1996 JASWAL GRANITES LIMITED DIRECTORS' REPORT Your directors have pleasure in presenting the Eighth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 1996. OPERATIONS The sales turnover for the period ended 31st March, 1996, aggregates to Rs. 453.39 lakhs as against Rs. 923.48 lakhs for the year ended 31st March. 1995. The loss for the period under review amounts to Rs. 73.62 lakhs against Rs. 185.30 lakhs profit in the previous year. DIVIDEND No Dividend is recommended for the year ended 31st March, 1996. MARKETING The World market for processed granite products has taken an upswing towards the latter part of 1994 and is continuing through 1996 and is expected to grow @ 8% p.a. The markets in the Western Europe consisting of the Netherlands, Germany, Austria and Ireland and Northern U.S.A. have shown very good increase for granite Monuments and for granite projects. The development in Singapore, Australia and New Zealand for finished granite project work is also on the upswing with good flow of orders for your Company. Though the competition from the processed granite exporting Countries like Italy and Spain remains quite intense and hence your Company's effort on international marketing remains the main focal point for this year and in the next coming years. Your Company has gained good knowledge on the processed granite projects market which caters to direct marketing of highly technical multistoried building cladding and flooring items to large builders and installing Companies. Your Company has executed large projects for Five Star Hotels, Casino, Bank and Insurance Company Head Quarters and branches and Commercial complexes in Macao, Hong Kong, China, New Zealand, Netherlands and at this moment is executing projects in the Netherlands, Singapore, New Zealand and Australia. To increase the presence in the market place your Company has tied up distribution agency contract in Australia, Netherlands, Germany, Singapore, North America and Ireland with reputed Companies with long standing in these markets which is yielded extremely good results for procurement and execution of orders. Based on extensive demand for Monuments and for project work your Company has enhanced the production of Monument Division and with expansion extensive investments have been made for the project division to achieve high quality standards and faster production for complicated projects. The Company has sufficient orders upto March, 1397 and extending upto middle of 1997. RAW-MATERIALS & QUARRYING ACTIVITIES Realising the markets requirement of black granite, your Company has strived to obtain self-sufficiency in raw-material for black granite with its quarry in Andhra Pradesh while it is working in very close co- ordination with the prime quarry land owners in Orissa, Tamil Nadu and Karnataka which has strengthened its raw-material base to execute the orders on time for the expanded capacity. Your Company is conscious about the environmental obligation and it is continuously working on improvement of the landscape of the quarry sites. EXPANSION OF CAPACITY Your Company has completed its expansion though unduly delayed and now the capacity stands at 1,64,000 Sqmt of building Slabs, Monuments, Vanity Tops. The erection of major cutting and finishing machines have been completed. With the expansion now the increase in sales and profit will be evident in the coming years. The expansion taken up in the beginning of January, 1995 got delayed due to undue delay in receipt of capital goods from Italy and very late receipt of allotment money from the Public and Rights Issue last year. The Working Capital has remained a matter of concern due to extremely strict credit regulations prevailing in the Country and now the Banks are working towards positive direction for enhancement of Working Capital limits for the enhanced capacity of the Company to meet its export obligations as the Company holds sufficient orders for next one year. CONSERVATION OF ENERGY Your Company has installed very high efficiency and hightech energy distribution system backed up by top quality maintenance of its entire power distribution system and water distribution system which has resulted into continuous saving of power and water. Regular quality circle meetings have included strong awareness of quality and sensitivity towards energy saving habits upto the grass root level of the Company. DEPOSITS The Company has not accepted any deposits from the Public during this year. INSURANCE All the assets of the Company including the building, plant and machinery, stores and stocks have been adequately insured. LABOUR RELATIONS During the year under review the Employer-Employees relations have been harmonious and cordial. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Kishan Lal Jaswal and Shri Sant Sagar Jain will retire by rotation and being eligible offer themselves for re-appointment. AUDITORS The term of M/S G.Seshadri & Co., Chartered Accountants, Hyderabad as auditors of the Company expire at the conclusion of this Annual General Meeting and they are eligible for re-appointment. The auditors have given a certificate to the effect that the re- appointment, if made, will be within the prescribed limits specified under Section 224(1)(b) of the Companies Act, 1956. PARTICULARS OF EMPLOYEES Information in accordance with Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 forming part of Directors Report is given in Annexure - A. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information in accordance with the provisions of Section 217 (1) (C) of the Companies Act, 1956 read with Companies ( Disclosure of particulars in the Report of Board of Directors ) Rules, 1988 is given in Annexure - B. ACKNOWLEDGEMENTS Your Directors are pleased to place on record their sincere gratitude for the timely assistance, support, co-operation and guidance rendered by Financial Institutions, its Bankers, Central and State Government Authorities, Customers & Suppliers. Your Directors further wish to place on record their appreciation of the services rendered by all employees of the Company. For and on Behalf of the Board of Directors OM PRAKASH JASWAL CHAIRMAN Place : Hyderabad Dated : 30th November, 1996.