The Directors have pleasure in presenting their report on the
 operations of the Company for the year ending 31st March 2007.
 
 Financial Results                      Current Year      Previous Year
                                        (Rs. in Lacs)     (Rs. in Lacs)
 
 a)  Sales and other income               497.52               982.30
 
 b)  Profit before Interest, 
     Depreciation
     and non-cash exp.                   (166.36)             (253.72)
 
 c)  Interest                              70.47               101.32
 
 d)  Depreciation and other non cash 
     expenses                               0.99                 1.10
 
 e)  Provision for Taxation                 0.11                 0.56
 
 f)  Net Profit/(Loss) before 
     Appropriation                        237.93)             (356.70)
 
 g)  Add: Deferred Tax                     80.25                88.28
 
                                         (157.68)             (268.42)
 
 h) Add: Balance Brought Forward         (602.67              (334.25)
 
 Net Profit & (Loss) trf. to 
 Balance sheet                           (760.35)             (602.67)
 
 Dividend:
 
 Due to losses during year the Board of Directors does not recommend any
 dividend for the year ended 31st March 2007.
 
 Turnover and Profits and Operations:
 
 Turnover for the year under review amounted to Rs 497.52 Lac (previous
 year Rs.947.25 Lac). The net loss for the same year was Rs.237.81 Lac
 (previous year Rs.  356.14 Lac).
 
 Finance and Accounts:
 
 During the year, the Company could not progress much and had strains on
 its working capital requirement because of slow recovery of its
 receivables, slow movement of stocks and losses due to lower turnover
 mainly because of the recession prevalent in the Industry in which the
 Company operates. However your directors hopeful of doing a better
 performance in the future.
 
 Auditors:
 
 The Auditors M/s. S. M. Bhat & Associates., Chartered Accountants, are
 holding their office as the Auditors of the Company till the conclusion
 of the ensuing Annual General Meeting. M/s. S. M. Bhat and Associates,
 Chartered Accountants, have expressed their consent to continue as
 Statutory Auditors of the Company and your Board recommends their
 appointment.
 
 Deposits
 
 The company has not invited or accepted any deposits from the public
 under the non- banking financial companies, Reserve bank of India
 directions, 1977.
 
 Particulars of Employees:
 
 As required under Sub Section 2A of Section 217 of Companies Act, 1956
 read with Companies (Particulars of Employees) Rules, 1975 and as
 amended from time to time, the particulars of such employees are not
 applicable to the Company.
 
 Conversion of energy and technology absorption
 
 The particulars under the companies (Disclosure of Particulars in the
 report of Board of directors) Rules, 1988 on conservation of energy and
 technology absorption are not applicable.
 
 Foreign Exchange Earnings & Outgo
 
 There is no outflow/inflow of foreign exchange
 
 Corporate governance
 
 The company has complied with the requirements regarding corporate
 governance as the required under clause 49 of the listing agreement
 entered in to the stock exchange where the companys shares are listed.
 A report of the corporate governance in this regard is made a part of
 this annual report and a certificate from the auditors of the companies
 regarding the compliance of the conditions of the corporate governance
 is attached to this report.
 
 Directors Responsibility Statement:
 
 As required under Section 217(2AA) of the Companies Act, 1956, the
 Directors confirm that:
 
 1.  In the preparation of the annual accounts, the applicable
 accounting standards have been followed.
 
 2.  The accounting policies selected have been consistently applied and
 the accounting for the period under review gives a true and fair view
 of the state of affairs of the Company.
 
 3.  Proper and sufficient; care has been taken for maintenance of
 adequate accounting records in accordance with the provisions of the
 Act, for safeguarding the assets of the Company.
 
 4.  The accounts have been prepared on a going-concern basis.
 
 Audit Committee
 
 The company has duly constituted audit committee under section 292A of
 the companies act, 1956.
 
 Acknowledgement:
 
 The Directors wish to take this opportunity to thank all the employees
 of the Company as also various other Government Agencies for their
 continuous contribution towards the growth of the organization.
 
                For Aakar Engineering and Manufacturing Company Limited
 
                                    Chairman
 
 Place: Mumbai
 Date : 03-09-2007