arun processors ltd Management discussions

ARUN PROCESSORS LIMITED ANNUAL REPORT 2003-2004 MANAGEMENT DISCUSSION AND ANALYSIS ABOUT THE INDUSTRY The present budget has given option to adopt cenvat or non incidence of excise duty on cotton fabrics. The Company is working out the advantages as to which option will be beneficial to the company and its customers. The GATT agreement is coming to vogue and the quota system will be over by December, 2004. Since the Company has come out of 100% EOU status by debonding, it is expected that the products of the Company will have demand in the market since the Company has been consistent in its quality. Your Companys chain capacity utilization continues to be through undertaking job work and stood at more than 100%. The profits were restricted due to concentration mainly on job work. Your Company availed OTS scheme putforth by ICICI Bank and paid Rs.137 Lakhs to the said Bank and Rs. 4 lakhs has been paid to SBT, SBM and SBI during the year under review This has created a working capital crunch. Your Board feels confident that with the increase in demand the fabrics can be marketed suitable. REVIEW OF OPERATIONS The shortage of working capital Crunch to the company continued in the current year also. However the company could methodically improve its facilities and improve production. Your management hopes, that barring unforeseen circumstances, the company will overcome its present difficulties and better days are ahead for it and its shareholders. FUTURE PROSPECTS The Company has entered into one time settlement which is Similar to the one obtained from ICICI Bank. the same concessions are extended by the term lending banks. The Company is making alternative arrangements to meet out the one time settlement and also working capital arrangements. Your Board feels that the light is visible at the end of the tunnel. THE FOLLOWING IS DONE FOR ENHANCEMENT OF PRODUCTION The Company plans to enter into garment manufacturing for which infrastructure facilities are made available. Once the fund position improves, new machinery can be installed and garment manufacturing can be commenced. By order of the Board For Arun Processors Limited Place: Singampettai. Date : 30-07-2004. Chairman of the Meeting