kaprinas pharmaceuticals chemicals ltd Directors report

KAPRINAS PHARMACEUTICALS & CHEMICALS LIMITED DIRECTORS REPORT TO THE MEMBERS The Directors of your Company has pleasure to present the Tenth Annual Report of your Company together with audited accounts for the year ended 31 st March, 1998. PERFORMANCE REVIEW During the year under review the turnover of the Company has Decreased from Rs. 2786.16 Lacs to Rs. 734.34 Lacs due to the overall recession in the market and with entery of foreign companies in the bulk drug market during the year under consideration net worth of Co. has been completely eroded. To make it viable Board of Directors have decided to approach Board for Industrial and Financial Reconstruction, New Delhi for declaring the Co. as Sick and give Financial package as formulated under Sick Industrial Companies (Special Provision) Act, 1985. PROJECTION VS PERFORMANCE Rs. in Lacs Projection for the Actual Decrease Year 1997-98 1997-98 % 1. Sales & Other Income 2542.64 734.34 (-) 71.12 2. Net Profit/(Net Loss) 321.34 (-) 420.86 (-) 230.97 3. E.P.S. 7.97 --- --- REVIEW OF OPERATIONS During the year 1997-98 the Company has incurred heavy losses because of unexpected factors beyond its control. The main reasons for losses is that there is overall recession in the market and foreign companies have entered the bulk drug manufacturing resulting in decline in exports and increase in unhealthy internal competition. CHANGE OF METHOD OF DEPRECIATION During the year under consideration co has decided to change the method of depreciation from St. Line to WDV method due to the reason that realistic value of Fixed Assets can be shown. DEPOSITS During the period under review the company has not invited/accepted any deposit from the public. AUDITORS The Auditors M/s Khanna Anil Associates, Chartered Accountants retires at the conclusion of ensuing Annual General Meeting. Being eligible offers themselves for re-appointment. AUDIT REPORT The notes referred to by the auditors in their report are self explanatory hence do not require any further explanation. PARTICULARS OF EMPLOYEES The information required under section 217 (2) (A) of the Companies Act, 1956 read with rules framed thereunder is NIL PERSONNEL Relation with employees throughout the year was cordial. INSURANCE All the properties and insurable interests of the Co. including Building, Plant & Machinery and Stocks wherever necessary and to the extent required have been adequately insured. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUT GO: Information in accordance with the provisions of section 217(1)(E) of the Company Act, 1956 read with companies (disclosure of particulars in the report of Board of Directors) Rules 1988 regarding conservation of energy technology absorption and foreign exchange earning and outgo is given in the annexure forming part of the Report. ACKNOWLEDGEMENT The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. Our thanks are also due to bankers, shareholders and other business constituents for their continued supports. ON THE BEHALF OF THE BOARD OF DIRECTORS KAPRINAS PHARMACEUTICALS & CHEMICALS LTD. DR. N.P.S. SANDHU MANAGING DIRECTOR DATED: 10.10.98 PLACE: KHANNA ANNEXURE - I Conservation of energy, technology absorption and foreign exchange earning and outgo, pursuant to section 217 (1) (E) of the Companies Act, 1956. Forming par of Directors report for the year ended 31 st March, 1998. A. CONSERVATION OF ENERGY B. TECHNOLOGY ABSORPTION FORM "B" (See Rule 2) Disclosure of particulars with respect to Technology Absorption (To the extent applicable) A. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONS The company belives in products quality technical efficiencies and upgradation of manufacturing facilities with innovative process changes. I) RESEARCH & DEVELOPMENT The company has been carrying out R & D in the following specific areas. I) R & D Efforts of the company are constantly directed towards development of new products, cost reduction, process optimization and process economisation. II) Company based on its strength of R & D has launched new products which are intermediates for several active molecules during the last year in the international market. 2) BENEFITS DERIVED I) Cost Competitiveness, effectiveness and high quality. II) Scientific working substantially improved machine utilisation. process, systems and services. 3) FUTURE PLAN OF ACTION I) High value added intermediates and active pharma molecules as well as herebal products are being developed II) Efficiency improvement to match international standards. III) Development of intermediates for captive consumption which will also be import substitutes. 4) Expenditure on R & D Amount in Lacs 1997-98 1996-97 a) Capital Expenditure Nil 4.17 b) Recurring Expenditure 1.08 3.04 c) Total Expenditure 1.08 7.21 d) Total R & D Expenditure as percentage of turnover 0.15 0.27 5) DETAIL OF IMPORTED TECHNOLOGY IN LAST FIVE YEARS I) Technology Imported Nil II) Year of Importing Nil III) Has Technology been fully absorbed Nil IV) If not fully absorbed areas where this has not taken place, reasons, therefore and future plan of action. Foreign Exchange earning and outgo 1997-98 1996-97 Foreign Exchange Earned 1.03 112.26 Foreign Exchange used Nil 7.26