GUMMADI INDUSTRIES LIMITED
ANNUAL REPORT 2006-2007
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.
Summarised financial results for the year ended 31st March 2006 are as
(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
The company has implemented one time settlement with bankers ICICI Bank by
obtaining funds from directors.
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
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.
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
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.
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 &
c) The auditors' comments about accumulated losses exceeding 50% of
Company's networth and its rehabilitation package with its bankers are self
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.
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
Units Consumed (kwh) NIL
Amount (Rs) NIL
Quantity Produced (kgs) NIL
Consumption per kilo of output N.A.
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:
Raw material Import Nil
During the year under review there were no employees drawing remuneration
in excess of the limits prescribed under Section 217(2A) of the Companies
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