pashupati seohung ltd Directors report

PASHUPATI SEOHUNG LIMITED ANNUAL REPORT 1998-99 DIRECTORS REPORT To The Members of PASHUPATI SEOHUNG LIMITED Your Directors have pleasure in presenting the seventh Annual Report on business and operations the Company together with Audited Statements of the Accounts for the year ended 31st March,1999. The overall performance of the Company was not as per expectations during the under review due to: i) Sudden collapse in Russian economy, being the major market for your Companys product, during sectioned half of 1998-99, the demand for Condoms was drastically reduced and hence affected the turnover. ii) Shortage of Working Capital resulted in under utilisation of plant which ultimately resulted in downfall in production & hence increase in fixed cost. iii) During the precious year, (i.e. 1997-98), certain claims payable by the Company were written bank under the head Other income, Which increased profitability in last year. OPERATIONS During the period under review your Company cold not achieve the projected targets due to reasons stated here in above. The summarised analysis of salient operational points are highlighted : i) Production: Your Company produced 63.80 million pieces of Male Rubber Prophylactics (Condoms) during the period under review registering utilisation of the 79,75% if installed capacity. ii) Turnover : The Company has achieved a turnover of Rs. 690.50 lacs as against Rs. 652.06 lacs for the previous year, thereby registering a growth rate of 5,89% over last year. ii) Profits : The Company registered a profit of Rs. 150,56 lacs before providing interest, depreciation & tax, and net profit of 29,87 lacs during the year under review. EXPORTS During the year under review the Company exported 74,45 MPC Male Rubber Prophylactics amounting Rs. 517.77 lacs. The export turnover during current year is expected to be about double of export turnover during the year under review. DIVIDEND Due to insufficient profit, your directors do not recommend any dividend for the period under review. FUTURE OUTLOOK During the year under review the Company could not do well, but in the current year Company is performing extremely well. During the period of the current year the Company has made significant improvement in terms of both production as well as turnover. Your Company has orders in hand for supply of condoms up to November 99. During period of the year 1999-2000 the Company is operating at 100% of installed capacity. Due to revival of Russian Economy, The demand has further improved. Considering the continuous increase in demand, the Company has already undertaken the expansion programme and negotiations are in Final stage. The Company is hopeful to encourage its shareholders during current year. FIXED DEPOSITS During the year under review, the Company came out with a fixed deposit scheme for public. The response of the public was quite satisfactory. AUDITORS REPORT Qualification is Statutory Auditors Report regarding (i) Valuation of scrap, your Company being a 100% EOU, can not sell the scrap without obtaining the permission from central Excise. The Company has already filed an application for the same with the authority concerned & a part of the permission and the same has been accounted for in the current year. (ii) regarding provision for Gratuity, the same has been accounted for on cash basis & (iii) regarding dues to Small Scale Industrial Undertakings, the Company mainly imports most of the raw-materials required for the production of condom. However the outstanding has not been assessed. PARTICULARS OF CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO. As required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report Board of Directors) Rules, 1988 the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo are set out in Annexeure A to the Directors Report. PARTICULARS OF EMPLOYEES Companies (Particulars of Employees) Rules 1975 as amended read with Section 217(2A) of the Companies Act, 1956 are not applicable to the Company as there are no employees drawing the minimum salary envisaged in the rules. INDUSTRIAL RELATIONS During the year under review, Industrial Relations at the Unit of the Company remained peaceful. Your Directors wish to place on record their sincere appreciation for the excellent team work which the employees of the Company at all levels contributed for the excellent performances of the Company at its Singur. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. K. L. Murarka and Mr. R. N. Jhunjhunwala, Directors, retire by rotation at the Seventh Annual General Meeting, and being eligible, offer themselves for re-appointment. AUDITORS The Shareholders are requested to appoint M/s. B. Chhawachharia & Co., Chartered Accountants, Calcutta the existing Auditors as the Auditors for the current year. The existing Auditors have under Section 224(1B) of the Companies Act, 1956, furnished a certificate of their eligibility for the appointment. STATUS ON Y2K PREPAREDNESS LEVEL Your Company has taken appropriate and effective steps to avoid Y2K risks. The Company has replaced the hardware involved in date critical operations, wherever requited. The company has also upgraded the operating system and modified its software application to make it Y2K compliance. The necessary expenditure to ensure Y2K compliance amounts to about Rs. 2.00 lacs which is expected to be incurred by November 1999. ACKNOWLEDGMENT The Directors acknowledge the support extended to the Company by the Term Loan Tending Financial Institutions, Bankers, Govt. Organisations, Foreign Collaborators and Investors for their assistance and Co-operation. The Directors also thank all Employees of the Company for the valuable services and support during the year under review. For and on behalf of the Board Place : Calcutta M. L. Muraka Dated : 7th August, 1999 Managing Director A. TECHNOLOGY ABSORPTION i) Research & Development (R & D) Commercial Production at the Companys Plant has been declared from 6th October 1994. The Company has at present full fledged Quality Assurance Laboratory equipped with state-of-the art testing facilities. Product Development activities are also being carried out in the Company has formulated plants to set up a dedicated R & D Centre for improvement of the product of the Company manufactured and the processes thereof. ii) Technology Absorption, Adaptation and Innovation The Companies Plant for manufacture of Male Rubber Prophylactics has been set in technical collaboration with Seohung Industrial Co. Ltd.,Seohung, South Korea for which necessary agreement was concluded on 27th April 1992. The agreement included import of technology. The agreement aforesaid provide continued long term support for the improvement of technology and product development by the Collaborators. The plant has since been operating satisfactorily and the quality of the product accepted by Foreign Countries. The technology may therefore, be considered to have been fully absorbed. B. FOREIGN EXCHANGE EARNINGS AND OUTGO Rs. in lacs i) Foreign Exchange earned 571.77 ii) Foreign Exchange Used 183.74 For and on behalf of the Board Place : Calcutta M. L. Murarka Dated : 7th August, 1999 Managing Director