KARANV LEATHER CHEMICALS LIMITED
DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 1998
Your Directors are pleased to submit their report on the working of the
Company, along with the audited accounts for the year ended 31st March,
The Financial results of the Company as disclosed in the accounts are
In view of the loss suffered by the Company, the Directors are unable to
recommend any dividend for the year under review.
The Company could not attain the desired production capacity due to
inadequate working capital.
Mr. P.N. Abbi, director of the Company is due for retirement by rotation
and is eligible for reappointment.
INFORMATION PURSUANT TO SECTION 217 (1) (e)
Information as per Section 217 (1) (e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in Report of the Board of the
Director's) Rules 1988 and forming part of the Director's Report for the
year ending 31st March, 1988 is as under:
A. CONSERVATION OF ENERGY
I) Energy Conservation Measures taken
The Company has, to the best of its ability, used every possible measure of
conservation of energy in terms of:
a) Optimising on Capacity of the equipment being used.
b) Using processes which are energy efficient.
ii) Additional investment and proposal, if any, being implemented for
reduction of energy
There is no additional investment made and proposals formulated for the
reduction of energy
iii) Impact of measures at (i) and (ii) above for reduction of energy
consumption and consequent impact on the cost of production of goods
Energy conservation measures being taken are for optimum use of energy and
they are non-quantifiable.
B. TECHNOLOGY ABSORPTION - RESEARCH AND DEVELOPMENT
i) Specific areas in which R & D is carried out by the Company:
The Company has its own laboratory for
a) Substitution of imported Raw materials by indigenous raw materials
b) Development of new related products.
c) Substitution of indigenous Raw Materials by less expensive indigenous
raw materials without compromising the quality of the finished products.
d) Development in application technology - to develop new ways of finishing
ii) Benefits derived as a result of the (i) above
a) Reduced the cost of imported raw material.
b) Reduced the cost of the products by substituting less expensive
indigenous raw materials
iii) Expenditure on R & D during the year: NIL
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION EFFORTS IN BRIEF, MADE
TOWARDS TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION
The technology passed to us by the Collaboration was not quite suitable to
India and was completely redeveloped by us.
Thus there was no need for Technology absorption or adoption
The Technology that we are using is totally developed by us.
Benefits derived as a result of the above efforts
The dependence on foreign collaboration has been totally eliminated
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Total Foreign Exchange used and earned
Foreign Exchange spent Rs. 281,051 (1997-98)
Foreign exchange earned NIL
M/s. Chandiok & Guliani, Chartered Accountants, retire at the ensuing
Annual General Meeting and have further expressed in writing their
inability to continue as Statutory Auditors for the financial year 1998-99.
On subsequent notice from a member proposing the name of M/s B.K. Anand &
Co., Chartered Accountants, they are eligible for appointment as auditors.
PROGRESS DURING THE YEAR
1. The Company has submitted a Rehabilitation scheme to the IDBI, the
Operating Agency (OA) appointed by the honorable BIFR. But the same was not
acceptable to them. They subsequently called a joint Meeting of the
Financial Institutions and the Bank on the 18th of May, 1998. In this
meeting both the Financial Institutions and the Bank indicated that they
would prefer a One time settlement (OTS) as the scheme of rehabilitation
submitted by the Company was not acceptable to them. The promoters promised
to try their best to find means for an OTS but also said that they would
submit a revised Rehabilitation scheme to the O.A. The revised scheme was
subsequently submitted but response from O.A. in this regard has not yet
Meanwhile the Company inspite of being declared a Sick Company as per
section 3(1)(0) of SICA, 1985 by the honorable BIFR has shown improved
results. In fact, the Company has been able to reverse the trends of cash
losses by making a cash profit in the quarter ended 30th September, 1998.
Under the prevailing difficult circumstances, this creditable turn around
has given the Management hope for better things to come in the future.
The Board acknowledges with gratitude the co-operation and assistance
provided to it by the Company's Bankers, Financial Institutions, Government
Agencies. The relationship with the employees remained cordial and the
Directors wish to place on record their appreciation for the contribution
made by them. The Directors also thank the Share Holders for their
On behalf of the Board
Place: Gurgaon R.D. Sharma
Date: 7th December, 1998 Chairman