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Serene Industries Ltd.

BSE: 524067 Sector: Industrials
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Serene Industries Ltd. (SERENDYSTF) - Director Report

Company director report

SERENE INDUSTRIES LIMITED DIRECTORS' REPORT TO, The Members, Yours Directors present their Report for the six month period ended on 30th June, 1998. OPERATIONS In the light of the continuing liquidity problems, no Improvement could be effected in the operations. The Company continued its operations at a low level at its Lote parshuram unit, while Vapi Unit No. 2 is closed. Vapi unit No. 3 is taken over by G.I.I.C. under section 29. This is due to Gujarat Pollution Control Board s restrictions imposed at Vapi and Financial constraints faced by the Company. The Company could achieve a very low sale volume of Rs. 7.11 crores for the six month period ended 30th June, 1998., as against Rs. 60.23 crores for the eighteen month period ended 31 st December, 1997. The Company incurred loss to the tune of Rs. 103.29 crores, mainly on account of interest costs, non-realisable/recoverable inventories and receivables, prior year adjustments of interest and depreciation and extraordinary items etc. Thus, the Company eroded its net-worth completely, with the accumulated losses at Rs. 111.60 Crores, as at the end of June, 1998. Your Directors fully share your anxiety on the present state of affairs of the Company and the severe problems that confronted the Company and its operations during the past two years period ended on 30th June, 1998. DIVIDEND Your Directors regret their inability to declare any dividend for the period ended 30th June, as the financial results do not permit the same. AUDITORS M/s. Bharat Shroff & Co., Chartered Accountants, our present Auditors shall cease to be Auditors from the conclusion of this Meeting. They have pursuant to Section 224 (1) of the Companies Act. 1956 furnished a Certificate regarding their eligibility for re-appointment as the Company's Auditors. You are requested to appoint them as our Auditors for the current year and fix their remuneration. AUDITORS' REPORT Auditors Report to the Accounts have been considered by the Board and clarified, wherever necessary, In the schedule 15: Notes on Accounts. PERSONNEL During the period under review, the relationship between the Management and employees was cordial. The particulars of employees to be furnished as required under Section 217 (2A) of the Companies Act,1956, are enclosed. STATUTORY INFORMATION Information on the conservation of energy, technology absorption, foreign exchange earnings and out-go required to be disclosed under the provisions of Section 217 (1) (e) of the Companies Act, 1956 are enclosed. COST AUDIT The Central Government has prescribed Cost Audit for the Company under Section 233 (B) of the Companies Act, 1956. The cost audit is completed for the period ended 30th June, 1996. FOREIGN EXCHANGE EARNINGS AND OUT-GO The relevant figures relating to the foreign exchange used and earned are given in the statement of additional information appended to the accounts. SUBSIDIARY COMPANY As required by the provisions of Section 212(1) of the Companies Act, 1956 documents of its Subsidiary Company, M/s. Seribright Colours Ltd., U.K. are annexed to the Balance Sheet. DIRECTORS Mr. Samir D. Sarvaiya retires by rotation and being eligible offers himself for reappointment. REPORT TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION PURSUANT TO SECTION 15 OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 The Management in the process of giving quarterly/half yearly results for the period ended 30th June, 1998 to the Stock Exchanges, realised that the Company has suffered heavy losses and its net worth stands eroded based on the figures given hereunder. (Rs. In Lacs) Paid Up Capital . 2680.75 Promoters advance 170.00 Reserves & Surplus 3437.20 Net Worth 6287.95 Accumulated loss 11160.00 Hence to comply with the requirements of the provisions of the Sick Industrial Companies (Special Provisions) Act,1985 at the earliest it was decided to close the accounting Period of the Company at 30th June,1998. The Company is in the process of filing an application to the BIFR. ACKNOWLEDGMENTS Your Directors wish to place on record their appreciation for the co- operation received by the Company from various Departments of the Central and State Governments, Company s Bankers and Financial Institutions and all employees of the company for their services and untiring continued support during the period under review. Your Directors also express their gratitude to the Shareholders of the Company for the confidence reposed in the Management. For and On Behalf of the Board Mumbai RAJESH J. SARVAIYA Dated: 24th September, 1998. Chairman & Managing Director Annexure to the Directors' Report . Information as per section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the period ended 30th June, 1998. A) CONSERVATION OF ENERGY . The Company continues to lay emphasis on conservation of energy. Plant level committees have been set up for monitoring of consumption, maintaining systems etc. is being adhered to: B) TECHNOLOGY ABSORPTION 1. Research & Development The management is pleased to inform that the Company has set-up a full fledged Research 8 Development facility .at its unit at Lote Parshuram, Maharashtra. It is also in the process of establishing similar facility at its other unit at Vapi. The emphasis on R.& D. is on:- a) Technological Improvements b) Process equipment modernisation c) Cost reduction procedures d) Optimisation of the reaction conditions to result higher output e) Optimisation of batch process to reduce fixed cost and improve productivity f) Introduction of new products to replace existing outdated products g) Introduction of high value products to yield higher margin of profit The Company s main objective in the future is to continue its Research & Development work on innovation and to bring out new breed of dyes to help the process industry,v to reduce their operational cost and make them eco friendly. 2. Technology Absorption - The Company has indigenous knowhow and therefore this clause does not apply. C) FOREIGN EXCHANGE EARNINGS/OUTGO: The Company s foreign exchange earnings on account of exports (FOB Value) is Rs. 57.50 lacs (Previous period Rs. 654.55 lacs). The Company has imported certain raw materials and has spent foreign exchange on the visits abroad of its Directors and employees in Connection with the development. of the Company's export market. The details of the expenses are as given below: (Rs. In lacs) 1) Raw materials imported (CIF value) 12.50 (346.62) 2) Expenditure on Travelling/Others ---- (11.82) For and On Behalf of the Board Mumbai RAJESH J. SARVAIYA Dated: 24th September, 1998. Chairman & Managing Director