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Gummadi Industries Ltd.

BSE: 531243 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Gummadi Industries Ltd. (GUMMADIINDS) - Director Report

Company director report

GUMMADI INDUSTRIES LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT To The Members The Board of Directors of the Company is pleased to present the Eleventh Annual Report of the Company together with audited statement of accounts for the financial year ended 31st March 2007. FINANCIAL RESULTS Summarised financial results for the year ended 31st March 2006 are as under: 2006-2007 2005-2006 (Rs. in lacs) (Rs. in lacs) Income 22.50 - Profit before Depreciation and taxation (40.31) (50.92) Less Depreciation 0.89 0.89 Loss before tax (41.21) (51.81) Provision for tax - - Loss for the year (41.21) (51.81) Your Company has registered a turnover of Rs.0.00 lacs as against NIL during 2005-2006. The loss for the year was Rs.4121 lacs as against Rs.51.81 lacs in the last year. Your Company is potentially sick within the meaning of subsection (1) of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985. However, the company is taking every steps to turnaround in this current financial year. The company has implemented one time settlement with bankers ICICI Bank by obtaining funds from directors. LAY OFF For the last few years, our industry have been running with much difficulty in the midst of severe business competition and a considerable dip in the demand for our products due to high Competitive Markets. The company is running under recurring Losses. The Board of Directors of the company is taking all sincere efforts to revive the working of the factory and to make it economically viable. Due to continued depressed market conditions and labour unrest, the company had no other alternative but to opt for lay-off on and from 4th December 2002. Our Management is taking every step in restarting the business after due consultation with our Bankers as well as the Labourers. DIVIDEND In view of the loss during the year under review and the carried forward losses of previous years no dividend is proposed for the year. DEPOSITS The Company has no deposits. DIRECTORS RESPONSIBILITY STATEMENT Your Directors confirm that: 1. In the preparation of accounts for the period ended March 31, 2007 the applicable Accounting Standards had been followed and there are no material Departments. 2. The selected accounting policies are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the year end of the profit and loss of the Company for the year and these policies are applied consistently. 3. Proper and sufficient care has been taken 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 prevention and detection of fraud and other irregularities. 4. The accounts for the year March 31, 2007 are on a going-concern basis. AUDITORS M/s Subramanian and Swaminathan, Chartered Accountants, Chennai retire at the conclusion of ensuing Annual General Meeting and are eligible for reappointment to hold office till the conclusion of the next Annual General Meeting at a remuneration to fixed by the Board. Regarding Auditors' qualifications [clauses (f) to (j)], in their main audit report and clauses (ix), (x) and (xi) in their report under Manufacturing and Other Companies (Auditor's Report) Order 1988, your Directors wish to state that: a) The company is very confident of lifting the lay off very soon and the cessation of activities for about a year's time does not necessarily indicate to permanent closure of the factory. The company has been interacting with the representatives of the labour and is hopeful of a meaningful agreement, very shortly. b) The Company is hopeful of recovery of its sundry debtors and loans & Advances. c) The auditors' comments about accumulated losses exceeding 50% of Company's networth and its rehabilitation package with its bankers are self explanatory. d) Due to suspension of operations, the company is not able to repay principal and interest payments to its loan creditors. The company will negotiate for waiver of interest. OTHER INFORMATION 1. Foreign Collaboration and Technology Absorption As production level were low for substantial part of the year, the technology received from collaborators M/s Nordic has not been fully absorbed during the year. 2. Conservation Energy (a) Electricity Units Consumed (kwh) NIL Amount (Rs) NIL Quantity Produced (kgs) NIL Consumption per kilo of output N.A. (b) Diesel Consumed (ltrs) NIL Amount (Rs) NIL No captive power was generated. 3. Foreign Exchange The Foreign Exchange inflow and outflow of the company for the financial year 2006-2007 is as given below: Inflow Nil Outflow Nil Raw material Import Nil 4. Personnel During the year under review there were no employees drawing remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956. ACKNOWLEDGEMENTS The Board of Directors takes this opportunity to record their appreciation of the continued support of bankers and employees during the year. Place: Chennai T.M. NARASIMHAN V. MADHAVA RAO Date : 1.09.2007 Director Managing Director