out the year. The Central subsidy has been increased on power tillers The Precision Component Division (PCD) derives over 4 0 % of its revenue through sale of machined connecting rods and crankshafts to overseas customers. This division's performance continues to be challenging due to lack of consistency in orders. This segment faces competition from China which is a low cost producer of forgings on account of huge investments in increasing capacities in this sector. In PCD, forgings constitute a major portion of raw material used for machining. Initiatives taken to improve efficiency and optimum use of machinery are expected to contribute to better revenue streams. As a conscious strategy of expanding the range of business, your company as in the earlier years believed in focusing on marketing Rice Transplanters. The efforts are translating into better opportunities in various rice growing belts to market this labour saving machine, which requires considerably less time than manual transplanting. continued increase in price of raw materials and steel products will be the key challenge for business in 2008-09 as competition from Chinese made tillers is rapidly making in roads. and the Government has given thrust in the 11th Five Year Plan through schemes like Rashtriya Krishi Vikas Yojana, Integrated Tribal Development, National Food Security Scheme and Macro Management Scheme. However subsidy dues from the Government continue to be of concern on out standings and efforts to realize the same are being taken. To augment existing capacity, investments are being made to create requisite infrastructure for both power tillers and tractors to cater the growth in the market. During the first half of the year, overall turnover is expected to show an improvement. Other measurers such as changing the existing production layout and better utilization of machines are being planned. The Supply Chain function is being strengthened in line with increase in capacities. The full benefit of these measurers will accrue in the coming years.
DIRECTORS' REPORT
Internal Control Systems Your Company maintains adequate internal control system, which provides reasonable assurance that transactions in significant areas are monitored to prevent any misuse. To strengthen this area your Company is looking at improved responsiveness from a fully integrated ERP. The present system is being revamped to improve its capability and speed of information to add more value. The Internal auditors carry out audits on a regular basis and submit their report once in a quarter to the Audit Committee. The Audit Committee reviews the report and recommendations of the Internal Auditors and advises the Management to strengthen and streamline the system wherever required. Industrial Relation Industrial relations have been cordial across all the plants during the year. Your Company is continuously taking initiatives for building organizational capabilities and enhancing people productivity. Various training and development programs were offered to the managerial cadre to upgrade their skills and develop the human resource base. Your company is continuously developing apprentices and trainees across various departments to cultivate new talent. Steps are being implemented to strengthen specific areas that are considered key to the Company achieving its business goals. Forward-Looking Statements Statements in this release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those either expressed or implied due to factors such as Raw material prices, Government policies, Competition, tax regime, market acceptance of new products and services, continued acceptance of existing products and services, changes in licensing programs, product price discounts, delays in product development and related product release schedules, sales channel disruption. All information in this release is as of June 28, 2008. The company undertakes no duty to update any forward-looking statement to conform to actual results or changes in the company's expectations. Annual Report 2007 - 2008 10 ACKNOWLEDGEMENTS: The Directors wish to convey their gratitude for the faith reposed in your Company by Mitsubishi Heavy Industries Limited, Mitsubishi Agricultural Machinery Company Limited, the financial institutions, employees and the customers at large.
For and on behalf of the Board Sd/Place: Bangalore Date : June 28, 2008 V. K. Surendra Chairman
DIRECTORS' REPORT ANNEXURE

Information under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March 2008. 1. Conservation of energy: As the industry is not a power intensive unit, no capital investment was made and hence no benefit could accrue. 2. A. Research and D e v e l o p m e n t ( R & D ) : a. Technology up gradation of VST 130DI and V W H 120 Engines to meet latest Trem III emission norms has been Completed and approved by A u t o m o t i v e Research Association of India. b. VST Shakti 130DI and Mitsubishi Shakti Power Tillers have been upgraded to meet latest Central Motor Vehical Rules (CMVR) norms and approved by Central Farm Machinery Training & Testing Institute (CFMTTI), Budni. c. SI 100 A 2 N engine which is the prime mover for Dragon Power Tiller upgraded to meet latest T R E M III emission norms and approval from ARAI obtained. d. Dragon Power Tiller upgraded to meet latest CMVR norms and approved by C F M T T I , Budni. e. Small Power Weeder taken up for testing and approval with testing agency to make it available under subsidy schemes. B. Technology Absorption: a. Technology absorption through up gradation of 3D software at Product Development to the latest version. C. a. Benefits derived : Software up gradation has enhanced the product design skills. D. a. Expenditure on R & D : The Company's expenditure on R&D (including capital expenditure) during the year was Rs. 41,98,182/Future plan of action :
E.
a. Cost effective and latest technology engine under development for Power tiller application. b. Higher horsepower engine for Tractor initial feasibility study completed and further adaptation activity under progress. 3. Foreign Exchange Earnings and O u t g o : a) Complete information about exports, which have contributed towards foreign exchange earnings, is given in Para 6(f) of the Schedule 19 to the Audited Accounts annexed to this Report. Similarly, details of foreign exchange outgo on account of imports, expenditure on travelling, dividend etc. are shown in Para No.5(e), 5(f) and 5(h) respectively in Schedule 19, i.e., in Notes forming part of Accounts. b) Total foreign exchange used and earned : Foreign exchange earnings: Rs. 17,82,75,880/Foreign exchange outgo: Rs.6,47,96,638/-
11
DIRECTORS' REPORT
CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION
To, The Board of Directors VST TILLERS TRACTORS LTD We, the undersigned, in our respective capacities as Chief Executive Officer and Chief Financial Officer of VST Tillers Tractors Limited ("the Company"), to the best of our knowledge and belief certify that: (a) We have reviewed the financial statements and the cash flow statement for the year ended on March 31, 2008 and based on our knowledge and belief, we state that: (i) (ii) These statements do not contain any materially untrue statement or omit any material fact or contain any statement that might be misleading; These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws, and regulations.
(b)
We further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during the year, which are fraudulent, illegal, or violative of the Company's code of conduct. We hereby declare that all the members of the Board of Directors and Management Committee have confirmed compliance with the Code of Conduct as adopted by the Company.
(c)
We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee: (i) (ii) (iii) Significant changes, if any, in the internal control over financial reporting during the year; Significant changes, if any, in the accounting policies made during the year and that the same has been disclosed in the notes to the financial statements; and Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having significant role in the Company's internal control system over financial reporting. R. Thiyagarajan Chief Financial Officer
(d)
V. P. Mahendra Managing Director Bangalore, June 28, 2008
12
Auditors' Certificate on Compliance with the conditions of Corporate Governance under Clause 49 of the listing Agreement(s)
To the Members, VST Tillers Tractors Limited We have examined the Compliance conditions of Corporate Governance of V.S.T Tillers Tractors Limited for the year ended on 31st March, 2008, as stipulated in clause 49 of the listing Agreement of the said Company with stock exchange in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our responsibility has been limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Brahmayya & Co., Chartered Accountants Sd/G. Srinivas (Partner) Membership No. 086761
Place : Bangalore Date : 28th June, 2008
1 3
REPORT ON CORPORATE GOVERNANCE

CORPORATE GOVERNANCE Your Company believes that, corporate governance is the relationship between corporate managers, directors, and the providers of equity, people, and institutions who save and invest their capital to earn a return. It ensures that the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations. BOARD OF DIRECTORS: (a) Composition of the Board: The Board comprises of eight Directors and is headed by a Non-Executive Chairman, three whole-time Directors and five Non-Executive Directors. The composition and category, the attendance at Board Meetings and last AGM, number of Directorships and Chairmanship / Membership of Committees in other Companies is as follows: Name of the Director Messers. V. K. Surendra V. T. Velu * A. Hishikawa K. Tanaka (Alternate A. Hishikawa) M. Tanaka R. Subramanian M. K. Bannerjee V. Ramachandran V. P. Mahendra A. T. Nahender * B C S Iyengar ** Category of Directorship Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive / Independent Non-Executive/ Independent Non-Executive/ Independent Managing Director Director (Operations) Executive Director No. of Board Meetings attended 6 Attendance at the last AGM YES NO NO NO NO YES YES YES YES No. of other companies in which Director 2 2 1 1 1 1 No. of other Board committee in which member
The keys to creating wealth and maintaining a free society lie primarily in the same direction. Both require that broad based systems of accountability be built into the governance structures of corporations themselves More vigilant shareowners are also more likely to be "socially responsible," in the true meaning have that term, increasing triple bottom line returns (adding economic, environmental and social value). Actively involved owners are likely to help find solutions to many corporate challenges.
1 3
2 1
6 6 6 7 4 1
3 5
* Vacation of office due to demise ** Co-opted in the Board Meeting held on 28-08-2007 Details of Board Meetings: During the year under review the Board met seven times on April 28, 2007, June 21, 2007, July 27, 2007, July 28, 2007, August 28, 2007, October 26, 2007 and January 29, 2008. Annual Report 2007 - 2008 14
CORPORATE GOVERNANCE
(b) Board Procedures: The Chairman of the Board, in consultation with the other members of the Board, shall determine the timing and length of the meetings of the Board. The Board expects that five regular meetings at appropriate intervals are in general desirable for the performance of the Board's responsibilities. In addition to regularly scheduled meetings, unscheduled Board meetings may be called upon appropriate notice at any time to address specific needs of the Company. The Chairman shall establish the agenda for each Board meeting. Each Director shall be entitled to suggest the inclusion of items on the agenda, request the presence of or a report by any member of the Company's senior management, or at any Board meeting raise subjects that are not on the agenda for that meeting. The agend as for Board meetings shall provide opportunities for the operating heads of all the departments of the C o m p a n y to make presentations to the Board during the course of the year. At one meeting each year the Board shall be presented the long-term strategic plan for the Company and the principal issues that the Company expects to face in the future. Sufficient time shall be allocated for this presentation to allow for questions by and full discussion with the members of the Board. Information provided to the Board includes amongst others quarterly results of the Company, Minutes of Audit and other Committees, information on recruitment and remuneration of senior officers just below the Board, review of annual operating plans and compliance report. c) Code of Conduct: The Company has a formulated and implemented Code of Conduct for Board Members and Senior Management of the Company in compliance with Clause 49 ( I ) (D) of the Listing Agreement and the same is displayed on Company's web-site www.vsttillers.com
The certificate by CEO of the Company on compliance with the code of conduct is given below: To, The Board of Directors, VST TILLERS TRACTORS LTD It is hereby confirmed that the Directors and Senior Management have duly complied with the code of conduct laid down by the Company during the financial year ending March 31, 2008. Place: Bangalore Date: June 28, 2008 V P Mahendra Managing Director COMMITTEES OF THE BOARD: Audit Committee A key element in the corporate governance process of any organization is its audit committee. The battle for financial statement integrity and reliability depends on balancing the pressures of multiple stakeholders, including management, regulators, investors, and the public interest. Composition The membership of the Committee consists of at least t h r e e directors, all of w h o m shall m e e t the
Committee
Meetings
Each Committee Chair, after consultation with the Chairman of the Board, shall establish agend as and set meetings at the frequency and length appropriate and necessary to carry out the C o m m i t t e e ' s responsibilities. Any Director who is not a member of a particular Committee may attend any Committee meeting with the concurrence of the Committee Chair or a majority of the members of the Committee.
1 5
independence requirements established by the Securities and Exchange Board of India and applicable laws, regulations and listing requirements. Each member shall in the judgment of the Board have the ability to read and understand fundamental financial statements. At least one member of the Committee shall in the judgment of the Board be an "audit committee financial expert". At present the Audit Committee comprises of all the three independent Directors of the Company. Terms of Reference: The Audit Committee of the Board of Directors assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and reporting practices of Details of Audit Committee Meetings: During the year under review the Audit Committee met six times on April 28, 2007, June 21, 2007, July 28, 2007, August 28, 2007, October 26, 2007 and January 29, 2008. SI.No. 1 2 3 Name of the Member Mr. R. Subramanian Mr. V. Ramachandran Mr. M. K. Bannerjee Designation Chairman Member Member Attended 5 5 5 the Company, and such other duties as directed by the Board. The Committee's purpose is to oversee the accounting and financial reporting processes of the Company, the audits of the Company's financial statements, the qualifications of the Statutory Auditors engaged as the Company's independent auditor to prepare or issue an audit report on the financial statements of the Company, and the performance of the Company's internal and independent auditors. The Committee's role includes a particular focus on the qualitative aspects of financial reporting to shareholders, the Company's processes to manage business and financial risk, and compliance with significant applicable legal, ethical, and regulatory requirements. The Committee is directly responsible for the appointment, compensation, retention, and oversight of the Company's independent auditor.
SHAREHOLDERS / INVESTOR GRIEVENCES COMMITTEE The current composition of the Committee is Mr. V. Ramachandran (Chairman) and Mr. V. P. Mahendra. The Committee meets to approve transfer / transmission of shares and issue of duplicate share certificates. The Committee also looks into investor complaints like non-receipt of Annual Report, Dividend revalidation etc., The Committee approved transfer / transmission and issue of duplicate share certificates on 14 occasions during the year under review. Mr. Subash B K, Company Secretary and Compliance Officer can be contacted: Subash B K, No.1, Dyavasandra Indl. Layout, P.B. No.4801, Whitefield Road, Mahadevapura Post, Bangalore - 560 048 Ph. No.28510805 / 6 / 7 Fax No.28510221 E-mail: subash@vttlhq.com Annual Report 2007 - 2008
REMUNERATION COMMITTEE: INSIDER TRADING REGULATIONS: The Company has prescribed code of conduct and disclosure practice to prevent insider trading. DIRECTORS REMUNERATION The non-executive Directors are not paid any remuneration other than the sitting fees which is within the limits prescribed by Rule 10B of Companies (Central Government's) General Rules and Forms. The details of remuneration paid to executive Directors are provided under Clause L of Schedule 20 of the Notes forming part of accounts. MEANS OF COMMUNICATION: The outcome of the Board Meeting, quarterly and annual financial results are sent to Stock Exchanges immediately after the Board approves these. The intimation of date of Board Meeting and quarterly and annual financial results are also published in leading newspapers.
16
DISTRIBUTION SCHEDULE OF SHAREHOLDINGS AS ON 31ST MARCH 2008 Category Upto 5,001 10,001 20,001 30,001 40,001 50,001 5,000 10,000 20,000 30,000 40,000 50,000 1,00,000 No. of Shareholders 4209 343 174 55 27 35 32 61 4936 % to total No. of shareholders 85.27 6.95 3.53 1.11 0.55 0.71 0.65 1.24 100.00 Shares Amount (Rs.) 5656240 2738810 2642790 1406650 955200 1652900 2245260 40299000 5,759,6850 % to total shares amount 9.82 4.76 4.59 2.44 1.66 2.87 3.90 69.97 100.00
1,00,001 and above Total
DETAILS OF REQUEST/COMPLAINTS RECEIVED DURING THE YEAR 07 - 08. Nature of Request Change of Address Bank Mandate Revalidation of Warrants Duplicate share certificates Transfer/Transmission De-materialisation Re-materialisation OB Received 28 3 42 7 40 140 1 Attended 28 3 42 7 40 140 1 Pending -
SHAREHOLDING PATTERN AS ON 31ST MARCH 2008 Category Promoters/Associates Foreign Promoters Bodies Corporate Banks Financial Institutions Foreign Financial Institutions Non-Resident Indians Public/Others TOTAL No. of Shareholders 59 2 184 3 6 5 33 4644 4936 No. of shares held 2959929 217965 361496 1125 168350 676 12444 2037700 57,59,685 % to total No. of shares 51.39 3.78 6.28 0.02 2.92 0.01 0.22 35.38 100.00 Annual Report 2007 - 2008
17
GENERAL SHARE HOLDER INFORMATION Investor Services AGM date, time and venue 29th August 2008 at 3.00 P.M. Wood Lands Hotel Pvt., Ltd. No.5, Rajaram Mohan Roy Road Bangalore - 560 025 1st April - 31st March certificates, sub division / conversion of share certificate etc. Share Holders desiring to communicate on any matter relating to the shares of the Company may either visit in person or write to the Company's Share Transfer Agent quoting their Folio No./ DP ID & Client ID number at the following address. ALPHA SYSTEMS PVT. LTD., # 30, Ramana Residency, Ground Floor, 4th Cross, Sampige Road, Malleswaram,
Financial year Book Closure
August 22, 2008 to August 31, 2008 (Both Days inclusive)
Bangalore - 560 003

Dividend: Dividend if declared would be payable on any day between September 0 1 , 2008 to September 15, 2008 The Company has appointed M/s. Alpha Systems Pvt. Ltd., Registrar & Share Transfer Agents for handling all matters relating to share transfers including transfer/ transmission of shares, de-materialization of share Market Price Data Information MONTH Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 HIGH 143.90 149.80 165.00 217.30 195.00 184.00 LOW 112.50 122.10 133.30 153.50 159.00 161.00 MONTH Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 HIGH 201.00 233.00 230.00 258.80 176.95 162.00 LOW 160.10 165.00 188.10 137.00 135.00 105.50 Phone Nos. 080-23460815 - 818, Fax: 08023460819 e-mail : alfint@vsnl.com
Stock code:
Bombay Stock Exchange Ltd Bangalore Stock Exchange Ltd ISIN : INE 764D01017 531266
18
Particulars of last 3 Annual General Meetings Date/Time 28.08.2007 3.00 p.m. 29.08.2006 3.00 p.m. 29.07.2005 3.00 p.m. Location Wood Lands Hotel Pvt., Ltd. No.5, Rajaram Mohan Roy Road Bangalore - 560 025 Wood Lands Hotel Pvt., Ltd. No.5, Rajaram Mohan Roy Road Bangalore - 560 025 Wood Lands Hotel Pvt., Ltd. No.5, Rajaram Mohan Roy Road Bangalore - 560 025 Summary of Special Business
Nil
Nil Re-appointment of Mr. A. T. Nahender as Director (Operations) for a further period of 5 years.
No special resolution had been passed through Postal Ballot during the year 2007-08. Dividend Payment Date PLANT LOCATIONS: Plot No. A-7 SIDCO Industrial Estate HOSUR 635 126 Tamil Nadu Precision Component Division, Plot No.42/43, Survey No.20, Metagalli Indl. Area, Mysore - 570 016 Karnataka Any day between 30th 15th September 2008. August 2008 to
Plot No. I Dyavasandra Indl. Layout Whitefield Road Mahadevapura PO. BANGALORE 560 048, Karnataka DISCLOSURES
During the year under review, besides the transactions mentioned under schedule 20, page no.... of Annual Report, there were no other related party transactions by the Company with its promoters, directors and management that had a potential conflict with the interest of the Company at large. There are no instances of non-compliance on any matter relating to the capital market during the last three years. T h e Company has not adopted the nonmandatory requirements as stated in Annexure I 19
D of clause 49 of the Listing Agreement. However, the Company had moved towards a regime of unqualified financial statements since many years. The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India in the preparation of financial statements, the Company has not adopted a treatment different from that prescribed in the Accounting Standard. For V S T TILLERS T R A C T O R S LTD Place: Bangalore Date: June 28, 2008 V K Surendra Chairman Annual Report 2007 - 2008
AUDITORS' REPORT
TO THE MEMBERS OF V.S.T TILLERS TRACTORS LIMITED We have audited the attached Balance sheet of M/s. V.S.T TILLERS TRACTORS LIMITED as at 31st March 2008, Profit and Loss Account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We have conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956 and based on such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to above, we report that: a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of the books; The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; On the basis of written representations received from the Directors, as on 31st March, 2008 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2008 from being appointed as a Director in terms of clause(g) of subsection(I) of section 274 of the Companies Act, 1956 and In our opinion and to the best of our information and according to the explanations given to us, the accounts read with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2008; In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and
e.
f.
2.
(ii)
3.
(iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on the date. For Brahmayya & Co., Chartered Accountants Sd/G. Srinivas (Partner) Membership No. 086761
b.
c.
Place : Bangalore Date : 28th June, 2008
20
AUDITORS' REPORT
A N N E X U R E T O A U D I T O R S ' REPORT Referred to in paragraph 3 of our report of even date i) (a) The Company has maintained proper records showing full Particulars including quantitative details and situation of fixed assets. All the assets have been physically verified by the management during the year as per programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification. In our opinion, the Company has not disposed off a substantial part of fixed assets during the year and going concern status of the Company is not affected. The inventory has been physically verified by the management. In our opinion, the frequency of verification is reasonable. The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt within the books of accounts. The Company has not granted any loans secured or unsecured, to Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956, hence paragraphs (iii)(b),(c) and (d) of the Order, are not applicable. The Company has not taken any loans secured or unsecured, from companies, vi) firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956, hence paragraphs (iii)(f) and (g) of the Order, are not applicable. iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. Further, on the basis of our examination, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weakness in the aforesaid internal control systems. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the companies Act 1956, have been so entered. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 exceeding the value of rupees five lakh in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.
(b)
(c)
v)
ii)
(a)
(b)
(b)
(c)
iii)
(a)
According to the information and explanations given to us, the Company has not accepted any deposits from the public; as such the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. Annual Report 2007 - 2008
(b)
vii)
21
A U D I T O R S ' REPORT
viii) We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the rules made by the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues to the extent applicable to it. There are no arrears of outstanding statutory dues as at 31st March, 2008 for a period of more than six months from the date they became payable. (b) According to the records of the Company and information and explanations given to us, there are no dues in respect of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax Excise Duty/Cess which have not been deposited on account of dispute except the following; Period to which the amount relates 2005-06 Forum where pending Dept. of Revenue Delhi & Mangalore, Revision Authority Central Excise and Service Tax Appellate Tribunal Central Excise and Service Tax Appellate Tribunal
the Central Government of India, the

maintenance of Cost records has been prescribed under clause (d) of sub section (I), of section 209 of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However we have not made a detailed examination of records with a view to determine whether they are accurate or complete. ix) (a) According to the information and explanations given to us and according to the records as produced and examined by us, In our opinion, the Company is regular in depositing with appropriate authorities Name of the Statue Central Excise Act, 1944 Finance Act, 1944 Central Excise Act, 1944 x) Nature of the dues Rebate on Export of Goods Penalty Amount in (Rs.) 3,57,291/-
2,00,000/-
2004-05 & 2005-06 Various years from 2004-05 to 2006-07
Excise Duty/ Penalty
15,44,83,344/-
The Company does not have accumulated losses as at 31st March, 2008 and has not incurred any cash losses during the financial year covered by our Audit or in the immediately preceding financial year. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company has no dues to Financial Institutions and banks at the balance sheet date and the Company has not issued any Debentures. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Annual Report 2007 - 2008
xiii) The provisions of any special statute applicable to Chit Fund / Nidhi / Mutual Benefit Fund / Societies are not applicable to the Company. xiv) In our opinion and according to explanations given to us, the Company is not a dealer or a trader in Securities. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.
xi)
xv)
xii)
xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained. 22
AUDITORS' REPORT
xvii) Based on the information and explanations given to us and an overall examination of the Balance Sheet of the Company, in our opinion, there are no funds raised on short term basis which have been used for long term investment and viceversa. xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year and therefore paragraph 4 Clause (xviii) of the order is not applicable to the Company. xix) The Company has not issued debentures during the year and therefore paragraph 4 (xix) of the Order is not applicable. The Company has not raised any money by public issues during the year and therefore paragraph 4 (xx) of the Order is not applicable. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any instance of the fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.
xx)
xxi)
For Brahmayya & Co., Chartered Accountants Place : Bangalore Date : 28th June, 2008 Sd/G. Srinivas (Partner) Membership No. 086761
23
BALANCE SHEET
As at
PARTICULARS Sch No. 31st March, 2008 Details Total Rs. Rs. 31st March, 2007 Details Total Rs. Rs.
SOURCES OF FUNDS Shareholders' Funds Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability Deferred Tax Asset Deferred Tax (Net) TOTAL APPLICATION OF FUNDS Fixed Assets Gross Block Accumulated Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Inventories Receivables Cash and Bank Balances Loans and Advances Sub-Total (A) Current Liabilities and Provisions Current Liabilities Provisions Sub-Total (B) Net Current Assets (A-B) Miscellaneous Expenditure to the extent not written off TOTAL V.K.Surendra Chairman
1 2
5,75,96,850 62,50,54,850 68,26,51,700
5,75,96,850 51,47,87,100 57,23,83,950 2,79,11,951 5,01,59,630 7,91,96,892 7,80,71,581 4,04,81,174 27,95,396 3,38,77,821 79,57,26,413 3,76,85,778 68,81,41,309
3 4
2,39,04,286 5,52,92,606 3,86,52,418 47,74,597
5 56,26,38,721 28,37,62,441 27,88,76,280 1,78,89,997 6 7 8 9 10 33,57,17,559 30,32,08,487 16,96,74,585 4,96,13,588 85,82,14,220 11 12 36,40,69,573 4,70,86,462 41,11,56,035 44,70,58,185 13 70,47,551 79,57,26,413 V.P.Mahendra Managing Director 29,67,66,277 4,48,54,400 26,53,88,559 24,19,60,581 15,50,17,152 4,97,02,843 71,20,69,135 27,63,38,226 4,40,83,626 32,04,21,852 39,16,47,283 1,08,03,611 68,81,41,309 As per our report of even date For BRAHMAYYA & CO. Chartered Accountants G.Srinivas 52,68,40,002 26,01,11,920 26,67,28,082 1,06,07,933 27,73,36,015 83,54,400
Place : Bangalore Dated : 28th June, 2008
Subash B.K. Company Secretary
Partner
Membership No.08676l
24
PROFIT A N D LOSS ACCOUNT

for t h e year ended PARTICULARS Sch No. 31st March, 2008 Total Details Rs. Rs. 31st March, 2007 Total Details Rs. Rs.
INCOME Sales Other Income TOTAL EXPENDITURE Materials consumed Personnel & Other Expenses Finance Charges Depreciation TOTAL PROFIT FOR THE YEAR ADD/(LESS) : Prior Year's Adjustment PROFIT BEFORE TAX PROVISION FOR INCOME TAX Current tax Income Tax - Prior period Deferred Tax Fringe Benefit Tax 7,83,00,000 3,596 (38,07,957) 40,78,800 7,85,74,439 PROFIT AFTER TAX ADD: Balance brought forward AMOUNT AVAILABLE FOR APPROPRIATION APPROPRIATIONS : Dividend Tax on Distributed Dividends Transfer to General Reserve BALANCE IN PROFIT and LOSS ACCCOUNT EPS - Basic EPS - Diluted 2,87,98,425 48,94,292 10,00,00,000 8,80,35,261 22,17,27,978 25.01 25.01 2,30,38,740 39,15,434 7,50,00,000 7,77,02,758 17,96,56,932 21.79 21.79 14,40,25,220 7,77,02,758 22,17,27,978 6,73,00,000 9,26,688 (12,57,476) 40,39,200 7,10,08,412 12,55,30,954 5,41,25,978 17,96,56,932 16 17 18 5 123,78,42,995 41,89,82,721 53,38,233 2,89,93,059 169,11,57,008 22,24,87,562 1,12,097 22,25,99,659 104,46,62,577 37,07,67,188 44,89,734 2,73,03,344 144,72,22,843 19,66,44,217 (1,04,851) 19,65,39,366 14 15 188,58,08,040 2,78,36,530 1,91,36,44,570 162,27,94,734 2,10,72,326 1,64,38,67,060
V.K.Surendra Chairman
V.P.Mahendra Managing Director
As per our report of even date For BRAHMAYYA & CO. Chartered Accountants G.Srinivas Partner Membership No.086761
25
SCHEDULES
forming part of Balance Sheet as at
31st March, 2008 Details Total Rs. Rs. 0 1 . SHARE CAPITAL Authorised 10,00,000 Redeemable (Previous year: 10,00,000) Preference Shares of Rs. 10/- each 60,00,000 Equity Shares of Rs. 10/- each (Previous year: 60,00,000) 31st March, 2007 Details Total Rs. Rs.
1,00,00,000 6,00,00,000 7,00,00,000
1,00,00,000 6,00,00,000 7,00,00,000
Issued, Subscribed & Paid-up : 57,59,685 Equity Shares (Previous year : 57,59,685) of Rs. 10 each fully paid. TOTAL
5,75,96,850
5,75,96,850
5,75,96,850
5,75,96,850
02. RESERVES AND SURPLUS

Capital Reserve : Profit on reissue of forfeited shares Share Premium Account Per Last Balance Sheet Revaluation Reserve : Per Last Balance Sheet LESS: Depreciation for the Year 8,250 5,51,95,050 5,52,03,300 68,81,042 64,752 68,16,290 General Reserve: Per last Balance Sheet ADD: Transfer from Profit and Loss Account 37,50,00,000 10,00,00,000 47,50,00,000 8,80,35,261 62,50,54,850 30,00,00,000 7,50,00,000 37,50,00,000 7,77,02,758 51,47,87,100 69,45,617 64,575 68,81,042 8,250 5,51,95,050 5,52,03,300
Surplus in Profit and Loss Account TOTAL
03. SECURED LOANS

1) Working Capital Loans A) From Commercial Banks B) From Others 2,39,04,286 2,79,11,951
2,39,04,286
2,79,11,951 2,79,11,951 4,83,13,850 18,45,780
TOTAL
2,39,04,286 5,46,77,350 6,15,256
04. UNSECURED LOANS

Deposits from Dealers Sales tax deferment TOTAL
5,52,92,606
5,01,59,630
26
forming part of the Balance Sheet 05. FIXED ASSETS

GROSS BLOCK As at 01-04-2007 Rs. LAND BUILDINGS PLANT & MACHINERY COMPUTER SYSTEMS OFFICE EQUIPMENTS VEHICLES FURNITURE & FIXTURES 2,92,54,256 7,66,72,009 37,30,45,508 2,35,43,364 41,80,851 1,21,22,862 80,21,152 52,68,40,002 CAPITAL WORK IN PROGRESS INCLUDING ADVANCES PREVIOUS YEAR 49,97,64,807 3,11,23,842 40,48,647 52,68,40,002 10,607,933 23,62,91,059 2,73,67,919 35,47,058 26,01,11,920 26,67,28,082 26,34,73,748 1,06,07,933 17,889,997 63,24,406 3,50,68,388 8,64,617 39,300 14,36,783 7,762 4,37,41,256 Additions Rs. Deletions Rs. As at 31-03-2008 Rs. 2,92,54,256 8,29,96,415 44,24,819 40,36,89,077 6,15,995 3,825 28,97,898 2,37,91,986 42,16,326 1,06,61,747 80,28,914 2,19,15,858 21,40,92,921 1,48,10,833 16,27,448 28,43,795 48,21,065 16,19,599 2,39,08,954 18,27,676 1,98,641 11,27,978 3,74,963 2,90,57,811 2,35,35,457 38,01,080 23,42,00,795 5,38,132 3,827 10,64,251 1,61,00,377 18,22,262 29,07,522 51,96,028 Upto 31-03-2007 Rs. Rs. Rs. DEPRECIAITION For the year Adjustments Upto 31-03-2008 Rs. NET BLOCK As at 31-03-2008 Rs. 2,92,54,256 5,94,60,958 16,94,88,282 76,91,609 23,94,064 77,54,225 28,32,886 As at 31-03-2007 Rs. 2,92,54,256 5,47,56,151 15,89,52,587 87,32,531 25,53,403 92,79,067 32,00,087
79,42,537 56,26,38,721 26,01,11,920
5,4,07,290 28,37,62,441 27,88,76,280 26,67,28,083
CAPITAL WORK IN PROGRESS 1,22,17,860 INCLUDING ADVANCES
SCHEDULES
31st March, 2008 Details Total Rs. Rs. 06. INVESTMENTS AT COST LONG TERM INVESTMENTS: Non Trade - Quoted 33,544(33,544) Bonds of Rs. 100 each of Tax Free Bonds issued by Unit Trust of India Trade - Unquoted 41,50,000 Equity Shares of Rs. 10 each of Mitsubishi -VST Diesel Engines Private Limited,a joint venture company 1,00,000 (1,00,000) Equity Shares of Rs. 10 each of Ranba Castings Ltd. 31st March, 2007 Details Total Rs. Rs.
33,54,400 33,54,400
33,54,400 33,54,400
4,15,00,000 10,00,000 4,15,00,000 4,48,54,400 10,00,000 43,54,400 10,00,000 3,354,400
Less Provision for diminution in Investments
44,854,400
CURRENT INVESTMENTS: Non Trade - Unquoted i) LIC Mutual Fund LICMF Floating Rate Fund - Dividend 250,000 (Nil) Units of Rs. 10 each ii) PNB-Principal Mutual Fund Principal Floating Rate Fund SMP 250,000 (Nil) Units of Rs. 10 each
25,00,000
25,00,000
TOTAL Market Value of Quoted Investments as on 31-03-2008 Rs.35,47,613/(Previous year Rs.35,00,316/-) 4,48,54,400
50,00,000 83,54,400
07. INVENTORIES
i. Raw material and Components Add : Goods-in-Transit ii. iii. iv. v. vi. vii. viii. Work-in-Progress Finished Goods Stock of Spares and Attachments Stock of Trading goods Consumable Stores Loose Tools Machinery Spares and Others TOTAL 17,88,25,465 12,38,318 18,00,63,783 1,19,27,198 6,53,10,825 5,40,05,890 47,43,921 4,21,390 1,53,18,841 39,25,711 33,57,17,559 17,15,10,122
17,15,10,122 96,05,799 1,91,29,921 4,42,45,877 32,08,394 13,16,749 1,26,86,425 36,85,272 26,53,88,559
28
SCHEDULES
31st March, 2008 Total Details Rs. Rs. 08. RECEIVABLES Unsecured Considered Good :Debts outstanding for a period exceeding six months Other Debts TOTAL 31st March, 2007 Details Total Rs. Rs.
1,14,98,119 29,17,10,368
30,32,08,487 30,32,08,487
1,58,43,071 22,61,17,510
24,19,60,581 24,19,60,581
09. CASH AND BANK BALANCES

Cash on hand Cheques on hand and in transit Balances with Scheduled Banks On Current Accounts On Margin and Other Accounts Balances on Deposit Account with others 2,21,012 8,51,06,910 5,35,78,364 3,06,68,300 1,00,000 8,43,46,664 TOTAL 16,96,74,585 6,23,55,468 5,44,09,900 1,00,000 11,68,65,368 15,50,17,152 1,12,081 3,80,39,703
10. LOANS AND ADVANCES

(Unsecured Considered Good) Advances recoverable in Cash or in Kind or for value to be received :Advances against Supplies Sundry Advances and Deposits Income Accrued but not due Deposits with Government Departments Advance Income tax and TDS Less Provisions TOTAL
46,01,725 1,09,04,218 3,31,270 1,58,37,213 3,37,76,375
1,32,33,552 1,34,84,495 7,97,369 2,75,15,416 2,16,87,948 499,479 4,97,02,843
4,96,13,588
11. CURRENT LIABILITIES

Trade Creditors Dues to Micro, Small and Medium Enterprises {Refer to Note (2) (E) of Schedule 19} Dues to others Accrued Expenses and Other Creditors Advances from Customers and Dealers Unclaimed Dividend TOTAL
19,26,26,264 19,26,26,264 15,58,82,024 1,41,74,755 13,86,529 36,40,69,573
15,13,94,288 15,13,94,288 11,64,82,044 75,69,432 8,92,462 27,63,38,226
29
SCHEDULES
31st March, 2008 Details Total Rs. Rs. 12. PROVISIONS Proposed Dividend Tax on dividend Provision for taxation Provision for Warranties Provision for Employee Benefits TOTAL 2,87,98,425 48,94,292 9,12,264 37,12,856 87,68,625 4,70,86,462 2,30,38,740 39,15,434 31st March, 2007 Details Total Rs. Rs.
17,55,152 1,53,74,300 4,40,83,626
13. MISCELLANEOUS EXPENDITURE

A. Voluntary Separation scheme Balance brought forward Payments during the year Less: Expenditure written off Balance carried forward B. Preliminary Expenses Balance brought forward Less: Expenditure written off Balance carried forward TOTAL 1,08,03,611 1,48,90,162
1,08,03,611 37,56,060 70,47,551
1,48,90,162 40,86,551 1,08,03,611 12,683 12,683
70,47,551
1,08,03,611
forming part of Profit & Loss Account for the year ended
31st March, 2008 14. SALES Domestic Sales Less Returns Less: Excise Duty Recovered 172,08,40,179 79,42,411 171,28,97,768 17,29,10,273 188,58,08,040 147,62,95,882 65,45,728 146,97,50,154 15,30,44,580 162,27,94,734 31st March, 2007
Export Sales TOTAL
15. OTHER INCOME

Miscellaneous Receipts Profit on Foreign Exchange Fluctuation Export Incentives Profit on sale of Investments Insurance claims Interest (T.D.S. Rs 8,83,637 [p.y. Rs.6,88,137] ) Rent Received (T.D.S. Rs.4,40,979)(p.y.Rs.39,117)] Sale of Scrap Provision for Diminution in value of Investments Written Back Sundry credit balances written back TOTAL 2,82,605 1,32,535 64,42,126 14,70,834 6,45,727 45,61,911 21,47,449 59,75,492 10,00,000 51,77,851 2,78,36,530 58,018 21,68,289 49,02,180 1,73,613 19,51,969 40,10,872 9,00,798 59,32,069
9,74,518 2,10,72,326
30
SCHEDULES
forming part of Profit & Loss Account for the year ended
31st March, 2008 Total Details Rs. Rs. 16. MATERIAL CONSUMED A N D COST OF GOODS SOLD Opening Stock ADD: Purchases during the period LESS: Closing Stock Material Consumed LESS: INCREASE / (DECREASE) IN STOCK Opening Stock Work in Progress Finished Goods Less: Closing Stock, Work in Progress Finished Goods 96,05,799 1,91,29,921 2,87,35,720 1,19,27,198 6,53,10,825 7,72,38,024 Increase / (Decrease) in Stock TOTAL 4,85,02,304 123,78,42,995 3,16,37,714 1,22,31,440 4,38,69,154 96,05,799 1,91,29,921 2,87,35,720 (1,51,33,434) 104,46,62,577 21,89,64,393 130,49,56,181 23,75,75,276 128,63,45,298 15,25,31,178 109,59,62,358 21,89,64,393 102,95,29,143 31st March, 2007 Details Total Rs. Rs.
17. PERSONNEL AND OTHER EXPENSES

Personnel Salaries, Wages and Bonus Welfare Expenses Contribution to Funds Leave Salary Factory & Manufacturing Expenses Power and Fuel Stores & Tools Consumed General & Administrative Expenses Consultancy and Legal Charges Fees, Rates and Taxes Insurance Miscellaneous Expenses Rent Repairs to Buildings Repairs to Machinery Repairs & Maintenance Research and Development Bank Charges Travelling and Conveyance 13,73,47,761 54,70,049 1,47,89,744 20,78,790 15,96,86,344 1,65,82,856 4,53,71,843 6,19,54,699 55,94,885 20,64,013 26,38,766 1,05,50,982 21,10,912 10,24,255 1,15,82,858 25,35,330 32,74,003 22,85,114 94,81,460 5,31,42,577 45,97,188 21,38,534 29,19,970 88,72,316 20,28,226 9,95,838 1,26,04,693 21,77,245 22,86,282 23,94,848 1,26,86,051 5,37,01,191 1,49,40,041 3,71,60,999 5,21,01,040 11,98,46,824 55,78,502 1,79,29,314 17,67,649 14,51,22,289
31
SCHEDULES
f o r m i n g p a r t of Profit & Loss Account for t h e y e a r ended 31st March, 2008 Details Total Rs. Rs. 17. PERSONNEL AND OTHER EXPENSES (Contd.) Sales and Marketing Expenses Advertisement & Publicity Freight and Forwarding Selling Expenses Service and Warranty Expenses 22,59,176 4,30,86,655 7,74,60,625 1,70,14,824 13,98,21,280 Preliminary Expenses Written off Bad debts written off Loss on sale of Assets Employee seperation expenses written off 26,71,745 3,70,48,725 6,16,91,165 1,26,59,367 11,40,71,002 12,683 16,09,097 63,335 40,86,551 43,77,821 TOTAL 41,89,82,721 57,71,666 37,07,67,188 31st March, 2007 Details Total Rs. Rs.
6,21,761 37,56,060
18. FINANCE CHARGES Interest on Other Loans TOTAL 53,38,233 53,38,233 44,89,734 44,89,734
V.K.Surendra Chairman
V.P.Mahendra Managing Director
As per our report of even date For BRAHMAYYA & CO. Chartered Accountants G.Srinivas Partner Membership No.086761
32
NOTES FORMING PART OF ACCOUNTS

SCHEDULE 19 E) Foreign exchange transaction i) Transactions d e n o m i n a t e d in foreign currencies are recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are d e t e r m i n e d b y t h e r e s p e c t i v e contracts. P r e m i u m f o r f o r w a r d c o n t r a c t is recognised as income or expenditure over the life of the contract. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.
N O T E S F O R M I N G PART O F A C C O U N T S I) Significant Accounting Policies A) Conventions The Financial Statements are prepared under historical cost conventions in accordance w i t h the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant disclosure requirements of the Companies Act, 1956. B) Fixed Assets and Depreciation i) ii) Fixed Assets are capitalised net of cenvat credit availed. Land, Building, Plant and Machineries have been revalued as at 31st December, 1985. Other Fixed Assets in the Gross Block are stated at original cost. Additions to Fixed Assets are stated at cost of acquisition and all costs relating to the acquisition and installation up to the date the asset is put into use are capitalised. Depreciation has been charged under the Straight Line Method (SLM) at the rates p r e s c r i b e d in Schedule X I V of t h e Companies Act, 1956.
ii)
iii)
iv)
F)
Revenue / Expenditure recognition Sales of products are recognised on despatch to customers and are exclusive of excise duty, trade discounts, sales tax and other taxes. Income accruing in the accounting year and a s c e r t a i n a b l e / r e a l i s a b l e w i t h reasonable certainty on the date of financial statements is taken into account. Expenses accruing in the accounting year and ascertainable w i t h reasonable accuracy on the date of financial statement are provided in the accounts.
iii)
C)
Investments Long t e r m investments are stated at cost. Provision is made when permanent diminution in value has arisen in the opinion of the management.
G)
Retirement benefits to employees i) Company's contribution to recognised funds, such as Provident Fund, Employees State Insurance, etc. are charged to Profit and Loss Account. Gratuity liability is covered by a policy w i t h Life Insurance Corporation of India. Annual contribution to the fund is charged to revenue. Liability on the basis of actuarial valuation by an independent actuary has been provided which has been charged to revenue. Leave encashment is provided on the basis of actuarial valuation at the balance sheet date carried out by an independent actuary.
D)
Inventories i) Raw material and components are valued at Weighted Average Cost, after adjustment of Cenvat credit availed or to be availed, wherever applicable. W o r k in progress and finished goods are valued at lower of cost or net realisable value. Finished goods lying in the factory premises are valued inclusive of Excise Duty. This has no impact on the profit of the company. Consumable stores and machinery spares are valued at cost. Loose tools under use are valued at 5 0 % of the cost and unused at cost. Unsold Scrap at the end of the year is taken at estimated realisable value.
ii)
ii)
iii)
iii)
H)
Research and Development Revenue e x p e n d i t u r e on Research and Development are included under respective heads of expenditure. Capital expenditure on Annual Report 2007 - 2008
iv)
33

Research and Development are treated in the same manner as expenditure on other fixed assets. B) Secured Loans i) W o r k i n g Capital loans sanctioned by Commercial Banks are secured by way of
I)
Warranty
T h e c o m p a n y p e r i o d i c a l l y assesses and provides for the estimated liability on warranty given on sale of its products based on past performance of such products.
first charge on
hypothecation of
J)
Voluntary Separation Scheme for Employees Compensation paid to employees w h o t o o k retirement under the Voluntary Separation Scheme is amortised over a period of five years. C)
inventories, bills receivable and o t h e r current assets and a second charge on all fixed assets of the company, ranking pari passu basis with other members of the consortium Receivables O t h e r debts includes amounts due f r o m firms in w h i c h D i r e c t o r s of the company are partners of Rs. 33,14,819 (previous year Rs.8,104) D) Cash and Bank balance Bank balance w i t h others on deposit account includes deposit with West Bengal State Rural Co-operative Bank Limited of Rs. 1,00,000 (previous year Rs. 1,00,000). Maximum amount outstanding at any time during the year was Rs. 1,00,000 (previous year Rs. 1,00,000). None of the Directors are interested in the Bank and none of the Directors are relatives of the Directors of the Bank. E) M i c r o , Small and M e d i u m E n t e r p r i s e s Development Act, 2006(MSMED Act) Based on the information available w i t h the Company, there are no Micro, Small and Medium Enterprises, to w h o m the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2008. Further, no interest during the year has been paid or payable under the terms of the MSMED Act, 2006. F) Depreciation on Research and Development assets amounting to Rs.8,87,979 (Previous year Rs. 8,77,118) has been charged off during the current year. Capital expenditure on Research and Development Rs.36,200 (Previous year Rs. 8,95,807) is shown as addition to fixed assets. Depreciation on the revalued assets amounting to Rs.64,752 (Previous year Rs. 64,575) has been deducted from the Revaluation Reserve. Cases filed by the customers in various consumer courts not acknowledged as debt Rs.41,12,000 (previous year Rs. 35,12,000). Demands raised by Central Excise Department not acknowledged as debt Rs. 15,50,40,635.
K)
Taxes on Income Current tax is determined in accordance w i t h the provisions of the Income Tax Act, 1961. Deferred tax resulting f r o m timing difference b e t w e e n b o o k profits and tax profits is accounted for under the liability method, at the rate prescribed by Accounting Standard, to the extent that timing differences are expected to crystallise.
L)
Preliminary Expenditure Preliminary Expenditure is being w r i t t e n off over a period of ten years.
M)
Impairment of Assets Consideration is given at the balance sheet date to determine w h e t h e r there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds the recoverable amount. The recoverable amount is the greater of the net selling price and value in use.
2)
Notes A) Share capital i) Issued, Subscribed and Paid-up Capital includes 1,50,000 (Previous year 1,50,000) equity shares of Rs. 10 each, which w e r e allotted as fully paid pursuant to a contract for consideration other than cash. Issued, Subscribed and Paid-up Capital includes 19,19,895 ( P r e v i o u s y e a r 19,19,895) equity shares of Rs.10 each, which w e r e allotted as fully paid up by way of bonus shares by capitalisation of share premium. 3)
G)
ii)
Contingent Liabilities not provided for A)
B)
34

The Company has filed appeals before The Customs, Excise and Service Tax Appellate Tribunal, Bangalore and revision application before the Revision Authority, Department of Revenue, Ministry of Finance, N e w Delhi challenging t h e demands raised by t h e department. 6 A. STATEMENT OF A D D I T I O N A L INFORMATION INFORMATION ON CAPACITY A N D PRODUCTION (Figures in Numbers) PARTICULARS Licensed Capacity 01-04-200731-03-2008 Tillers & Tractors Diesel Engines Precision Components 13,000 3,000 2,36,000 01-04-200631-03-2007 13,000 3,000 2,36,000 Installed Capacity 01 -04-200731-03-2008 13,000 3,000 2,16,000 01 -04-200631-03-2007 13,000 3,000 2,16,000 4) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) Rs.49,28,586 ( previous year Rs. 1,00,66,825) Figures f o r the previous year have been regrouped w h e r e v e r necessary for comparison purposes.
5)
Production 01-04-200601-04-200731-03-2007 31-03-2008 Power Tillers Tractors Diesel Engines Precision Components 12,738 1,755
228
Captive Use 01-04-200701-04-200631-03-2008 31-03-2007

5 2
10,596 1,537
279
47,395
_ 34,387
1,97,529
1,55,566
Production includes units captively consumed as mentioned above. B. PARTICULARS OF STOCK CLASS OF GOODS As at 01-04-2007 Value Quantity Rs. Nos.
293 4
As at 01-04-2006 Quantity Value Nos. Rs.

207 4
OPENING STOCK Power Tillers Tractors Diesel Engines Precision Components Others
30
1,016
1,64,61,936 6,32,240 9,79,293 10,56,452 1,91,29,921
21
6,367
89,10,896 6,35,818 8,38,952 18,45,774 3,54,84,387 4,77,15,827
CLASS OF GOODS
As at 31-03-2008 Value Quantity Rs. Nos.

872

293 4
CLOSING STOCK Power Tillers @ Tractors Diesel Engines Precision Components Others
43 37 958
5,57,59,562 72,63,623 14,05,605 8,82,035
30
1,016
1,64,61,936 6,32,240 9,79,293 10,56,452
6,53,10,825
1,91,29,921
@ Note: Stock of Power Tillers includes 20 nos. of Traded Goods 35 Annual Report 2007 - 2008

C. PARTICULARS OF MANUFACTURED A N D TRADED GOODS TURNOVER CLASS OF GOODS 01-04-2007 - 31-03-2008 Quantity Value Nos. Power Tillers Tractors Diesel Engines Combine Harvesters Rice Transplanters Precision Components Others 12,174 1,714 221 Rs. 1,17,74,53,740 33,82,47,950 77,06,153 01-04-2006 - 31-03-2007 Value Quantity Nos. 10,510 1,537 270 1 106 1,73,153 Rs. 99,74,36,922 30,27,53,535 90,94,902 14,50,000 1,39,75,783 12,62,80,420 17,18,03,172 1,62,27,94,734
76 1,97,587
98,90,106 12,20,86,104 23,04,23,987 1,88,58,08,040
D.
TRADED GOODS CLASS OF GOODS As at 01-04-2007 Value Quantity Rs. Nos. As at 01-04-2006 Quantity Value Nos. Rs.
OPENING STOCK Combine Harvestors Rice Transplanters Others
1 31
9,20,426 22,87,968
2 29
32,08,394
18,40,852 19,79,167 1,19,67,534 1,57,87,553
CLASS OF GOODS
Quantity Nos. CLOSING STOCK Combine Harvestors Rice Transplanters Others
As at 31-03-2008 Value Rs.
1 27
10,64,082 16,69,361 20,10,478 47,43,921
1 31
9,20,426 22,87,968
32,08,394
E. PARTICULARS OF RAW MATERIALS, COMPONENTS A N D TRADED GOODS CONSUMED 01-04-2007 - 31-03-2008 Amount - Rs. Manufactured Goods Traded Goods 1,25,56,51,402 3,06,93,896 1,28,63,45,298 01-04-2006 - 31-03-2007 Amount - Rs. 1,00,19,25,031 2,76,04,112 1,02,95,29,143
36

F. VALUE OF IMPORTS ON CIF BASIS 01-04-2007 - 31-03-2008 Amount - Rs. 1 Components & Spares 2 Capital Equipments 4,93,55,509 1,29,25,493 6,22,81,002 G. EXPENDITURE IN FOREIGN CURRENCY 01-04-2007 - 31-03-2008 Amount - Rs. Travelling Expenditure Others 5,05,127 20,10,509 25,15,636 H. EARNINGS IN FOREIGN CURRENCY 01-04-2007 - 31-03-2008 Amount - Rs. Export of Goods on FOB Basis Others (Freight,Insurance etc.) 17,29,10,270 53,65,610 17,82,75,880 I. REMITTANCE IN FOREIGN CURRENCY DURING THE YEAR ON A C C O U N T OF DIVIDEND 01-04-2007 - 31-03-2008 Rs. 1 Amount Remitted (Net of Tax) 2 No. of Non Resident Shareholders 3 No. of Shares on Which Dividend was due 4 Year to which dividend was related Rs.8,71,860 2 2,17,965 31/03/2007 01-04-2006 - 31-03-2007 Rs. Rs.6,53,895 2 2,17,965 31/03/2006 01-04-2006 - 31-03-2007 Amount - Rs. 15,30,21,810 26,61,068 15,56,82,878 01-04-2006 - 31-03-2007 Amount - Rs. 21,04,187 27,15,214 48,19,401 01-04-2006 - 31-03-2007 Amount - Rs. 3,68,22,571 73,21,231 4,41,43,802
J.
VALUE OF IMPORTED A N D INDIGENOUS RAW MATERIAL, COMPONENTS A N D TRADED GOODS CONSUMED 01-04-2007 - 31-03-2008 Amount - Rs. Percentage 4,40,97,396 1,24,22,47,902 1,28,63,45,298 3.43% 96.57% 01-04-2006 - 31-03-2007 Amount - Rs. Percentage 4,00,68,422 98,94,60,721 1,02,95,29,143 3.89% 96.11%
1 2
Imported Indigenous
37

K. DIRECTORS REMUNERATION INCLUDED IN SALARIES A N D WAGES Remuneration to Managing Director/Wholetime Directors: 2007-08 Annual Salary @ Other Allowances Company's Contribution to P.F.etc. Commission @ 16,02,555 24,63,849 2,19,827 15,26,588 58,12,819 2006-07 16,96,804 5,51,579 1,90,297 21,23,554 45,62,234 Amount - Rs.
@ Salary paid to wholetime director i.e. Mr.A.T.Nahender during the year 2007-08 was for the period from April 2007 to 11th August 2007 and Commission on pro-rata basis and to Mr.B.C.S.Iyengar salary paid was for the period from 28th August 2007 to 31st March 2008. L. COMPUTATION OF NET PROFITS IN ACCORDANCE W I T H SECTION 198 A N D SECTION 349 OF THE COMPANIES ACT, 1956 A N D THE COMMISSION PAYABLE TO THE DIRECTORS. Amount - Rs. 01-04-2007 - 31-03-2008 a) MANAGING DIRECTOR: Profit before tax as per Profit & Loss Account Add: Loss on sale of Assets Directors Remuneration Directors Sitting fees 22,25,99,659 19,65,39,366 01-04-2006- 31-03-2007
6,21,761 58,12,819 3,22,500 67,57,080 22,93,56,739
63,335 45,62,234 1,75,500 48,01,069 20,13,40,435 1,73,613 9,74,518 20,01,92,304
Less: Profit on sale of Investments Excess Credit balances/Provision written back Net Profit in accordance with Section 349 1. Commission payable to Managing Director @ 1 % of the Net profit subject to an amount equal to annual salary drawn
14,70,834 51,77,851 22,27,08,054
1% of the Net Profit Annual Salary
22,27,081 8,73,362
20,01,923 8,43,304
2.
Commission payable to Director (Operations) @ 1 % of the Net profit subject to an amount equal to one and half times annual salary drawn whichever is Lower
1% of the Net Profit One and half times annual salary drawn
22,27,081 6,53,226
20,01,923 12,80,250
38

7 Consultancy and Legal charges includes: 01-04-2007 - 31-03-2008 1 Statutory Auditor's Remuneration Audit Fees Reimbursement of Expenses Amount - Rs. 01-04-2006 - 31-03-2007
4,00,000 82,307 75,000 2,809 14,798
4,82,307
2,25,000 94,302
3,19,302
2 Cost Auditor's Remuneration Audit Fees Certification Reimbursement of Expenses 8 DEFERRED T A X A T I O N
45,000
92,607 12,635 57,635 Amount - Rs.
01-04-2007 - 31-03-2008 Breakup of Deferred tax assets and Deferred tax liabilities arising on account of timing differences a) Deferred Tax Assets Share Issue Expenses Amalgamation expenses Expenses inadmissible Provision for Gratuity / Leave encashment dis-allowed u/s 43B Unabsorbed Depreciation Deferred Tax Liabilities Provision for depreciation Net deferred tax liability (b-a)
01-04-2006 - 31-03-2007
7,315 21,40,070 26,27,212 47,74,597
7,315
27,88,081 27,95,396 4,04,81,174 3,76,85,778 Amount - Rs.
b)
3,86,52,418 3,38,77,821
c) 9
EARNINGS PER SHARE 01 -04-2007 - 31 -03-2008 Net Profit After Tax No. of Equity shares outstanding Basic Earning Per Share Diluted Earning Per Share 14,40,25,220 57,59,685 25.01 25.01
01-04-2006 - 31-03-2007 12,55,30,954 57,59,685 21.79 21.79
10
RELATED PARTY TRANSACTIONS a) Related Parties with whom transactions have taken place during the year Associates : 1 2 3 4 5 Key 1 2 3 VST Auto Ancilliaries Private Limited, Bangalore Vinay Industries, Bangalore India Garage, Chennai India Garage Service Station, Bangalore Rama Infotech,Bangalore Management Personnel : Mr. V.P.Mahendra Mr. A.T.Nahender Mr.B.C.S.Iyengar
Up to 11th August 2007 From 28th August 2007
39

Transactions with Related parties ASSOCIATES KEY MANAGEMENT PERSONNEL TOTAL
Machining of Components Sales of Products and Spares Purchase of fuel for company vehicles and computer software & maintenance services Remuneration paid
1,18,65,883 3,89,87,453 13,21,121
58,12,819
1,18,65,883 3,89,87,453 13,21,121 58,12,819
Details of transactions with related parties during the period 01.04.2007 - 31.03.2008 Party 1. 2. 3. 4. 5. VST Auto Ancilliaries (P) Limited Vinay Industries India Garage Service Station India Garage Petrol Pump Rama Infotech Nature of Transaction Machining of Components Machining of Components Sale of products and spares Purchase of fuel for company vehicles Computer software and maintenance services Opening Balance 1 2 Employee Benefits Warranty 1,53,74,300 17,55,152 1,71,29,452 12 Paid during the year 1,70,57,429 17,55,152 1,88,12,581 Provision during the year 89,19,620 37,12,856 1,26,32,476 Amount of Transaction 1,16,54,468 2,11,415 3,89,87,453 3,17,209 10,03,912 Reversal during the year Closing Balance 72,36,491 37,12,856 1,09,49,347 Outstanding as on 31-03-2008 28,38,865 Credit 59,809 Credit 33,14,820 Debit 25,879 Credit
11 PROVISIONS
EMPLOYEE BENEFITS Consequent upon adoption of Accounting Standard on " Employee Benefits" (AS 15) ( Revised 2005) issued by the Instituteof Chartered Accountants of India, as required by the Standard, the following disclosures are made: Amount - Rs. Defined Contribution Plan: Contribution to Defined Contribution Plan recognised as an expense for the year as under 2007-08 Employer's Contribution to Provident Fund Defined Benefit Plan: Reconciliation of opening and closing balances of the present value of the defined benefit obligation 63,87,802 2006-07 57,35,572
Gratuity (Funded) 2006-07 2007-08 3,25,51,489 65,62,739 24,33,889 1,29,007 (42,55,751) 3,74,21,373 3,13,12,742 15,13,746 24,55,924 (15,03,530) (12,27,393) 3,25,51,489
Leave Encashment (Unfunded) 2006-07 2007-08 73,64,348 24,62,375 4,96,478 (2,77,094) (23,16,741) 77,29,366 66,73,729 17,92,537 4,82,876 (3,09,241) (12,75,553) 73,64,348
Obligation as at the beginning of the year Current Service Cost Interest Cost Actuarial Gain/(Loss) Benefits paid Obligations as at the end of the year
40

Gratuity (Funded) 2007-08 2006-07 Change in plan assets Plan assets as at the beginning of the year Expected return on plan assets Actuarial Gain/(loss) Contributions Benefits Paid Plan assets as at the end of the year 2,53,79,840 23,79,086 71,704 1,29,73,222 (42,55,751) 3,65,48,101 206,94,796 17,70,724 35,804 41,05,909 (12,27,393) 2,53,79,840 Leave Encashment (Unfunded) 2007-08 2006-07
23,16,741 (23,16,741)
12,75,553 (12,75,553)
Reconciliation of present value of the obligation and the fair value of plan assets Gratuity (Funded) 2007-08 2006-07 Fair value of plan assets at the end of the year Present value of the defined benefit obligations at the end of the year Amount recognised in the Balance Sheet Actual return on plan assets Cost for the year Current service cost Interest cost Expected return on plan assets Actuarial (Gain)/Loss Net cost recognised in the Profit and Loss Account 65,62,739 24,33,889 (23,79,086) 57,303 66,74,845 15,13,746 24,55,924 (17,70,724) (15,39,334) 6,59,612 (2,77,094) 26,81,759 24,62,375 4,96,478 17,92,537 4,82,876 3,65,48,101 2,53,79,840 Leave Encashment (Unfunded) 2006-07 2007-08
77,29,366 77,29,366
73,64,348 73,64,348
3,74,21,373 8,73,272 24,50,789
3,25,51,489 71,71,649 18,06,528
(3,09,241) 19,66,172
The gratuity and leave Incashment expenses have been shown in contribution to funds under Schedule 17. Actuarial assumptions Gratuity (Funded) 2007-08 2006-07 Mortality Table(LIC) Interest rate Estimated rate of return on plan assets Expected rate of increase in salary 1994-96 (Ultimate) 8% 8% 5% 1994-96 (Ultimate) 8% 8% 5% Leave Encashment (Unfunded) 2007-08 2006-07 1994-96 (Ultimate) 8% 8% 5% 1994-96 (Ultimate) 8% 8% 5%
Note: The estimates of future salary increases considered in actuarial valuations take account of inflation, seniority, promotions and other relevant factors such as supply and demand factors in the employment market.
41
ANNEXURE - I
3M Engineering, A B. Engineering Works, Accutech, Ace Forge Pvt Ltd, Akashree Packagings, Akshais Castings, Ambar's Carburizing Services, Anand Industries, Ansar Trade Links, A r u n Foundries & Precision Press-Mac Gevende, Precision Telecom RCS Rubber Products, Industries,
Precitech Engineering, Prescon, Pressfab Industries, Industries, R.S.Enterprises, Rado Industrial Works, Rado Industrials, Rainbow Industries, Ram Sundaar Die Casters, Ramana Industries, Regal Metal Works, Royalex Industries, Rugel Motors India Pvt Ltd, S S K Industries, S.M. Yusuf Engineering Works,S.S. Industries, S.S.R.VIndustries, Saba Tools Pvt Ltd, Saleh Sons & Company, Saras Small Tools Industries, Saravana Industries, Scarlet Engineers, Screens and Filters, Seco Industries, Seenu Precision Tooling System, Senthooran Industrial, Shakthi Engineering Industries, Shalini Enterprises, Shantala Industries, Shiva Shakti Enterprises, Shree Gautham Industries, Shree Precision Works, Shridurga Engineers, Engineering W o r k s , Engineering, Sree Engineering, Sree-Vee Sreekar Engineering, Southern Tech Hydraulic Engineering, Shreyaas Industries, Shridhar Engineering Southern Precision
Fabrications, ASA Engineering Works, Asha Metal Industries, Ashwin Engineering, Associated Wheels, A u t o c o m Industries, Badari Engineering Works, Balaji Cable, Balaji Packaging Industries, Balambikai Industries, Bearing Manufacturing Co., Beena Enterprises, Best Aluminium Casters, Bhagawathi Enterprises, Bharath Press Components, Bhargave Industries, Burji Speed On Clutches, CalexAuto, Canara A u t o Products, Canara Standard Keys, Card Corporation, Chains & Allied Concern, Chandur Enterprises, Chowdeshwari Tool Craft, D.PAuto Industries, Damodhar Engg.Works, Dhruva Rubber Products, Diabonic Honing Ledges & Tools Pvt Ltd, Elbee Enterprises, Electronic Heat, Emkay Industries, Esvee Precision, Evershine Industries, Excel Packaging, Excel Process (Bangalore) Pvt. Ltd, Expert Engineering Corporation, Ferro Products, Focus Rubber Industries, Geekayar Engineering Co., Geo Enterprises, Grace Tools, Gomatech Industries, Hemant Tools Pvt. Ltd., Hind Engineering Works, Hi-tech Die Cast Private L i m i t e d , Hitech Research, Hy-Tech Industries, Indian Precision Components, J.R.Engineers, J.S. Enterprises, Jai Engineering Works, Jai Industries, Jay Industries, Jupiter Industries, Enamel & Allied Industries, K K Traders & Industries, Manufacturers, Kaithakulam Rubber P Ltd., Kaveri Lakshman Lakshmi Engineering & Components, MGP A u t o Valve Components, M.S.PIastics, Madonna Metal Industries, Mak Industries, Mak Systems, Manikanta Industries, Manju Machine Tools, Marrie Engineering W o r k s , Maruthi Rubber Products, Mclams Syndicate, Mesh Well Gears, Metaforge, Metcons Pvt Ltd, Minda Sai Industries, Moto Fastners, Mysore Steel & Surgical Inds., Mysore Steel Products, Narasipur & Sons, N e w Forge Co., Newlight Automobile Industries, Noble Industries, Om Banashankari Enterprises, Omkar Enterprises, Ovee Enterprises, PR. K. Enterprises, Padma Engineering Works, Pallavi Industries, Peekay Industries, Perpetual A u t o Products, Engineering Company, Precision Components, Prajwal Industries, Preci Metcut Toolings Pvt. Ltd., Precision A u t o
Industries, Sree Ballambikai Industries, Sree Shakti Engineering Enterprises, Sree Vaishnavi Tools, Sri Angu Engineering, Sri Shakthi Engineering, Sri Bakgiyam A u t o Die Castings, Sri Balaji Industrials, Sri Chamundi Industries, Sri Indrani Enterprises, Sri Radhai Industries, Sri Revana Siddeshwara Industries, Sri Reveana Siddeshwara Gears & Sprockets, Sri Sai Industries, Sri Shakambari Auto Parts, Sri Sri Industries, Sri Venkateshwara Engineering Works, Sujatha Rubber Products,Suntech Industries, Supram Industries, Supreme Metals, Sushar Fastners, Swathi Ventures, Technopack Polymer Industries, Truthread Gauges & Tools Pvt. Ltd., Turnwell, Uma Industries, Uni- Carb, Un is tick India, Universal Carburizing Works Pvt Ltd, Universal Flexibles Pvt Ltd, Vaibhav Engineering, Vignesh General Engineering Works, Vinay Industries, Vishnusons Industries, Windson Industries, Zeeshan Precision Engg.,.
42
CASHFLOW STATEMENT
for t h e year ended 31 -03-2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit/(Loss) Before Tax Adjustments for Extraordinary items : Employee seperation expenses written off Preliminary Expenses Written off Loss on sale of Investments / Assets Sundry credit balances written back Profit on sale of Investments / Assets Net Profi/(Loss) Before Tax and Extraordinary items Depreciation Investments / Interest / Dividend Income Interest Operating Profit Before Working Capital Changes Adjustments for : Trade and Other Receivables Inventories Trade and Other Payables Cash Generated from Operations Direct Taxes Paid Cash Flow Before Extraordinary Items Net Cash from Operating Activities (A) CASH FLOW FROM INVESTING ACTIVITIES B. Purchase of Fixed Assets Sale of Fixed Assets Purchase of Investments Sale of Investments Interest Received Net Cash used in Investing Activities (B) CASH FLOW FROM FINANCING ACTIVITIES C. Proceeds from Issue of Share Capital Proceeds from Short and Long Term Borrowings Interest Paid Dividends Paid Net Cash used in Financing Activities (C) NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS-OPENING BALANCE CASH AND CASH EQUIVALENTS-CLOSING BALANCE V.K.Surendra Chairman V.P.Mahendra Managing Director (5,10,23,320) 1,9,13,490 (5,75,00,000) 2,34,70,834 50,28,010 (7,81,10,987) (2,95,13,915) 4,38,253 (50,00,000) 66,73,613 36,75,608 (2,37,26,441) 22,25,99,659 37,56,060 40,86,551 12,683 63,335 (9,74,518) (1,73,613) 196,539,366 31-03-2007
6,21,761 (61,77,851) (14,70,834) (32,70,864) 219,328,795 2,89,93,059 (45,61,911) 53,38,233 2,97,69,381 24,90,98,177 (6,21,24,229) (7,03,29,000) 8,77,67,156 (4,46,86,074) 20,44,12,102 (8,09,70,653) 12,34,41,449 12,34,41,449
30,14,438 19,95,53,804
2,73,03,344 (40,10,872) 44,89,734 2,77,82,206 22,73,36,010 (6,31,01,479) (4,91,55,630) 6,06,03,793 (5,16,53,316) 17,56,82,694 (7,25,86,142) 10,30,96,552 10,30,96,552
11,25,311 (53,38,233) (2,64,60,107) (3,06,73,029) 1,46,57,433 15,50,17,152 16,96,74,585
3,49,89,854 (44,89,734) (1,96,12,790) 1,08,87,330 9,02,57,441 6,47,59,711 15,50,17,152 As per our report of even date For BRAHMAYYA & CO. Chartered Accountants G.Srinivas Partner Membership No.086761 44
VST SHAKTI 130 Dl POWER TILLER
YANJI SHAKTI RICE TRANSPLANTER
MITSUBISHI SHAKTI VWH 120 POWER TILLER
MITSUBISHI SHAKTI MT I80D TRACTOR
V.S.T. TILLERS TRACTORS LTD.

P.B. No. 4 8 0 1 , Mahadevapura P.O., Bangalore - 560 048. India. Tel. : 28510805 -6 - 7 , 28510275/318 Fax:91-80-28510221 E-mail : vstgen@vttlhq.com Web : www.vsttillers.com

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40

Annual Report 2007 - 2008

V.S.T. TILLERS TRACTORS LTD.

Idol of Lord Ganesha at VST Tillers Tractors Limited

rotation for a period of five years w.e.f. July 28, 2008

VST TILLERS TRACTORS LTD

VST TILLERS TRACTORS LTD

VST TILLERS TRACTORS LTD

Company Secretary and Compliance Officer Auditors

Annual Report 2007 - 2008

Annual Report 2007 - 2008

Annual Report 2007 - 2008

Annual Report 2007 - 2008

Annual Report 2007 - 2008

price realization and hence greater opportunities to

Annual Report 2007 - 2008

Annual Report 2007 - 2008

DIRECTORS' REPORT ANNEXURE

Annual Report 2007 - 2008

V. P. Mahendra Managing Director Bangalore, June 28, 2008

Annual Report 2007 - 2008

Place : Bangalore Date : 28th June, 2008

Annual Report 2007 - 2008

REPORT ON CORPORATE GOVERNANCE

Annual Report 2007 - 2008

1,00,001 and above Total

Financial year Book Closure

August 22, 2008 to August 31, 2008 (Both Days inclusive)

Bangalore - 560 003

Annual Report 2007 - 2008

Place : Bangalore Date : 28th June, 2008

Annual Report 2007 - 2008

the Central Government of India, the

2004-05 & 2005-06 Various years from 2004-05 to 2006-07

Excise Duty/ Penalty

Annual Report 2007 - 2008

5,75,96,850 62,50,54,850 68,26,51,700

2,39,04,286 5,52,92,606 3,86,52,418 47,74,597

Place : Bangalore Dated : 28th June, 2008

Subash B.K. Company Secretary

Annual Report 2007 - 2008

PROFIT A N D LOSS ACCOUNT

V.P.Mahendra Managing Director

Place : Bangalore Dated : 28th June, 2008

Subash B.K. Company Secretary

Annual Report 2007 - 2008

1,00,00,000 6,00,00,000 7,00,00,000

1,00,00,000 6,00,00,000 7,00,00,000

02. RESERVES AND SURPLUS

Surplus in Profit and Loss Account TOTAL

03. SECURED LOANS

2,79,11,951 2,79,11,951 4,83,13,850 18,45,780

2,39,04,286 5,46,77,350 6,15,256

04. UNSECURED LOANS

Annual Report 2007 - 2008

forming part of the Balance Sheet 05. FIXED ASSETS

79,42,537 56,26,38,721 26,01,11,920

5,4,07,290 28,37,62,441 27,88,76,280 26,67,28,083

CAPITAL WORK IN PROGRESS 1,22,17,860 INCLUDING ADVANCES

4,15,00,000 10,00,000 4,15,00,000 4,48,54,400 10,00,000 43,54,400 10,00,000 3,354,400

Less Provision for diminution in Investments

17,15,10,122 96,05,799 1,91,29,921 4,42,45,877 32,08,394 13,16,749 1,26,86,425 36,85,272 26,53,88,559

Annual Report 2007 - 2008