Punjab Tractors

The Directors are pleased to present their 37th Annual Report together
 with Audited Accounts for the financial year ended 31st March, 2008.
 
 FINANCIAL RESULTS :                                 
 
                                                             Rs. Crores
                                        Year ended         Year ended
                                     31st March, 2008   31st March, 2007
 
 Net Operating Revenue                      969.6             958.9
 Other Income                                 2.4               4.3
 Total Revenue                              972.0             963.2
 Gross Profit                                99.4             114.9
 Net Finance Charges/(Income)               (14.6)              0.9
 Depreciation                                16.9              15.5
 Profit Before Tax                           97.1              98.5
 Extraordinary Income                          -               11.0
 Total Profit Before Tax                     97.1             109.5
 Tax Provisions
 -  Current                                  37.2              34.1
 -  Deferred                                 (5.3)             (2.6)
 Profit After Tax                            65.2              78.0
 Balance of Profit from Prior Years          25.0              14.0
 Surplus available for Appropriation:        90.2              92.0
 Appropriations:            
 Proposed Dividend                           30.4
 Tax on Proposed Dividend                     5.2
 Transfer to General Reserve                 24.6              67.0
 Balance carried to Balance Sheet            30.0              25.0
 
 DIVIDEND
 
 Your Directors are pleased to recommend a dividend @ 50 per cent (Rs. 5
 per Equity Share) compared to Nil for the previous year, payable to
 those Members whose names appear in the Register of Members as on Book
 Closure date. The dividend including dividend distribution tax,
 surcharge and education cess will absorb a sum of Rs. 35.6 crores.
 
 REVIEW OF OPERATIONS
 
 During the year, your Company has made special efforts to reduce dealer
 outstandings by focusing attention on increasing retail sales and
 reducing dealer stocks and thereby increase in collection from dealers.
 This has helped substantial reduction in pipeline stocks and dealer
 outstandings.
 
 Your Company took a bold step by curtailing billing of tractors to the
 dealers during the first half of the financial year to create a fine
 balance between product sales and the cash receivables by the Company.
 Even though this measure taken by your Company contributed to a
 temporary drop in sales, this created an excellent platform for sound
 business growth in the second half of the financial year.
 
 Your Directors are happy to report that the impact of the above
 measures was visible in the second half leading to higher tractor sales
 during October 2007 - March 2008. Swaraj is one of the few brands which
 have shown significant growth in the second half despite a de-growth in
 the domestic tractor industry.
 
 As a result of the above initiatives, trade receivables during the year
 came down by Rs. 222.3 crores. On 31st March, 2008, the total trade
 receivables were Rs. 281.3 crores.
 
 Despite high pressure on prices of steel related items, material cost
 for the current fiscal was a shade better than last year. This became
 possible due to cost reduction exercises, value engineering efforts,
 sourcing synergy with Mahindra & Mahindra Ltd., the holding company,
 and better buying practices.
 
 The positive impact of the strategies undertaken by the Company is
 summarized below:
 
 Parameters                    First Half     Second half   Growth over
                                 2007-08        2007-08      First Half
 
 Tractor Sales (Nos.)             10974          17071          56%
 Total Revenue (Rs. Crores)       380.8          591.2          55%
 Pre-Tax Profit (Rs. Crores)       19.3           77.8         303%
 
 The total revenue for the year 2007-08 was Rs. 972.0 crores against Rs.
 963.2 crores for the previous year. Profit for the year before
 interest, depreciation, extraordinary income and taxes was Rs. 99.4
 crores against Rs. 114.9 crores posted in the previous year. The net
 interest for this period was an income of Rs. 14.6 crores against an
 expense of Rs.0.9 crores for the previous year. The cash profit at Rs.
 114.0 crores was same as of the previous year.
 
 The Profit before tax for the year was Rs. 97.1 crores against Rs. 98.5
 crores (excluding extraordinary income) for 2006-07.
 
 FINANCE
 
 Improved dealer collections and internal generations have led to
 additional cash inflows resulting in a net income of Rs. 14.6 crores on
 interest account against an expense of Rs. 0.9 crores for the last
 year.
 
 As at 31st March, 2008, the amount of outstanding unsecured public
 deposits was Rs. 4.0 crores as compared to Rs. 10.7 crores last year.
 
 The Consortium of Bankers rates the Company as a prime customer and
 continues to extend facilities / services at or below the prime rates.
 
 Your Company follows a prudent financial policy and aims to maintain
 optimum financial gearing at all times. The Companys total Debt to
 Equity Ratio was 0.01 as on 31st March, 2008.
 
 CORPORATE GOVERNANCE
 
 As required by provisions of the Listing Agreements with the Stock
 Exchanges, reports on Management Discussion and Analysis, Corporate
 Governance as well as Auditors Certificate regarding compliance of
 conditions of Corporate Governance are annexed to this Report.
 
 INDUSTRIAL RELATIONS
 
 Industrial relations were cordial in all the divisions throughout the
 year under review. The Management Discussion and Analysis Report gives
 an overivew of the developments in Human Resources during the year.
 
 PARTICULARS OF EMPLOYEES
 
 The Company had 10 employees who were in receipt of remuneration of not
 less than Rs.24,00,000 during the year ended 31st March, 2008 or not
 less than Rs.2,00,000 per month during any part of the said year.
 
 However, as per the provisions of section 219(1)(b)(iv) of the
 Companies Act, 1956, the Directors Report and Accounts are being sent
 to all the Shareholders of the Company excluding the Statement of
 particulars of employees. Any Shareholder interested in obtaining a
 copy of the Statement may write to the Company Secretary of the
 Company.
 
 SAFETY, HEALTH AND ENVIRONMENTAL PERFORMANCE
 
 Your Company is committed towards excellence in Safety, Occupational
 Health and Environment. This is also to ensure sustainable business
 growth. The Company has a well-established Safety, Occupational and
 Environmental Policy which inter alia ensures safety of public,
 employees, plant and equipment by ensuring compliance with all
 statutory rules and regulations on regular basis. Your Company also
 imparts training to its employees as per the predefined training
 calendar, carries out statutory safety audits of its facilities as per
 legal requirement, conducts regular medical check-up of its employees
 and promotes eco-friendly activities. The three plants of the Company
 at Mohali, Chappercheri and Majri have been certified with ISO 9000 and
 the process for ISO 14000 and 18000 certification for all these plants
 is in progress.
 
 DIRECTORS
 
 Shri S.Durgashankar who was appointed as an Additional Director at the
 meeting of the Board of Directors held on 14th July, 2007, resigned on
 30th November, 2007. The Directors record their appreciation of the
 contribution made by Shri Durgashankar during his brief tenure as
 Director of the Company.
 
 General Insurers (Public Sector) Association of India (GIPSA) on
 behalf of GIPSA Member Companies and General Insurance Corporation of
 India (GIC) withdrew the nomination of Shri M. Raghavendra as a Nominee
 Director and nominated Shri S.K.Chanana as their representative on the
 Board of the Company. Shri Chanana was appointed as an Additional
 Director at the meeting of the Board of Directors of the Company held
 on 23rd October, 2007. He holds office upto the date of the forthcoming
 Annual General Meeting. The Company has received a notice under section
 257 of the Companies Act, 1956 from a Member signifying his intention
 to propose Shri Chanana as candidate for the office of Director.
 
 Shri M. Raghavendra whose nomination was withdrawn by General Insurers
 (Public Sector) Association of India (GIPSA) on behalf of GIPSA Member
 Companies and General Insurance Corporation of India (GIC) was
 re-inducted on the Companys Board as an Independent Director with
 effect from 23rd October, 2007 in view of his long association and
 invaluable contribution to the Company. Shri Raghavendra who was
 appointed as an Additional Director holds office upto the date of the
 forthcoming Annual General Meeting. The Company has received a notice
 under section 257 of the Companies Act, 1956 from a Member signifying
 his intention to propose Shri Raghavendra as candidate for the office
 of Director.
 
 Shri V.S.Parthasarathy and Shri Narayan Shankar, who were appointed as
 Additional Directors at the meeting of the Board of Directors of the
 Company held on 23rd October, 2007, hold office upto the date of the
 forthcoming Annual General Meeting. The Company has received notices
 under section 257 of the Companies Act, 1956 from Members signifying
 their intention to propose Shri Parthasarathy and Shri Shankar as
 candidates for the office of Directors.
 
 Shri Hardeep Singh and Shri Daljit Mirchandani retire by rotation, and
 being eligible, offer themselves for reappointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, your
 Directors, based on the representations received from the operating
 management, and after due enquiry, confirm that:
 
 a) in the preparation of the annual accounts, the applicable accounting
 standards have been followed;
 
 b) they have, in the selection of the accounting policies, consulted
 the Statutory Auditors and these have been applied consistently and
 reasonable and prudent judgement and estimates have been made so as to
 give a true and fair view of the state of affairs of the Company as at
 31st March, 2008 and of the profit of the Company for the year ended on
 that date;
 
 c) proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 d) the annual accounts have been prepared on a going concern basis.
 
 ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
 
 Particulars in respect of the above activity under the Companies
 (Disclosure of Particulars in the Report of Directors) Rules, 1988 is
 annexed to this report.
 
 AUDITORS
 
 The Companys Statutory Auditors, M/s. S.Tandon & Associates, Chartered
 Accountants, hold office until the conclusion of the forthcoming Annual
 General Meeting and are eligible for reappointment. The Company has
 received a certificate from them that their reappointment, if made,
 would be within the limits under Section 224(1B) of the Companies Act,
 1956.
 
 DEPOSITS
 
 Your Directors report that as on 31st March, 2008, 49 deposits
 aggregating Rs. 27.4 lacs matured but were not claimed.  Subsequently,
 out of the above, 14 deposits aggregating Rs. 7.2 lacs have been repaid
 or renewed. The particulars of loans/ advances and investment in its
 own shares by listed companies, their subsidiaries, associates, etc.,
 were required to be disclosed in the annual accounts of the Company
 pursuant to Clause 32 of the Listing Agreement and are furnished
 separately.
 
                                       FOR AND ON BEHALF OF THE BOARD
 
 Place : New Delhi                        ANJANIKUMAR CHOUDHARI
 Date  : 7th May, 2008                           Chairman