global stone india ltd Management discussions

GLOBAL STONE INDIA LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL HIGHLIGHTS: The Financial Results of the Company for the year ended 31st March, 2008 are asunder: Rs.in lakhs Particulars 2007-2008 2006-2007 Sales and other Income 954.84 1801.88 Total Manufacturing & Administrative Expenditures 1021.78 1860.17 Profit(Loss) before Interest, Depreciation & Tax (66.94) (58.29) Interest and Finance Charges 213.79 197.16 Profit/(loss) Before Depreciation and Taxation (280.73) (255.45) Depreciation 121.28 125.28 Fringe Benefit Tax 0.93 1.35 Provision for taxation - - Profit(Loss) after Taxation (402.94) (382.08) Prior Period Adjustments (0.72) 9.95 Balance b/f from previous year (3057.44) (2685.31) Balance carried to Balance Sheet (3461.10) (3057.44) OPERATIONS: The operations of your company during 2007-08 were far from satisfactory. During the year the sales and operating income of your Company at Rs.955 Lacs, reduced by 48% from Rs. 1802 Lacs in the previous year resulting in a large portion of your operating expenses remaining unabsorbed. The net loss of the Company during the year at Rs. 403 lacs was marginally higher in comparison to previous year losses of Rs. 382 Lacs on accounts of saving in raw material and stores cost and strict control over the expenses. Actually the continued scarcity of good quality raw material, steep rise in the overall cost of inputs, absence of working capital finances and lower scale of activities have. made the operations of the Company economically unviable. Therefore the accumulated losses till. end of the current financial year have mounted to Rs.3461 Lacs. In view of this continued heavy losses in the operations, the Management of the* company explored various possibilities to continue manufacturing operations but were forced to close the manufacturing unit with effect from the close of the business hour on 16th February, 2008. The company management having tried all the alternate options does not see any possibility of revival of the company in future in the current operating circumstances. FUTURE OUTLOOK: As the company is in the process of disposal of its land, building, plant & machinery and other fixed assets, the prospects of the company in future appear to be critical, The management of the Company also does not expect to commence operations at any other alternate place and therefore any turnaround in the Company in the near future is very difficult. However the Company shall continue to look for market opportunities in the same business line and utilize its experience to generate some regular revenue from its activities so that liabilities of other, unsecured creditors can be settled and any excess available thereafter be used to refund to the shareholders of the Company.