SARASH INDIA MINES AND MARINES LIMITED DIRECTORS' REPORT To the Members, Heartiest Welcome to the members. Your Directors have great pleasure in placing before you the Third Annual Report of the Company for the year ended 31st March 1998. The working results of the company are summarised below, giving the financial highlights for the last two financial years. REVIEW OF OPERATIONS: During the year the company has maintained the gross income inspite of the recessionary trends through out the globe and specially in its area of operations namely Japan, Taiwan and East Asian Markets. During the current year (1998-99), we have planned to enter the European market in a big way which is expected to improve the gross income considerably. FIXED DEPOSIT: All the deposits matured during the year were either repaid and the Company has no fixed deposits which are matured and unpaid. Conservation of Energy a. Conservation of Energy Optimisation of achieving available energy through strict control and monitoring and restricted use. As a result substantial saving inn energy has been achieved. However, no additional investments have been made in this regard. b. Technology absorption Not applicable since the company has adopted the latest state of the art plant and machinery and these machinery are currently available all over the world. However, no further Technology absorption is necessary for the time being. c. Foreign Exchange earnings and outgo 1. Your company being a 100% export unit, the production has been exported to highly quality conscious countries such as Taiwan, Japan, Malaysia, Singapore. Your company is also exploring new markets for its products in developed countries like Germany, France and other European countries. 2. The total foreign exchange earned and used: Earnings in foreign currency Rs. 422.87 Lakhs Outgo in foreign currency Rs. 2.86 Lakhs DIRECTORS: At the forthcoming Annual General Meeting Mr. C.K. Chandrasekar and Mr. Sridhar retire in accordance with the Articles of Association of the Company and being eligible, offer themselves for re-election. CASH FLOW STATEMENT: Cash Flow Statements for the period 1997-98 is enclosed elsewhere in this report. AUDITORS: M/s. MAHADEV & CO., Chartered Accountants, Chennai retire from the office of Auditors and are eligible for re-appointment as Auditors of the Company till the conclusion of the next Annual General Meeting. ACKNOWLEDGEMENTS Your Director's take this opportunity to Thank the Companies Shareholders, employees, bank, companies, customers, suppliers and all other associated for their continued support and assistance at all levels. For and on behalf of the Board Place : Chennai R. RAVENDRAN Date : 29-06-1998 Managing Director