vitara chemicals ltd Directors report

VITARA CHEMICALS LIMITED DIRECTORS REPORT Company within the meaning of Section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985. OPERATIONS The operations of the Company have been badly affected on account of slump in the bulk ding industry, increased manufacturing cost and cost on effluent treatment and cut-throat competition of Multinational Companies. Due to the various reasons stated above the Company could not operate its plant at its optimum capacity and resulted in a huge loss. The bulk drug industry is presently passing through a difficult phase. The general recession and severe financial crisis in the industry has affected the operations of your Company which has resulted in huge losses during the year under review. During the year under review your Company has incurred Loss of Rs. 5,155.34 Lacs which has completely eroded the Net worth of the Company and it has become a sick Company within the meaning of Section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act,1985. DIVIDEND Your Directors regret to state that on account of heavy losses, no dividend has been recommended on the Equity Capital as well on the Preference Capital of the Company for the financial year ended 31st March, 1999. FUTURE OUTLOOK Under the present circumstances and conserving the inherent strength of the Company, the total operations of the Company are being reorganised concentrating mainly on the core activities. Your Directors are giving more stress on better utilisation of all the available resources and cutting down overheads by bringing cost effectiveness in all fields. Zero countervailing duty on the companys export to the European Union will boost companys effort for export of companys product in European market LISTING FEES OF STOCK EXCHANGES Due to unavoidable financial problems, your company could not paid the listing fees for the financial year, 1999-2000. However the company is in a process of complying the same to avoid any consequences on listing of Equity Shares. FIXED DEPOSITS During the year under review, your Company has not accepted any fixed deposits from the public. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE Information as per Section-217(1)(e) read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 are given in the annexure forming a part of this Report. PARTICULARS OF EMPLOYEES Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars in the Report of Board of Directors) Rules, 1988 is forming a part of this Report. In terms of the Provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all members of the Company excluding the aforesaid information. Any member interested in obtaining a copy of the particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956, may write to the Registered Office of the Company. YEAR 2000 COMPLIANCES (Y2K) The Directors wish to inform you that appropriate and effective steps are taken to review the risk associated with the year 2000 problem, both with regard to internal use of the computer system and embedded chips and also relationship with the third parties, as well as to be Y2K compliant with in specified time. The total costs of ensuing year 2000 compliance have not yet been quantified, but is not expected to be significant. DIRECTORS During the year under review Mr. V.M. Bhatia, Mr. D.B. Mehta, Mr.R.S.Laud and Mr. A.T. Kurian the Non Executive Directors of the Company have resigned from the Board of the Company with effect from 31st October, 1998. The Board places its appreciation for their valuable guidance during their association with the company. Mr.P.P. Mavlankar, Mr. N.D. Shenoy, Mr. J.L. Dhawan have resigned as Whole Time Directors and from the Board of the Company with effect from 31 st December, 1998. The Board places its appreciation for the valuable contribution made by them during their association with the Company . The Nomination of Mr. G S. Srinivasan as a Nominee Director of IDBI on the Board of the Company has been replaced with Mr. S. Vrat with effect from 5th January, 1999. The Board took note of the same at its Meeting held on 29th January, 1999. The Board places its appreciation for the valuable co- operation and co-ordination extended by Mr. Srinivasan to the Company. The Board of Directors welcomes Mr. Vrat on the Board of the Company. In accordance with the provisions of Articles 155 of the Articles of Association of the Company and Companies Act, 1956, Mr V.R. Nair, Director of the Company retires by rotation at this Annual General Meeting and being eligible offers himself for re-appointment. AUDITORS & AUDIT REPORT Pramod C. Shah Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, have consented to act as the Statutory Auditors of the Company, if re-appointed. The Company has received a letter from them to the effect that their re appointment, if made, the same will be within limits specified by sub- section (1B) to Section 224 of the Companies Act, 1956. You are requested to appoint the Statutory Auditors for the Financial Year 1999- 2000 and authorise the Board of Directors to fix their remuneration. The observations of the Auditors in their report read with the Notes to the Accounts are self-explanatory in nature. ACKNOWLEDGEMENTS Your Directors acknowledge with gratitude and wish to place on record, their appreciation for the support and co-operation received by the Company from the Central Government, State Governments, Financial Institutions, Bankers to the Company, Shareholders and Staff at all levels during the year. For and on behalf of the Board of Directors UMESH .V. BHATIA Chairman & Managing Director Place: Mumbai Date :19th May,1999. ANNEXURE TO THE DIRECTORSREPORT Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report. A) CONSERVATION OF ENERGY a) Energy Conservation Measures taken: The proposals initiated during the earlier years were continuing during the year under review. b) Additional investments and proposals, if any, being implemented for reduction in consumption of Energy: Additional investment and proposals include installation of new equipments to be purchased subject to availability of funds c) Impact of measures at(a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: The impact of measures will reduce consumption of power and reduction in the manufacturing cost. d) Total energy consumption & energy consumption per until of production (B) CONSUMPTION PER UNIT OF PRODUCTION: The operations being of a multi-cycle type, consumption per unit for each product cannot be meaning fully determined. The Company therefore,is not in a position to give the information required as per the form. B) TECHNOLOGY ABSORPTION Efforts made towards Technology absorption, adaptation and innovation: 1.The Company is self sufficient in respect of technological know-how. 2. The information relating to technology import, year of import and technology absorption are not applicable as the Company has not imported any technology. C) FOREIGN EXCHANGE EARNINGS AND OUTGO a) Activities relating to Exports,lnitiative taken to increase Exports, Development of New Export Market for products. b) The foreign exchange earned and used: Rs in lacs For the year For the year 1998-99 1997-98 1. Foreign Exchange Earnings 2,783.88 2,054.88 2. Foreign Exchange Outgo 3,742.16 7,413.08 For and on behalf of the Board of Directors UMESH V.BHATIA Chairman & Managing Director Place: Mumbai Date : 19th May,1999.