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Raam Tyres Ltd.

BSE: 523588 Sector: Auto
NSE: N.A. ISIN Code: N.A.
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Raam Tyres Ltd. (RAAMTYRES) - Director Report

Company director report

1996 RAAM TYRES LIMITED DIRECTOR'S REPORT Your Directors have pleasure in presenting the Eighth Annual Report and the Audited Accounts of your company for 15 months period ended 30th September 1996 together with the Auditor's Report thereon. Performance of the Company for the year 95-96 As you are aware we have entered into third year of operation after stabilizing the production in terms of quality and output for the period ended 30th September, 1996 your company has incurred gross loss of Rs. 3,32,78,561/- before providing for Interest and Depreciation on total Sales and Other Income amounting to Rs.95,08,276/-. The Net Loss after Interest & Depreciation amounts to Rs.9,84,00,516/- for the period. The company has done a turnover (Inclusive of Other Income) of Rs.95,08,276 during the 15 months period of operations., presently your company is doing mixing job for MRF your company had to face adverse circumstances during this year on account of discontinuance of VTL's Production and unforeseen labour strike spread over nearly six months. Term loan and Working Capital Limits: The Financial Institutions have funded interest of total of nine quarters upto February 1995, from November 1992. The company has requested for further funding of interest for 5 quarters totaling to 14 quarters up to 15.05.96. Now the Company has approached Financial Institutions for various concessions /reliefs for revival of the unit as the net worth of the company has eroded. As against requirement of Rs.1200 Lakhs only Rs.300 Lakhs have been sanctioned by consortium Banks and 15% of the sanctioned amount due to the company is yet to be disbursed. On the other hand banks have approached Debt Recovery Tribunal for recovery of the dues without giving an opportunity for your Company's Management who are first generation Entrepreneurs to breath and pay back the dues which are not very high compared to our capacity to repay once Factory goes into full production. The job work orders on hand for JKI and MRF and Monotana Tyres will yield monthly Income of nearly Rs.100 Lacs and all dues of the Company can be cleared in an years time. Marketing Arrangements: Your company discontinued Branding arrangements with M/S. VTL due to (i) Paucity of Working Capital requirement to meet the targets of VTL. (ii) Presently due to tailure of VTL to lift tyres in time. Very recently your company has successfully negotiated for manufacturing of tyres on conversion basis with M/s J.K.Industries Ltd., and M/s Monotona Tyres Ltd. No efforts are spared to penetrate replacement market in your Company brand name. We have entered into an agreement to supply every month nearly 36,000 tyres of 2/3 wheelers to M/s Bajaj Auto, Pune through M/s Monotona Tyres Ltd under their brand name for the present. OEM supplies give us very good brand image in the market. Future Out Look: It is a real boom period for Automotive and Tyre Industries which will not abate for quite sometime. Market estimates forecast doubling of demand for tyres by 2001. Though there appears to be excess supply due to extensive capacity expansion in certain segments like Heavy Truck Tyres the scope for four/three wheeler tyres and four wheeler tyres like Jeeps, Cars, Tractor Front. LCV is ever increasing. Directors: Sri C.M. Radhakrishna Nair and Sri.P.Raghavender Rao have resigned from Board of Directors due to some personal reasons. The Board places on record their valuable services rendered to the Company. Sri M.H. Rao has been inducted as Director on 22.10.96 and Sri. T. Sai Kumar was inducted to the Board as an Executive Director of the Company with effect from 22/10/96. Sri T. Sai Kumar shall hold office for a period of 5 years. Auditors: M/S. Upadrashta & Associates Chartered Accountants retire at the conclusion of this Annual General Meeting and being eligible offers for reappointment. The Company has received a certificate from him to the effect that the reappointment, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956. Particulars of Employees: Information pursuant to Sec 217(2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules 1975 as amended by Companies (Amendment) Act, 1988 is annexed to the report. Acknowledgements: The Board takes the opportunity to place on record their gratitude for the whole hearted support and cooperation extended to the company by ICICI, IDBI, IFCI, SBI, SBH and Karnataka Bank Ltd., and APIDC. ANNEXURE TO DIRECTORS' REPORT CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE EARNINGS AND OUTGO Information under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report. FORM A Conservation of Energy: The environmental protection has been given the utmost importance and suitable pollutions control systems have been incorporated in the plant. 1. Power and fuel Consumption 1995-1996 1994-1995 (a) Electricity Purchased: Units 9,38,546 8,06,130.00 Total Amount (Rs.) 28,15,638 19,28,651.00 Rate/Unit (Rs.) 3.00 2.46 (b) Own Generation Through Diesel Generator Nil 5,70,054,00 Units per Litre Nil 4.0Uts/Ltr Cost/Unit (Rs.) Nil 2.0 Rs/Uts. 2. Consumption per Kg (Unit) of production Rs.) 1995-96 1994-95 Electricity Nil 6.08 Diesel (Litr) Nil 4.21 Coal & Others Nil 5.90 FORM B Technology Absorption & Adaption: The technology is being absorbed in an effective manner by the Company, since the trial runs have been completed and commercial production started recently. FORM C Foreign Exchange Earnings and Outgo: Quantity Value (Rs.) Item Current Previous Current Previous Year Year Year Year a) Foreign Exchange Earnings: Us$ Export of goods b) Foreign Exchange Nil Nil Nil 1,60,000 Us$ 5,000 Particulars of Employees: Not Applicable For and on behalf of the Board S. RAMCHANDRA Chairman & Managing Director Place : Hyderabad Dated : 23rd November, 1996.