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. () - Director Report

Company director report

1996 S&S INDUSTRIES AND ENTERPRISES LIMITED DIRECTOR'S REPORT Your Directors have great pleasure in presenting the FIFTH ANNUAL REPORT of your Company and the Audited Statement of Accounts for the year ended 31st March 1996. 1. DIVIDEND Your Directors are pleased to recommend for your consideration, payment of DIVIDEND @ 16% on 1,27,67,020 Equity Shares of Rs. 10/- each. Your Directors have been constrained to maintain the Dividend at the same level as that of the previous year as a measure of prudence and in order to conserve the resources for the future. 2. INCOME TAX PROVISION Your Directors have been advised that no tax liability would devolve on your Company during the year under review, in view of the various tax reliefs available under the Income Tax Act, 1961 and the Rules framed thereunder from time to time. 3. EXPORT HOUSE Your Directors are pleased to inform that your Company has attained during the year under review the coveted status of an EXPORT HOUSE, effective from 1st April 1995. This recognition is sure to enhance the image of your Company in the International market, besides entitling it to special concessions and benefits provided by the Government of India. 4. OPERATIONS During the year under review, your Company achieved a Total turnover of Rs87.01 Crores (including sales during trial operations) as against Rs.63.56 crores in 1994-95 recording an increase of 37% over the previous year. Profit after tax at Rs.6.21 crores during the year compared to Rs.4.86 crores in 1994-95 also showed a significant increase. Exports Sales in the AQUA-TECH DIVISION rose to Rs.19.11 crores from Rs.11.03 crores in the previous year. This increase of nearly 73%, deserves to be recognised as a creditable achievement particularly considering the extremely difficult situation that prevailed in the Aquaculture Industry arising out of the Supreme Court's Interim Order on the operations of Aquaculture Units coupled with the social problems and the wide-spread disease attack throughout the coast line of India. However, with prudent and scientific Management, your Company was able to sustain its Export activities and your Companys cultured Shrimps continue to be well received in the Overseas Markets particularly in Japan, Middle East, Europe and USA. The operations of your Company's AQUA CONSULTANCY DIVISION were at a IGW key during the year as new Aquaculture Projects could not be taken up due to the Supreme Court Order referred to above. Your Directors hope that the position would improve soon. In the AGRO-TECH DIVISION, the Refinery Plant witnessed a remarkable growth during the year in terms of production and sales. With enhanced Capacity Utilisation, 14188 MT of high quality Edible Oils were produced during the year generating a turnover of Rs. 60.35 Crores compared to Rs. 48.79 Crores achieved in 1994 - 95. VENDEE - the unique Automatic Edible Oil Vending Machine introduced by your Company is now a household name in India and attained geographical expansion of its coverage with 250 outlets in operation serving the consumers at large. During the year under review, your Company has also introduced new generation Vending Machines offering a wider choice for the consumers. During the year under review, your Company successfully commissioned the most modem 200 TPD Seed Processing- cum-Solvent Extraction Plant with effect from 1st March 1996 to ensure continuous supply of quality Crude Oil to the Refinery. The operations of this new Seed Processing Plant have now been stablised during the Current year. The Agricultural Extension Services programme for Oil Seed cultivation and development which acts as a Catalyst for the performance of the AGRO TECH Division has been further strengthened during the year under review and more areas are being brought under Oil Seed cultivation in the current year. The ENVIRO-TECH DIVISION performed reasonably during the year with increase in turnover from Rs.0.58 Crores to Rs.0.90 Crores by the sale of Water related consumer durables and Project executions. Your Directors are hopeful that the performance of this Division will further improve in the years to come. Your Directors are pleased to report that during the year under review, the new MINERAL WATER Plants at Mumbai and Hyderabad commenced operations, and these two, together with the Plant at Arcot commissioned during the previous year generated a turnover of Rs.1.26 Crores. Encouraged by the customer acceptance and overwhelming support, your Company is taking all steps to popularise its A4UA COOL brand of Mineral Water to capture a sizeable market share in the coming years. Your Company during the year under review, pioneered the concept of Automatic Vending of Mineral Water with the introduction of Water Vendee. Your Company has already installed 12 WATER VENDEE Outlets in the city of Madras through a Franchisee network generating a turnover of Rs. 2.49 Crores during the year under review. Your Company is planning to extend the coverage of WATER VENDEE in the current year to other major centres in Southern India. 4. FUTURE PROSPECTS Sensing that the International demand for the cultured Shrimps is ever increasing, your Company has already taken up the Project for the expansion of Water Spread Area of the Shrimp Farm. Work on this Project, though delayed due to legal issues, is nearing completion and is expected to go into commercial operations during 1997. Your Company has been allotted a command area of nearly 25000 Ha. by the Governments of Karnataka, Andhra Pradesh and Tamil Nadu for the Cultivation of Oil Palm. During the current year, your Company has already started importing Oil Palm sprouts and has commenced Nursery operations also. Your Company is sure to play a significant role in the field of Oil Palm cultivation and manufacture of Palm Oil and other down stream products in India leading to import substitution and possible reduction in the prices of Edible Oils. Your Company is constantly evaluating proposals for expansion and diversification of its activities with several Project Proposals currently under study and Proposals would be brought before the Members for approval, once the details are finalised. Simulataneouly several steps have been initiated to prepare your Company for taking on the challenges of the future in an environment of rapid growth. The services of two reputed Companies in the field of Information Technology have been commissioned to develop and implement an integrated IT solution covering the entire operations of the Company. HRD activities within the Company have also been strengthened with specific emphasis on Training and Development to prepare the Company's personnel for the future. 5. FIXED DEPOSITS Your Company had one unclaimed Deposit amounting to Rs.15,000/- as at 31.03.1996. 6. SUBSIDIARY COMPANY M/s. S&S Finance And Investments Limited became a fully owned Subsidiary of your Company with effect from 2nd February 1996 and a Statement pursuant to Section 212 of the Companies Act, 1956 together with the Audited Accounts of the Subsidiary Company are attached hereto. 7. DIRECTORS During the year under review, Mr V S Rao has been appointed as a Director of the Company effective from 28th November, 1995 as a Nominee of Industrial Development Bank of India and he shall be a Non-retiring Non rotational Director. Messrs V. Karthikeyan, T.K. Srinivasan and N.B.Danuvala, Directors of your Company retire by rotation and are eligible for reappointment. Necessary Resolutions have been set out in the Notice convening the Annual General Meeting for consideration and approval by the Members. Mr. A.R. Santhanaknshnan was appointed as Managing Director of the Company for a period of five years with effect from 18th October 1996 and the remuneration and the perquisites payable to him were approved by the Members at the General Meetings held on 23rd October 1991 and 1st November 1994. Since the present term of his Office as Managing Director expires on 17th October 1996, the Board of Directors have reappointed Mr. A.R. Santhanakrishnan for a further period of five years on the increased remuneration in line with increased responsibilities. Since the payment of increased remuneration to the Managing Director requires the approval of the Members, necessary Resolutions have been set out in the Notice convening the Annual General Meeting for consideration and approval. 8. BORROWINGS Considering the current level of growth achieved by your Company, projected increase in the activities and the setting up of various Expansion/Divisification activities on the anvil, it is proposed to increase the borrowing powers of the Board of Directors of the Company from the present limit of Rs.25.00 Crores to Rs.50.00 Crores over and above the paid up capital and free reserves of the Company. Consequent to the increase in the borrowing powers and raising of loans to meet the requirements, the Board of Directors need to be further authorised and empowered to create charges/mortgages in favour of the Lenders. Both the increase of Borrowing powers, and the creation of charges/mortgages require the prior approval of the Members pursuant to Section 293 (1) (d) and 293 (1) (a) respectively of the Companies Act, 1956 and necessary Resolutions have been set out in the Notice for consideration and approval. 9. AUDITORS The Auditors of the Company M/s.R.Subramanian & Co. Chartered Accountants, Madras, retire and are eligible for reappointment. You are requested to appoint Auditors for the current year. 10. EMPLOYEES Information required under Section 217 (2A) of the Companies Act, 1956 read with the rules framed thereunder is furnished in the annexed Statement 1. 11. DISCLOSURE WITH RESPECT TO CONSERVATION OF ENERGY ETC. The particulars with respect to conservation of Energy etc. pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors)Rules, 1988 are set out in the annexed Statement ll hereto and forms part of this Report. 12. INDUSTRIAL RELATIONS The Industrial Relations during the year under review in all the Divisions were cordial. 13. ACKNOWLEDGMENT Your Directors wish to place on record their appreciation of the whole- hearted support and co-operation received from the various Departments of the Central and State Governments, the Company's Bankers viz., State Bank of India, Oriental Bank of Commerce, Indian Bank and The Vysya Bank Limited, Industrial Development Bank of India, Unit Trust of India, LIC Mutual Fund, GIC Mutual Fund, other Foreign and Indian Institutional Investors. Your Directors wish to thank the Shareholders, Customers, Dealers and Vendors of the Company for their continued support and confidence. Your Directors also wish to place on record their special appreciation of the efforts of the employees at all levels. ANNEXURE TO THE DIRECTOR'S REPORT INFORMATION PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES 1988 A) CONSERVATION OF ENERGY a) Most of your Company's operations are not power-intensive. However, your Company continues to put in sustained efforts to improve Energy generation and utilisation, by closely monitoring the production processes and by carrying out preventive maintenance of transformers and generators periodically. Appropriate further investments would be made as and when the necessity arises. b) Based on the experience gained, plans are already under implementation for reduction of Consumption and for Conservation of Energy. Energy Audits have been taken up in all the Divisions and the recommendations will be implemented in the current year. c) With the implementation of the proposals now under valuation,. energy consumption is likely to reduce significantly in stages resulting in reduction in cost of production of Edible Oils and Extraction of Raw Oil. d) Power consumption and other related details in respect of the Edible Oil Refinery and Solvent Extraction Plant are furnished in the prescribed Form A annexed hereunder. FORM A Particulars relating to Conservation of Energy in respect of Refining of Edible Oils and Extraction of Raw Oil. A. POWER & FUEL CONSUMPTION Current Year Previous Year 1. Electricity a) Purchased Units 14,03,828 13,74,510 Total Amount (Rs. in Lacs) i) Demand Charges 4.75 4.55 ii) Amount for units consumed 33.41 19.94 Total 38.16 24.49 Rate per Unit 2.72 1.78 b) Own generation i) Through diesel generator Units 1,63,432 81,760 Litres of diesel oil 49,005 26,655 Units Per litre of Diesel Oil 7.72 3.07 Cost of diesel (Rs. in Lacs) 4.62 2.12 Cost per unit 2.83 2.59 2. Husk (Specify Quantity & where used) i) Husk in the boiler for steam generation: Quantity (M.T.) 4,688 4,701 Total Cost (Rs. in lacs) 6.44 6.75 Average Rate 3. Other/internal generation Thermic fluid and Hexane as medium and diesel for generation of heat energy i. Thermic Fluid 81,975 84,926 Quantity (Ltrs.) 6.44 6.75 Total Cost (Rs. in Lacs) 7.85 7.95 ii. Hexane Quantity 15,951 Nil Total Cost (Rs. in Lacs) 2.00 Nil Average Rate 12.55 Nil B. CONSUMPTION PER UNIT OF PRODUCTION Unit (in M.T.) (in M.T.) Products Edible Oils Production (M.T.) 61,210 12,278 Electricity (units) 96.68 118.60 Husk (M.T.) 0.29 0.30 FORM B 1. Specific areas in which R & D was carried out by the Company: The following R & D work is being carried out in the various Divisions of the Company. - Augumentation of Shrimp production by Disease prevention - Microbiological studies on Soil and Water - Bacterial control using natural herbal microbial products - Indigenisation of Feed - Differential Stocking Density and analysis of growth pattern. AGRO-TECH DIVISION - Performance of Hybrid Oil Seeds in Rainfed / Irrigated land as a separate inter crop. ENVIRO-TECH DIVISION - Development of low cost alternatives for water treatment particularly for conversion of saline water into drinking after. 2. Benefits derived In the Aqua-tech Division, the R & D effort is expected to help detect in advance disease problems which are likely to be encountered and assist the growth of species, improve natural food production & contain the Feed Conversion Ratio for optimising the Farm Productivity. In the other Divisions, the benefits of R & D efforts are expected to accrue to the Company in the coming years. 3. Future plans of action: Your Company plans to strengthen the R & D work with a view to progressively improve the operations and achieve higher productivity at reduced cost. 4. Expenditure on R & D The expenditure incurred on R & D has been charged under the respective revenue heads in the Profit & Loss Account and are not separately grouped. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION 1. Efforts, in brief, made towards technology absorption, adaptation and innovation: The technology input received from the overseas Company for the Shrimp Hatchery Project has been fully absorbed and adapted to suit Indian conditions. 2. Benefits derived as a result of the above: The benefits have already started accruing in the form of enhanced production and productivity levels. 3. In case of imported technology, (Imported during the last 5 years reckoned from the beginning of the financial year) the following information may be furnished: The Company has not entered into any long term technical collaboration. However, it had technical services / consultancy agreements as per details below: 1. Name of the exporter M/s. HANAQUA INTERNATIONAL CORPORATION, M/s. SYSTEMS AQUACULTURE TAIWAN MANAGEMENT INC., PHILIPPINES. 2. Details of technology imported Supply of technical know-how/ consultancy Supply of technical know-how/ for the Shrimp Farm. consultancy for the Shrimp Hatchery. 3. Year of import 1991 - 92 1992 - 94. 4. Has the technology been fully absorbed Yes. Yes 5. If not fully absorbed, areas where this has not taken place and reasons thereof. Not applicable. Not applicable. C) FOREIGN EXCHANGE EARNINGS AND OUTGO 1. Your Company during the year under review exported Shrimps to Europe, USA, Middle East and South East Asian countries. The value of Exports increased from Rs.1219.13 lakhs during the previous year to Rs. 1910.64 lakhs during the year under review. Efforts are being made to diversify into Export of Agro products, Mineral Water and Spring Water and also gain entry into several other new markets. 2. Your Company, during the year under review, earned Rs.1910.64 lacs and expended Rs. 32.05 lacs in Foreign Exchange. (on behalf of the Board) A.R.RAJAGOPALAN Chairman Place : Madras Dated : 10th July, 1996.