The Directors hereby submit the Seventeenth Annual Report together with
the Audited Accounts of the Company for the year ended 31st March,
FINANCIAL RESULTS :
The financial results of the Company for the year ended 31st March,
1999 are summarised below :
(Rs. in lacs)
Current year Previous year
Sales and other income 4,600.55 3,505.46
Gross Profit/(Loss) for the year 363.83 (123.44)
Add : Interest 262.12 183.01
Depreciation 62.88 60.04
Prior period Taxation 0.63 --
Net Profit/(Loss) for the year 38.20 (366.49)
REVIEW OF OPERATIONS :
During the year, the total income increased to Rs. 4,600.55 lacs as
compared to Rs. 3,505.46 lacs in last year. The Company posted a
profit of Rs. 38.20 Lacs as compared to a loss of Rs. 366.49 Lacs in
the previous year. Though the average sales realisation were lower as
compared to the previous year, on account of higher volumes achieved,
tight control over costs, increased production efficiency and marketing
and financial support from Sun Pharmaceutical Industries Ltd, the
Company was able to turn-around and post net profit for the year under
Due to inadequacy of profits and high accumulated losses, the Directors
regret their inability to recommend any dividend for the year.
STATUS ON BIFR :
The Board for Industrial and Financial Reconstruction (BIFR) at its
hearing held on 31st March, 1999 declared the Company as Sick
Industrial Company under the provisions of Sick Industrial Companies
(Special Provisions) Act, 1985 (SICA) and appointed ICICI Limited as
the Operating Agency (OA) for submitting a report on the rehabilitation
package of the Company. Further, BlFR has in its hearing held on 15th
October, 1999 directed the OA to submit the revised rehabilitation
proposal based on the Company's merger with Sun Pharmaceutical
Industries Ltd. ICICI Ltd has appointed Messrs. Price Waterhouse as the
valuers for recommending the share exchange ratio for the purposes of
Mr. Srinivas Lanka, Director resigned from the Board with effect from
30th January, 1999. The Board places on record 4 appreciation of the
services rendered by Mr. Srinivas Lanka during his association with the
Company. Mr. Girish R. Desai was appointed as a Director by the Board
in the casual vacancy created by the resignation of Mr. Srinivas Lanka.
Mr. R. N. Sethna, Mr. D. T. Desai and Mr. Harin P. Mehta, Directors
retire by rotation at the ensuing Annual General Meeting and being
eligible have offered themselves for re-appointment. Mr.H.I.Gandhi's
term of appointment as the Managing Director expired on 30th November.
1998. The Directors have re-appointed him as the Managing Director of
the Company for a further period of two years from 1st December, 1998
subject to the approval of the shareholders of the Company.
During the year, Company neither accepted nor renewed any deposits.
There is a proposal to appoint Messrs. Price Waterhouse & Co.,
Chartered Accountants, Mumbai as Auditors of the Company in place of
the retiring Auditors Messrs. Valia & Timbadia, Chartered Accountants,
Mumbai. The retiring auditors have informed the Company that they do
not wish to seek re-appointment as Auditors of the Company at the
forthcoming Annual General Meeting.
The Board of Directors would like to thank Messrs. Valia & Timbadia
Chartered Accountants, Mumbai, the outgoing Auditors, for their
services rendered to the Company during their association as Statutory
STATUS OF Y2K COMPLIANCE :
The Company has ensured that all the hardware and software are Y2K
compliant. The Company has also taken all measures to meet any
contingency that may arise.
Industrial relations with Company employees during the year under
review remained cordial. The Directors take this opportunity to thank
all the employees of the Company for their excellent co-operation.
No particulars pursuant to Sections 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules 1975 as amended,
are given, since the Company has no person in its employment drawing
salary in excess of Rs 600,000 per annum or Rs. 50,000 per month
INFORMATION AS PER SECTION 217(1)(e) READ WITH COMPANIES (DISCLOSURE OF
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1998 AND
FORMING PART OF THE DIRECTORS' REPORT
I. CONSERVATION OF ENERGY :
(a) Energy conservation measures taken -
The Company continues to reap benefits of the insulation work done in
the earlier years.
(b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy -
The Company has started to generate steam through Boiler using natural
gas in a phased manner. This has resulted in saving of energy.
(c) Impact of the measures at (a) & (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods -
Due to implementation of the above, the Company continues to save on
the cost of utilities.
II. TECHNOLOGY ABSORPTION :
Efforts made in technology absorption as per Form - B of the Annexure
to the Rules :
1. Research & Development (R & D) :
(a) Specific areas in which R & D carried out by the Company :
Regular R & D activities are carried out in the in-house R & D Centre &
Quality Assurance Laboratory for new product synthesis, ecofriendly
process development, yield improvement, cost reduction, recyclability,
improvement in the Quality and stability of the existing products.
(b) Benefits derived as a result of the above R & D :
Due to development of the process cost reduction, import substitution
and reduction in consumption of the solvent are achieved. Thus the
efficiency of operations is expected to improve.
(c) Future plan of action -
Improvement in certain production areas are being planned for
increasing productivity, quality, recyclability and development of
(d) Expenditure on R & D * (Rs. In lacs)
i. Capital --
ii. Recurring 7.43
iii. Total 7.43
iv. Total R & D expenditure as a
percentage of total turnover 0.16
* In-house quality control laboratory.
2. Technology Absorption, Adaptation and innovation.
(a) Efforts, in brief, made towards technology, absorption, adaptation
& innovation. Continuous upgradation of production process is being
(b) Benefits derived as a result of the above efforts e.g. product
improvement, cost reduction products development, import substitution,
Energy saving etc.
Due to product improvement, intermediate development and recyclability
there is a considerable saving in valuable foreign exchange and also
improvement in availability of such life saving drugs.