arlabs ltd Directors report

ARLABS LIMITED DIRECTORS REPORT To the Members, The Directors hereby present FORTY FIFTH Annual Report together with the Audited Financial Statements of your Company for the year ended on 31st December,1998. Operations: The current accounting year is for a period of 12 months against Previous Year of 9 months and the results should be viewed accordingly. The Company presently inspite of constraints on account of working capital, has achieved a sales turnover of around 34 crores during the year under review compared to Rs.21 crore for the previous accounting period. The Gross Loss on annualised basis has decreased from Rs. 93.28 Lacs to Rs. 59.35 Lacs. The Net Loss is higher on account of certain prior year Adjustments and Abnormal non-recurring items. Plans for Restructuring of Business The Company has been declared as Sick Industrial undertaking by Board for Industrial and Financial Reconstruction (BIFR) and ICICI Ltd., have been appointed as Operating Agency. The Company is in process of submission of detailed restructuring proposal for its revival. Fixed Deposit The Company has not accepted/renewed any Fixed Deposits during the year under review. However a sum of Rs.48,000/- remains unclaimed. Insurance Fixed Assets and Inventories of the Company are adequately insured. Safety & Environment: Your Company has improved the safety measures and upgraded the effluent treatment facilities and constantly strives to protect and preserve the environment. Directors In accordance with the provisions of the Companies Act 1956 and the Companies Articles of Association, Shri M.N.Kargatia and Shri. M.K.Deliwala retire by rotation at the forthcoming Annual General Meeting, but being eligible have offered themselves for re-appointment. Employees The statement giving the required particulars under Section 21 7(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors report for the year is as under: Conservation of energy, technology absorption and foreign exchange earnings/outgo. The information required under Section 217 I(e) of the Companies Act 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 with respect to these matters is appended hereto and forms part of this Report. Comments on the observations made by Auditors in their Report Item No in the Report: 1. (a) Doubtful debts amounting to Rs. 62,58,5X6/- have not been provided as company has initiated legal proceedings against the said debtors. Provision/adjustments in respect of the sale will be made on the matter being finally disposed off by the courts. (b) The company has maintained the records of fixed assets right from inception however in view of the hazardous manufacturing process and multiple use of major plant/ equipment for different product mix makes it difficult to maintain upto date itemwise particulars of fixed assets. Attempts are being made to keep detailed account of numerous items of fixed assets. (c) Confirmation of balances letters were sent to Creditors and other parties under Loans and Advance and Current Liabilities as also the parties from whom assets have been acquired. under lease or on rental basis, and stock with third parties after the accounts are finalised. 3. The remarks made by the Auditors in their report regarding fully convertible Debentures allotment monies are self explanatory. Auditors The members are requested to appoint Auditors and fix their remuneration. The Company has received a certificate pursuant to the provision of Section 224(1) of the Companies Act 1956 regarding the eligibility for the appointment from M/s. M.P.Chitale & Co. Chartered Accountants, the present Auditors of the Company. Acknowledgment The Directors wish to take this opportunity to place on record the valuable services rendered by all the employees of the Company. The Directors also express their sincere thanks to the Shareholders for their confidence in the Company. For and on behalf of the Board of Directors PRAKASH H. KHATIWALA CHAIRMAN & MANAGING DIRECTOR ANNEXURE TO DIRECTORS REPORT PARTICULARS PURSUANT TO SECTION 217 (i) (e) OF THE COMPANIES ACT, 1956 READ WITH COMPANIES (DISCLOSURE FOR PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES 1988 AND FORMING PART OF THE DIRECTORS REPORT FORM - A CONSUMPTION PER UNIT OF PRODUCTION The Company manufactures a large variety of products before reaching the finishing stage pass through various operations in the different plants. It is, therefore, not feasible to furnish the information in respect of consumption per unit of production. FORM- B Form of disclosure of particulars with respect to Technology Absorption. Research & Development 1. Specific areas in which R & D activities are being carried out by the Company are: In view of the globalisation of trade, new challenges coupled with new opportunities are being created continuously. The Company continues to make inroad in development of in-house technology which have contributed to the Companys growth and performance over the years. 2. Benefits derived as a result of the above R&D: As a result of R&D efforts, there has been an improvement in quality of various products of the Company, to meet specialised market requisments 3. Future plan of Action: The Company has diversified the existing lines of production for getting more benefits of export markets and also proposes to introduce new value added chemicals. 4. Expenditure on R & D: Rs. Rs. a) Capital 37397 2317 b) Recurring 581857 393347 c) Total 619254 395664 d) Percentage of turnover 0.19% 0.18% Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards The Company has not purchased or technology absorption,adaptation got any technology from abroad and innovation. during the year. However the company is in the process of further improving its quality control methods and testing facilities. 2. Benefits derived as a result of R & D Department is engaged in the above efforts e.g. product cost quality Control process improvement reduction, product development technology up gradation development import substitution of new range of pesticides & intermediates, evaluation alternate raw material and minimizing effluent load/recycling of waste etc. 3. In case of imported technology (imported during the last 5 years reckoned from the begining of the financial year), following information may be furnished. a) Technology imported N. A. b) Year of import c) Has technology been fully absorbed? d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. Disclosure of particulars with respect to Foreign Exchange Earnings and Outgo 1. Total Foreign Exchange Earned (Rs. in lakhs) 286.68 619.45 2. Total Foreign Exchange Used (Rs. in lakhs) 2.06 22.44 For and on behalf of the Board of Directors. PRAKASH H. KHATIWALA CHAIRMAN & MANAGING DIRECTOR Place : Mumbai Date : February 23rd, 1999