MONTARI INDUSTRIES LIMITED
Your Directors have pleasure in presenting the Fifteenth Annual Report of
your Company together with Audited Accounts for the year ended 30th
During the year under review certain steps were taken to improve
performance of your Company including cost cutting, such as closure of
unviable branches and export office at Mumbai, curtailing of manpower and
re-location of Kisan formulation unit from Chandigarh to Toansa where the
technical manufacturing Plant is located.
The Company introduced a new insecticide-"Lethal Super" mainly used for the
cotton crop and also re-introduced scabicide. Innovative sales scheme were
also introduced for the first time for farmers for Milron a major product.
These innovative schemes yielded good results.
However, the operations of the Company were hampered because of a ban on
the use of plant growth regulators and also for a certain time on
combination products. Adverse market conditions both in the domestic and
international markets also had an impact. Inspite of this your Company has
been able to achieve a marginal positive profit before the depreciation,
interest and tax.
As informed in the previous report your Company had submitted a draft
rehabilitation scheme/package to Industrial Development Bank of India
(IDBI), the operating agency appointed by the Board for Industrial &
Financial Reconstruction (BIFR) in terms of Section 17(3) of Sick
Industrial Companies (Special Provisions) Act, 1985 (SICA) .
IDBI had after examining the viability of your plant, and after conducting
such other checks as advised by BIFR, called meetings of all the secured
creditors/lenders, financial institutions and banks. It is pertinent to
report that all the secured lenders agreed to support the rehabilitation
IDBI has since submitted the draft Rehabilitation Scheme to BIFR and the
BIFR is in processing the matter further to take decision on the same.
As soon as the rehabilitation scheme is approved by BIFR, the Company would
forthwith proceed for implementation of the same. During the interim period
Company's lead Bank has been extending its support which helped the Company
to improve its performance.
Your Company could meet the challenges of the year under review because of
the hard work, commitment and dedication of all within the organisation and
unstinted supports from its customers, bankers, financial institutions and
business associates. The functional teams are continuously working as a
core team towards further improvements to meet future objectives of the
It is mentioned for your information that during the year under review, one
unsecured creditor had appealed to the Appellate Authority for Industrial
and Financial Reconstruction (AAIFR), against the BIFR decision of 22.7.97
declaring the company as Sick Industrial Undertaking under Section 3(1)(o)
of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) which
appeal is still pending.
Research & Development
R & D continues to be a key focus area for the Company. Besides
continuously working on improvements on the current products, the R & D is
constantly busy with developing of new products which involve very
The Company is also in dialogue with some international companies of repute
to enter into a strategic alliance for certain technical inputs of new
The introduction of these products would certainly have a significant
positive impact on the sales and profitability of your Company.
During the year under report, deposits for Rs. 54.81 lacs matured for
repayment out of which Rs.2.60 lacs could only be repaid and remaining
deposits of Rs.52.21 lacs are outstanding due to continued financial
stringencies. Deposits aggregating to Rs.2.65 lacs belonging to 22
depositors remained unclaimed. The Company is however endeavoring to repay
the pending deposits at the earliest possible. For this reason in the
rehabilitation package, Company has recommended priority for these
As required under Section 212 of the Companies Act, 1956, the audited
statement of accounts alongwith reports of the Board of Directors and the
Auditor's reports in respect of the subsidiaries is annexed and forms an
integral part of this report.
Disclosure of Particulars
As required by the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules 1988, the relevant information and data is given
in the Annexure to this Report.
9700 equity shares out of forfeited shares were issued at unpaid value of
Rs. 5 per share and as a consequence, the equity share capital has been
increased by Rs.0.97 lac.
Extension in Redemption period of 90,000 14% Preferences Shares of Rs. 100
each, 3,80,140 15% Non-Convertible Debentures of Rs. 100 each and 28,98,057
15% Non Convertible Debentures of Rs. 50 each.
IDBI, the Operating Agency in its draft rehabilitation scheme forwarded to
BIFR for its approval has not provided for any redemption of Preference
Shares during the period of scheme. In view of this it is proposed to
redeem the Preference Shares in the years 2006-2007 when the accumulated
losses would be wiped off, subject to the approval of the holders.
IDBI has further recommended re-schedulement in the redemption period of
3,80,140 - 15% Secured Debentures of Rs.100 each to be repaid in the years
1999-2000 without any overdue interest.
IDBI has also recommended redemption period of 28,98,057 - 15% Secured Non-
Convertible Debentures of Rs. 50 each be extended and the said debentures
be redeemed in three annual installments starting from 2000-01 to 2002-03
at the document rate of interest.
IDBI has further recommended deferment of 50% of the simple interest
outstanding as on 31.12.1997, to be paid in three years starting from 1999-
2000 @ 15.5% p.a., and waiver of balance 50% simple interest alongwith and
entire compound interest and penal charges as on 31.12.97 on these
Additional Information - Balance Sheet Abstract and Company's General
Information pursuant to Department of Company Affairs' Notification dated
15th May,1995, relating to Abstract of Balance Sheet and Company's General
Business Profile, is given in the Report for your information.
Shri Malkiat Singh and Shri M.P.Setia were nominated as Directors of your
Company by Punjab State Industrial Development Corporation Ltd. (PSIDC) and
Unit Trust of India, (UTI) respectively.
Shri Ashok Mehra, Joint Managing Director vacated his office as such but
was requested to be Group Chief Executive of your Company. Your directors
placed on record their appreciation for the valuable services rendered by
Shri Mehra during his tenure as J.M.D. Considering Mr. Mehra's contribution
in revival of the Company, your Board extended invitation to him to
continue attending Company's Board Meetings.
M/s. Walker, Chandiok & Co., the present Auditors have furnished a
certificate regarding their eligibility for re-appointment as Company's
Auditors, pursuant to Section 224 (1-B) of the Companies Act, 1956.
Particulars of Employees
Information as per Section 217 (2-A) of Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 as amended, forms part of
this report. However, as per the provisions of Section 219(1)(b)(iv) of
Companies Act, 1956, the Report and Accounts are being sent to all
shareholders of the Company excluding the statement of particulars of
employees. However any shareholder desirous of obtaining a copy thereof
should write to the Company.
The notes forming part of the Accounts, being self explanatory, the
comments made by the Auditors in their report, are not being dealt with
Your Directors express their appreciation for the valuable continued co-
operation and unstinted support extended by Financial Institutions, Banks,
other lenders, domestic and foreign Associates, Suppliers, Distributors,
Stockists, Dealers and various Govt. agencies, at the time of need.
I also wish to place on record my appreciation for the wise counsel,
guidance and co-operation extended by my colleagues on the Board.
The Board expresses its appreciation and thanks to all officers and staff
at all levels for their dedicated hard work and energetic efforts for
revival of the company.
On behalf of the Board of Directors
New Delhi Dr. BHAI MOHAN SINGH
4th March, 1999 Chairman
ANNEXURE TO THE DIRECTORS' REPORT
I. CONSERVATION OF ENERGY
DISCLOSURES UNDER SECTION 217(1)(e)0F THE COMPANIES ACT,1956 READ WITH
COMPANIES(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)
a) Energy conservation measures taken:
i) Power consumption reduced in CPP Plant by
- replacing chilled brinc of - 25 degree centrigrade with that of - 12
- reduction in grinding mill operation time by more than 80%.
ii) Cooling water temperatures reduced by commissioning of 180 M3/Hr. third
bay and overhauling of existing 2 bay of cooling tower thereby improving
operation efficiencies of energy intensive refrigeration units and also
achieving better solvent recovery in the plant.
iii) Augmentation of IPU(T) milling capacity thereby reducing specific
energy consumption .
iv) Steam losses prevented by providing automatic temperature control valve
on steam line of hot water tank.
v) In house insulation audit carried out and corrective measures taken for
both hot and cold Insulation lines.
b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
i) Installation of unitwise energy meters to closely monitor the specific
energy consumption and take corrective actions wherever required.
ii) Working on the feasibility of using LDO instead of HSD in steam
iii) Improving boiler efficiencies by use of recommended additives both on
fuel and water side.
iv) Use of 2 air compressors of smaller HPs (20+10) to avoid usage of
single 60 HP compressor for most of the time.
v) On-going jobs on hot & cold insulation.
c) Impact of Implementation of above measures (a) and (b) for reduction of
energy consumption and consequent impact on cost of production of goods.
--Implementation of above proposals/measures shall reduce energy
consumption resulting in direct saving of fuel oil and electric power
II. TECHNOLOGY ABSORPTION
(A) Research and Development (R&D)
1. Specific areas in which R&D was carried out by the company.
-- Process development for newer products.
-- R&D support to manufacturing operations in the existing product range.
-- Import substitution and optimisation of parameters.
-- Testing of efficacy of new products and trouble shooting in the existing
2. Benefits derived as a result of above R&D
-- Improvement in efficiency, yield, purity and cost reduction.
-- Import substitution of pesticides, thereby improving self reliance in
-- Lab scale technology developed for certain new products Chlorpyriphos
- methyl and Deltamethrin.
3. Future Plan of Action
-- Development of technology for pesticides (technical) and intermediates
currently not manufactured by the Company.
4. Expenditure (Rs. in Lacs)
a) Capital 2.55 2.96
b) Recurring 70.17 60.46
c) Total 72.72 63.42
d) Total R&D expenditure as a
percentage of total turnover 1.38 0.98
B) Technology absorption, adaptation & innovation
1. Efforts in brief made towards technology absorption, adaptation and
-- Pilot plant trials completed for a new product Chlorpyriphos methyl and
found conforming to international specifications.
-- Process for manufacture of a new product by more cost effective and eco-
friendly technology with savings on utilities, manpower, machinery &
2. Benefits derived as a result of the above efforts e.g. product
improvement, cost reduction, product development, import substitution etc.
-- Manufactured international quality Chloropyriphos, Isoproturon and
Chlorpyriphos methyl. Chlorpyriphos and Isoproturon have been marketed
within the country and all three have been exported.
3. In case of imported technology (imported during the last 5 years
reckoned from the beginning of the financial year), following information
may be furnished.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO:
(Rs. in lacs)
(a) Earned 1713.86 1876.94
(b) Outgo 101.14 81.89