arun processors ltd share price Directors report

ARUN PROCESSORS LIMITED ANNUAL REPORT 2003-2004 DIRECTORS REPORT Your Directors hereby Present the 13th Annual Report together with the Audited Accounts for the period ended 31st March 2004. Financial Performance 2003-2004 2002-2003 Rs. Lacs Sales 876.33 736.20 Other Income * 1373.71 5.71 Total Expenditure before Interest 719.58 693.87 Profit before Interest and Depreciation 1530.46 40.36 Finance Charges 14.37 7.68 Depreciation 314.82 309.49 Net Profit/(Net Loss) 1201.28 (269.13) * (Includes interest waiver of Rs.1372.84 lakhs under OTS) 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 manafacturing for which infrastructure facilities are made available. Once the fund position improves, new machinery can be installed and garment manufacturing can be commenced. DIRECTORS: Mr. B.R. Shah and Mr. Krishna Koman Nayer. have relinquished their office of directorship during the year. Your Board records its sincere appreciation for the valuable services rendered by Mr. B. R. Shah and Mr. Krishna Koman Nayar during their tenure of office as directors. Mr. K.N. Arthanareeswaran retires at the ensuing Annual General Meeting and being eligible, is seeking re-appointment as Director. Sri. A. Mohan has been re-appointed as Managing Director for a period of 5 years effective from 01-07-2004 on an enhanced remuneration on expiry of his term of office. Necessary proposal seeking members approval has been placed. No Director of the company is disqualified tinder section 274(1)(g) of the companies Act, 1956, from being appointed as director of this company. Auditors: M/s. N.C. Rajagopal & Co., Auditors of the company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. AUDITORS REMARKS: Regarding the remarks of the Auditors in their report, your Board wishes to clarify as follows: The BIER is bound to issue an order commensurate with the one time Settlement offer made by the Lending institution and the Bankers. Hence your Board feels it proper to make necessary adjustments in the Accounts. Because of this, the Board also feels that there is no necessity to provide for interest on these loans. Regarding Provident fund dues, the Board is seized of the matter and necessary arrangements are being nude to clear the dues. The transfer of amount from Sundry creditors to unsecured Creditors was necessitated because the amount was due to an over run in the project cost and normally it would have been covered under "Secured Loan" had it been within the project cost. The company is negotiating with the Private Sector Bank for one time settlement and depending on the outcome, making a provision for interest or not will be considered. The company has written to its Creditors and Bankers and Debtors for confirmation of balance. Deposits: The Company has not accepted any deposits within the meaning of section 58A of the Companies Act, 1956 read with Reserve Bank of Indias Directions for acceptance of Deposits by Non-Banking Non-Financial Companies. Statutory Information: None of the employees of the company are drawing remuneration in excess of the limits prescribed under section 217(2A) of the Companies Act, 1956, during the year under report. Appointment of whole time company secretary: The Company being setup in a backward area and also not in a sound financial position, it could not appoint a secretary inspite of its best efforts. Directors Responsibility Statement: Your Directors in terms of Section 217(2AA) of the Companies Act, 1956 confirm that: (i) All applicable accounting standards have been followed in the preparation of the annual accounts. (ii) Your directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2004 and of the profit of the company for the 12 months period ended that date. (iii) Proper and sufficient care has been taken for the maintenance of adequate accounting recordsin accordance with the provisions of the Act for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities. (iv) The annual accounts have been prepared on going concern basis. Conservation of Energy, Research & Development: The information required under Section 217(2)(e) is annexed to this report and forms part of this report. Information Required as per listing Agreement with Stock Exchanges: Cash Flow Statement is enclosed. Corporate Governance: A separate section on corporate Governance is included in the AGM. Report and the certificate from the companys Auditors confirming the compliance of conditions on of corporate Governance stipulated under clause 47 of the listing agreement of the stock exchange is annexed thereto. Acknowledgement: Your Directors wish to express their full appreciation for the assistance and co-operation extended to us by ICICI Bank. State Bank of India. State Bank of Mysore and State Bank of Travancore. The Directors also wish to thank all the employees for their support and co-operation. Your Directors also thank all Share holders for their unstinted support extended and confidence reposed in the management of the company. By order of the Board For Arun Processors Limited Place: Singampettai. Date : 30-07-2004. Chairman of the Meeting. FORM-A (SEE RULE-2): FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY A. POWER AND FUEL CONSUMPTION: Standard Current Previous year year 1. Electricity: (a) Purchased Units 1498952 1173912 Total Amount (Rs.) 7226784 5626843 Rate/Unit(Rs.) 4.82 4.79 (b) Own Generation: (i) Through diesel generator Units 78197 152947 Units per ltr or diesel Oil 2.63 2.58 Rate/Unit (Rs.) 10.94 7.89 (ii) Through steam turbine generator N.A N.A 2. Coal N.A N.A 3. Furnace oil (Ltr) 1102132 890271 4. Diesel (Ltr) 29760 59310 5. Diesel (Rs.) 789333 1206743 B. CONSUMPTION PER UNIT OF PRODUCTION: Electricity (Units) 1.20 1.39 Furnace Oil (Ltr) 0.84 1.04 Cost/Kg of Fabric 17.45 14.21 FORM-B (See Rule 2) FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION RESEARCH & DEVELOPMENT (R&D): 1. Specific areas in which R & D carried out by the Company. - Colour Matching using Computer. 2. Benefits derived as a result of the above R & D: - Development of new products and offering greater range to customer. - Production of shade right first time. 3. Future plan of action: - To develop new products/processes. - To identify energy saving methods 4. Expenditure on R&D: a. Capital -NIL- b. Recurring -NIL- c. Total -NIL- d. Total R & D Expenditure as a percentage of total turnover -NIL- TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION: 1. Efforts in brief, made towards technology absorption, adaptation and innovation: Consultants on knitting, processing and finishing from the machinery manufacturers dye manufacturers and leading professionals were utilised to absorb and adapt technology in addition to our technical collaborators towards innovation. We have standardised process routes to meet the customer requirements. Besides souring of high quality raw materials with less variations and committed delivery schedule is being done on a continuous basis. 2. Benefits derived as a result of above efforts. We are able to despatch quality processed fabric to leading garment manufacturers for United Kingdom and Switzerland. We are also being guided to elevate us to further high quality markets. 3. In case of imported technology (imported during the last five years recknoned from the beginning of the financial year) following information may be furnished: a) Technology Imported Process technology input output norms, wastage parameters, utility norms and recipe for mercerising, bleaching, dyeing and finishing. b) Year of Import-1993. c) Has technology been fully absorbed.