arihant threads ltd Directors report

Annual Report 1999-2000 ARIHANT THREADS LTD. DIRECTORS REPORT To The Members, Arihant Threads Ltd. Your Directors have pleasure in presenting before you this 8th Report on the affairs of the Company alongwith Audited Accounts for the period March 31, 2000. FINANCIAL RESULTS During the year the Company has achieved turnover of Rs.4277.10 lacs out of which export turnover is Rs. 2588.62 lacs and has earned precious foreign exchange for the country. The Company has earned a Cash Profit of Rs. 265.83 lacs. At present 18144 spindles are in operation. During the year products of the company have carved a niche for it self in the countries like Israel, Malaysia, Russia, Hongkong, Slovenia and Bangladesh. DIRECTORS In accordance with the provisions of the Companies Act, 1956, Mr. S. K. Duggal and Ms. Ruchika Jain, the retiring Directors, being eligible and offer themselves for re-appointment. AUDITORS M/s. Dass Khanna & Co., Chartered Accountants, Auditors of the Company retire at the forthcoming Annual General Meeting being eligible seeks re- appointment. AUDITORS REPORT With regard to the Auditors Report the Directors have to comment as under Sl. No. of Comments offered Auditors Report e i) Plant & Machinery for Spinning plant is manufactured and designed to operate for 24 hours and thus rate of Depreciation applied by the Company pertaining to Continuous Process plant is justified. e ii) The Company has taken loan for the project which is partially completed and thus part of interest pertaining to uncompleted project has been capitalised. e iii) All expenses as reported are accounted for by the Company on cash basis as consistent accounting policy. e iv) During the normal course of business the Company issue cheques to various business constituents and also receives cheques from various parties. As at closing of financial year there are many cheques issued/deposited which are yet to be routed through bank. Y2K COMPLIANCE Your company has successfully managed Y2K without any disruption. All critical IT systems covering business applications, process control, plant automation and other areas are Y2K compliant. Details regarding Y2K compliance in accordance with clause 32 of Listing agreement with Stock Exchanges are given in Annexure- A to the Directors Report. LISTING COMPLIANCE The shares of the company are listed on Ludhiana, Delhi, Mumbai, Calcutta, Madras, Ahemdabad and National Stock Exchanges. The listing fee for all the stock exchanges has been paid. PERSONNEL Information as per Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rule, 1975 as amended is NIL. DISCLOSURE OF PARTICULARS UNDER SECTION 217(1)(E) Disclosure of particulars under Section 217(1)(e) of the Companies Act, 1956 under the Companies (Disclosure of Particulars in respect of Board of Directors) Rule 1988 as given as per Annexure B and forms part of this Report. ACKNOWLEDGMENT The Directors place on record their sincere thanks to Industrial Development Bank of India, UCO Bank, The Punjab State Industrial Development Corporation Ltd., Shareholders, Employees of the Company, and all Business Constituents for their valuable co-operation extended to the Company from time to time and hope it will continue in future as well. By order of the Board For Arihant Threads Limited, Place: Chandigarh (K.L.Jain) (S.K.Duggal) Dated: 04-08-2K Vice-Chairman Director ANNEXURE TO DIRECTORS REPORT Annexure-A Details regarding Y2K preparedness level required under clause 32 of the Listing agreements. 1. Risk to the Company due to Y2K bug: All business critical IT systems and minor equipments relating to process control were open to the risk of Y2K bug. All these systems and equipments were Y2K complied by January 2000. 2. Cost to address Companys Y2K issues: Upto 31st March, 2000. Rs.1.27 Lacs has been spent towards replacement and upgradation of both IT and Process Control Systems. 3. Contingency Plans: While all efforts had been made to ensure full Y2K readiness through extensive testing and simulation, contingency actions as follows were also planned: a. Running critical beginning of the month applications in end December, 1999 instead of January, 2000. b. Testing end January, 2000 applications at the beginning of the month. c. Ensuring pre-run backup prior to critical runs. d. Fall back using PCs and manual systems. 4. Current Status: All computer systems of the Company rolled over to the new millennium without any problem. Annexure-B Information as per Section 217(1)(e) read with the Companies (Disclosure of Particulars in the Report of Board of Director(s) Rules, 1988 and forming part of the Director"s Report for the year ended 31st March, 2000. (i) CONSERVATION OF ENERGY The Company has taken the following steps for conservation of energy. i. Optimisation of each production unit. ii. Reduction in idle run of units. iii. Installation of electric motors of optimum capacity, maximum utilisation of natural light in the plant, introduction on nylon belts to replace conventional belts and use of energy saving devices for lighting circuits etc. iv. As a result of implementation of energy saving schemes, the Company has been able to save on fuel consumption to a great extent. ii) TECHNOLOGY ABSORPTION The company has brought and successfully absorbed the latest Ring Spinning Technology. 1. RESEARCH & DEVELOPMENT a) Specific areas in which R & D carried out by the Company Research and development has continuously been carried out for improvement in quality of existing products development of new and improved products and production processes for better productivity b) Benefits derived as a result of the above R & D As a result of R & D and improved quality of yarn, orders are being received from Indian Market as well as from Foreign market. c) Future plan of action Development of new fancy yarns and improvement In certain production processes are planned. d) Expenditure of R & D Expenditure of R & D is continuous process and the expenditure incurred thereon has not been segregated and accounted for separately. Hence, it is not possible to give the same in the required format. 2. TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION A) Efforts, in brief made towards technology absorption, adaptation and innovation. The company has brought and successfully absorbed the latest Ring Spinning Technology. B) Benefits derived as a result of the efforts e.g. product improvement, cost reduction, product development, import substitution etc. Improved quality product. 3. Improved Technology (Imported during the last 5 years) a) Activities relating to Exports, initiatives taken to increase export, development of new export markets for products and services and export plans. Efforts are being made by the company to develop export market for export of yarns. b) Total Foreign Exchange Earned and Used. Rs In lacs Particulars As at 31-03-2K As at 31-03-99 Earned 2323.71 1691.88 Used Raw Material Nil Nil Spares 9.75 Nil Travelling 8.93 6.67 Interest on FCL on cash basis 95.00 62.50 Export commission & Claims 24.02 16.90 For Y2K Compliance 0.36 Nil By order of the Board For Arihant Threads Limited, Place: Chandigarh (K.L.Jain) (S.K.Duggal) Dated: 04-08-2K Vice-Chairman Director