vajra bearings ltd share price Directors report

VAJRA BEARINGS LIMITED ANNUAL REPORT 2006-2007 DIRECTORS REPORT To, The Members, The Directors of your Company present to you the 15th Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2007. FINANCIAL RESULTS: (Rupees in Lacs) Financial year 31-03-2007 31-03-06 Sales / Turn over 39.57 27.58 Loss before Depreciation 9.97 234.50 And Interest Depreciation 20.40 20.40 Financial Charges 0.00 0.00 Loss after Depreciation 10.11 254.90 DIVIDEND The Directors do not recommend any dividend in view of accumulated losses. REVIEW OF OPERATIONS The working of the Plant has been suspended due to non-availability of the required working capital. An Amicable acceptable solution is being worked out with bank to bring an end to stalemate.. Bank has sought services of Dr. U. R. Dangarwala, Chartered Accountant to find mutually acceptable and beneficial. Negotiations are on the advance stage with the Bank to settle the outstanding dues for Rs. 185 Lacs. Negotiations are also over to allow the machinery to be shifted for repairing and re-starting production at our desired place at Shapar - Rajkot. The above amount is almost arrived and agreed upon by the Bank. Company has completed all formalities for closer at Dabhasa Plant including Workers Due, P. F., Income Tax, Factory Act, etc. Company will decide to withdraw / pursue further at on appropriate time pending damage suit of Rs.25.56 Crores Plus Interest pending at Civil Court. Vadodara against Anyonya Co-Operative Bank Ltd., Vadodara. Since, the mediator appointed by the Bank is positive and Chairman of the Bank is a learned and respectful and leading Chartered. Accountant of Vadodara, we are hopeful of reaching an amicable solution shortly. FIXED DEPOSITS The Company did not invite / accept / renew any fixed deposits during the year under review. DIRECTORS RESPONSIBILITY STATEMENT As required under section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) The Directors have selected such accounting policies and applied them consistently and made judgments 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 year and of the profit of the Company for that period; iii) The Directors have taken proper care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and iv) The Directors have prepared the annual accounts on a going concern basis. DIRECTORS: In pursuance of the provision of the Companies Act, 1956 and the Articles of Association of the Company, Mr.Ramgopal Dalmiya, Director retire by rotation and being eligible, offer himself for reappointment. CORPORATE GOVERNANCE Pursuant to Clause 49 of the Stock Exchange Listing Agreement, a report on Corporate Governance and Management Discussion and Analysis is given in the Annexure-A, forming part of the Report. Auditors Certificate retarding compliance of conditions of corporate governance is given in the Annexure-B. AUDITORS The Board proposes to re-appoint M/s. Divyakant Zaveri & Co., Chartered Accountants, Vadodara as Statutory Auditors of the Company for the year 2007-08. They will hold office until the conclusion of the next Annual General Meeting. The Board recommends their appointment. However, the auditors have suggested to appoint an auditor from Rajkot as, manufacturing activity has been shifted to Rajkot. They have also agreed to retire automatically once an auditor has been appointed at Rajkot by the company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to the Company. APPRECIATION: Your Directors would like to place on record their appreciation and thanks to the Banks, Companys customers, suppliers, investors and employees for their valuable support and co-operation. For and on behalf of the Board Vadodara 30/06/2007 Sd/- Chairman & Managing Director MANAGEMENT DISCUSSION AND ANALYSIS REPORT Companys Performance The Companys performance during the year was poor. This is due to non- availability of the working capital despite full orders. As per the discussions going on with Anyonya Co-Operative Bank, who are and only Bankers to the company. Bank has agreed to allow to shift machinery required repairing and overhouling and further installation at Shapar - Rajkot. The company has agreed to dispose off property owned by the company and pay to the Bank directly and bring an end to the long pending stalemate. The Bank has also agreed to settle for Principal Ledger Balance amounting to Rs.185 Lacs as a full and final settlement. The Bank has appointed Dr. U. R. Danganvala, Chartered Accountant, to mediate between the company and the Bank. The shifting of Plant to Shapar - Rajkot will result in cost saving for inventory as well as transport cost which amounts in Lacs per month. The company has also received assurances from the suppliers to support the production provided we are located near to them i.e., Shapar - Rajkot. The shifting will enable company to dispose the property and settle with the Bank. The company expects to work round 0 Clock at Shapar - Rajkot on Job Work Basis till company makes arrangement for the working capital. Company is sure to come out from the present mess as Promoters/Directors are dedicated and decided to re-locate themselves at Rajkot despite being at Baroda for last more than 30 years. This establishes dedication towards the company and its shareholders. Opportunities, Threats and Future Outlook Since same circumstances are prevailing in the market, outlook for the next year would remain same. The Company is strategically refocusing its business through efficient channel management, credit and recovery process and good back office processes to achieve competitive costs and minimize the loses. Internal Controls System and their adequacy The Company has a proper and adequate system of internal controls developed over a period of time. The system is supported by professional management and internal audits. Human Resources The Companys human resource policy lays stress on motivating people by encouraging better work culture and environment aimed at continuous improvement in production and quality. For and on behalf of the Board Vadodara 30/06/2007 Sd/ Vijay Doshi Chairman & Managing Director