The Directors present the Fortieth Annual Report together with the
Audited Accounts for the year ended 31 st March, 2007.
1. FINANCIAL RESULTS
Rs. in lacs
2006-2007 2004-2006 2004-2006
(12months) (Annualised) (18months)
Sales 9882.68 7771.31 11656.97
and Tax. 1802.73 1310.29 1965.43
Finance Charges 662.34 505.89 758.83
and Tax 1140.39 804.40 1206.60
Depreciation 341.25 341.44 512.16
Profit/(Loss) before Tax, 799.14 462.96 694.44
with Kalwe division
(including depreciation) (444.88) (493.57) (740.36)
Legal Matters (80.04) (26.82) (40.23)
Surplus on Settlement of
Loans/Fixed»Deposits2 3.51 12.17 18.26
Provision for Taxation (11.00) (9.59) (14.38)
Profit/(Loss) afterTax, 266.73 (54.85) (82.27)
Adjustments, (33.84) - (136.97)
Balance brought forward (18431.82) (18212.58)
to Balance Sheet (18198.93) (18431.82)
Shown separately as the Kalwe division is inoperative since 29th May,
* Comprises of costs related to the Scheme of Arrangement with
lenders/creditors, BIFR Rehabilitation Scheme and arbitration with SPS
On account of the Companys substantial indebtedness and repayment
obligations, the Directors are unable to recommend payment of dividend.
10. FIXED DEPOSITS
As on the date of this Report, outstanding fixed deposits from the
public aggregate to Rs. 410.00 lacs. All fixed deposits are due and
repayable.The Rehabilitation Scheme to be submitted- to BIFR for
approval will provide for the repayment of fixed deposits.
Mr. Sanjay Brar and Mr. H. B. Bhavsar retire by rotation at the
forthcoming Annual General Meeting and being ineligible under Section
274 (1)(g) of the Companies Act, 1956, do not offer themselves for
Mr. D. S. Lodha was appointed as Additional Director designated as
Managing Director-cum-CEO w.e.f. 16th January, 2008. He holds
office until the conclusion of the ensuing Annual General Meeting and
being eligible, offers himself for re-appointment.
Mr. S. C. Roongta, Wholetime Director & Company Secretary, resigned
from the Board and as Company Secretary on 21st January, 2008.
12. AUDITORS AND AUDITORSREPORT
M/s. Haribhakti & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible. offer
themselves for re-appointment.
Managements response to the observations of the auditors on the
financial statements for the year under review are as follows:
- As regards Point No. 4 (I) (a) of the Auditors Report regarding
non-provision of interest on Loans and Statutory Dues, management would
like to clarify that the debt restructuring package of the Company has
been principally approved by its principal lenders and creditors.The
debt restructuring is to be implemented by way of a BIFR Rehabilitation
Scheme, which is being.prepared in consultation with the Operating
Agency. The debt restructuring package incorporates several reliefs and
concessions including but not limited to the waiver of interest on long
term debt from the cut-off date i.e. 30th June, 2004. Hence, interest
on secured arid unsecured debt, other than Fixed Deposits and current
Working Capital assistance, has not been provided on the loans that are
to be restructured. With respect to Statutory Dues, since these are
also expected lo be restructured in line with Secured and Unsecured
Loans through the BIFR Rehabilitation Scheme no interest has been
provided in the accounts.
- As regards Point No.4 (IV) (a) and (f) of the Auditors Report
regarding the physical condition/valuation of stocks and fixed asset
verification at the Kalwe plant, management would like to state that
pursuant to the Settlement reached with the principal Employee Unions
at Kalwe in November 2007, the unit is now fully accessible to it.
However/due to the non-availability oi power at the unit, it is not
practicable to carry out an exhaustive examination of stocks and fixed
assets available there though these have been outwardly verified. Based
on the verification carried out, there does not appear to be any
permanent impairment to fixed assets. Nevertheless, all equipmeni.will
require overhauling. Certain inventories have also suffered degradation
and will need to be re-worked. During the course of re-working
inventories, some permanent impairment may be. encountered but the
extent of such impairment is not likely to be substantial. Management
expects to undertake salvaging actions in respect of both stocks and
fixed assets at the time of or immediately upon relocating these items
as per the Companys impending Rehabilitation Scheme. .Only on
completion of these actions will it be possible to arrive at the exact
impact, if any, on the carrying values of stocks and fixed assets.
Until then, management has deemed it fit to reflect these items at
their original book values and has represented as such to the Auditors
The other observations made by the Auditors in their Report are either
self-explanatory or explained in the Notes on Accounts.
13. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act. 1956, the
Board of Directors of the Company nereoy cot ilirms that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and there have been no material
- The Company follows all mandatory Accounting Standards except
Accounting Standard 2 on Valuation of Inventory. Accounting Standard
15 on Accounting oi Retirerneni* Benefits to Employees and Accounting
Standard 29 on Disclosure of Provisions. Notes in respect of these
have been given in the Accounts, whichre self-explanatory.
- The Board selected and applied such accounting policies and made
judgements and estimates that, are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March, 2007, and of the Profit and Loss Account for the year ended on
- The Board made best efforts to maintain 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.
- The Accounts have been prepared on a going concern basis as the
Company is under the purview of BIFR and expects to be rehabilitated.
14. CORPORATE GOVERNANCE
A separate Report on Corporate Governance along with the Auditors
Certificate on its compliance by the Company is included as a part of
the Annual Report.
The matters referred to in the Auditors qualifications on the
Corporate Governance Report have been dealt with in the said Report and
hence require no further explanation.
15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information pertaining to conservation of energy, technology absorption
and foreign exchange earnings and outgo as required by Section 217 (1)
(e) of the Companies. Act, 1956. read with the Companies (Disclosure
of Particulars in the Report of the Board of Directors) Rules, 1988, is
given in Annexure A forming part of this Report.
16. PARTICULARS OF EMPLOYEES
Information as per Section 217 (2A) of the Companies Act. 1956, read
with the Companies (Particulars of Employees) Rules, 1975, forms part
of this Report. However, as per the provisions of Section 219 (T.) (b)
(iv) of the Companies Act, 1956, the Report and Accounts are being sent
to Shareholders excluding the information relating to employees. Any
Shareholder interested in obtaining such particulars may write to the
Managing Director-cum-CEO, Mr. D. S. Lodha, at the Registered Office of
On.behalf of the Board of Directors
Dated: 11th February, 2008.