| The Directors have pleasure in presenting Twentieth Annual Report for
the financial period ended on 31st March, 2007.
FINANCIAL HIGH LIGHTS (Rs. in Lacs)
2006-07 2005-06
(9 Months ended (15 Months ended
31.03.2007) 30.06.2006)
Sales and other Income 3050.69 5507.21
Gross Profit/(Loss)
before depreciation (-)261.58 (-) 428.75
Depreciation 86.60 140.69
Profit before tax (-)348.18 (-) 569.44
Provision for Taxation for the year (FBT) (-) 2.75 (-) 3.62
Prior Period Expenses/Income 198.63 11.61
Profit/(Loss) after Taxation (-) 152.30 (-) 561.45
Balance brought forward from
previous period (-)1747.20 (-) 1185.75
Profit/(Loss) for Appropriation (-)1899.50 (-) 1747.20
Amount carried to Balance Sheet (-)1899.50 (-) 1747.20
PERFORMANCE
Your companys Turnover for the period under review (9 Months) have
been Rs. 30.51 Crores as against Rs. 55.07 Crores in the preceding 15
Months period. The prices of major raw materials mainly Electric Grade
Steel, Copper Wire, Brass, Filament etc. have gone up during the period
which adversely impacted the profitability of the Company.
The price increases obtained by the Company, from the OE business
segment, could off set only a portion of input cost increase, severely
impacting the bottom line, in view of the size of this business
segment. Inspite of. sustained cost reduction measures, your Company
incurred a loss of Rs. 3.48 Crores during 9 Months period as against
Rs. 5.69 Crores in the previous period of 15 Months. In view of the
unabated increase in the input cost till now, your company is seeking
to get a reasonable price adjustment in all the business segments of
the company. Your company has lined up a series of cost reduction
measures and productivity improvement programs to partially offset the
impact of spiraling input cost increases.
DIVIDEND
On Account of losses incurred by the company during the financial
period, no dividend is being recommended for the period under review.
PUBLIC DEPOSITS
The Company has accepted and renewed public deposits within the meaning
of Section 58-A of the Companies Act, 1956 and Rules made there under,
during the year under review. For this purpose, all necessary
formalities have been complied with. During the period under review
Company do not have any unpaid deposits. The company has not made any
default in repayment to small depositor within meaning of Section
58-AA.
EXPORTS
Your Company continues to explore various new business segment and
geographical territories, for identifying profitable growth
opportunities.
EXPANSION
Your company has completed expansion by expanding the capacity in Auto
Bulb manufacturing by adding two new lines and have installed
facilities for manufacture of silencers for 2 wheelers. The capital
expenditure was funded from internal accruals and unsecured loans.
INSURANCE
All properties and insurable interests of the Company including
Building, Plant & Machinery and stocks have been adequately insured.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
Information as per Section 217(1 )(e) read with Companies (Disclosures
of particulars in the report of Board of Directors) Rules, 1988 are
given in the Annexure forming part of this Report.
PARTICULARS OF EMPLOYEES
None of the Employees in the Company is drawing remuneration in excess
of the limits prescribed under Section 217 (2A) read with the Companies
(Particulars of Employees) Rules, 1975 during the 9 month financial
period ended 31st March 2007.
HUMAN RESOURCE & INDUSTRIAL RELATIONS
Industrial relations were harmonious throughout the period. The Board
wishes to place on record their sincere appreciation to the
co-operation extended by all employees in maintaining cordial
relations.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreements with the Stock
Exchanges, a Management discussion and Analysis Report, Corporate
Governance Report and Auditors certificate regarding compliance of
conditions of Corporate Governance are made a part of the Annual
Report.
DIRECTORS RESPONSIBILITY STATEMENT
The Company is in compliance with various accounting and financial
reporting requirements in respect of the financial statement for the
period under review. Pursuant to Section 217(2AA) of the Companies Act,
1956, and in respect of the annual accounts for the period under
review, the Director hereby confirm that :
I. In the preparation of the annual accounts, the applicable
accounting standards had been followed.
II. Appropriate accounting policies have been selected and applied
consistently 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 at the end of the financial period and of the loss of the
Company for that period;
III. Proper and sufficient care for 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 have been taken to the best of
their knowledge and ability.
IV. The annual accounts have been prepared on a "going concern basis".
DIRECTORS
Shri Sarvesh Garg, Director of the Company retires by rotation in
accordance with the provisions of the Articles of Association of the
Company and being eligible offers himself for reappointment.
During the period under review Banks/Institutions nominated following
Directors. Mr. V.K. Seth - Nominee director Bank of Baroda.
During the period under review nomination of Mr.V.Sreedharan was
withdrawn by Bank of Baroda and Shri Prashant S. Rajgarhia resigned
from the Board of the company. Your Directors place on record their
appreciation of the valuable services rendered by them during their
tenure as Directors of the Company.
AUDITORS
The Auditors M/s. S.N. Kabra and Co., Chartered Accountants, retire at
the forthcoming Annual General Meeting and are eligible for
re-appointment.
BOARDS REPLY ON OBSERVATIONS/QUALIFICATIONS IN AUDIT REPORT
Our reply to Auditors observations mentioned at 2 (d), (f), (g), (h) &
(i) of the auditors report to the members is as under :
2-(d) In view of past experience wherein company have paid the
retirement benefits as and when became due, no provision has been made.
As most of the investments were neither traded nor Quoted, quotations
were not available and as they were lying since long they are valued at
cost.
2-(f) Directors are taking effective steps such as close monitoring of
the outstanding, follow up with the party to collect money/material,
reconciliation of the accounts etc. Directors are confident of recovery
from the debtors.
As regards outstanding advances company is hopeful to recover from
Sterling Auto Private Limited, who are in process of disposing of
assets shortly. Company is also following up with balance parties for
recovery of the advances made.
2-(g) Corporate Guarantee to the Bank of Baroda for loan to Design Auto
Distribution Ltd was given in 2001 .Similarly advance to Sterling Auto
Pvt. Ltd. also related to period 1997-98 to 2002-03. Design Auto
Distribution Ltd and Bank of Baroda have agreed for settlement of dues.
Similarly Assets of Sterling Auto Pvt. Ltd. are also at the advance
stage of sale.
2-(h) As per CDR sanction, company will provide for interest sacrifices
in the final year of repayment of loan. i.e. 2012 and thereafter
payment of interest sacrifice will be made in 3-4 Years as per cash
flow of the company.
2-(i) Company will provide for differential interest (FITL- II)
immediately upon receipt of IDBI advise in this regard.
AUDIT COMMITTEE
The Company has Audit Committee consisting of three non-executive
Independent Directors. The Committee is periodically reviewing the
accounting policies, financial statements and other matters within
powers of the committee.
LISTING
The Shares of the company are listed on Bombay Stock Exchange Limited
and Madhya Pradesh Stock Exchange.
The trading in shares of the company has suspended on the Stock
Exchange, Mumbai since 10th January, 2002. The Securities Appellate
Tribunal has directed BSE to reconsider the listing application of the
company.
ACKNOWLEDGEMENTS
Your Directors place on record their appreciation of the assistance and
support extended by the financial institutions, banks, government
authorities, shareholders and business associates. Directors also take
this opportunity to thank the employees for their devoted service and
continued co-operation and support.
For and on behalf of the Board of Directors
Dated :12th September, 2007
(SARVESH GARG) (PRADEEP KHANDELWAL)
Place : Indore MANAGING DIRECTOR DIRECTOR | 