Annual Report 1998-99 Shruti Synthetics imited DIRECTORS' REPORT TO THE MEMBERS, Directors of your Company have pleasure in presenting the 19th Annual Report together with Audited Statement of Accounts for the year ended 31st March, 1999. OPERATIONS: The over-all performance of the Company during the review period has been adversely affected due to overall recession in the textile industry and shrinkage of demand in domestic as well as overseas market. The Company has also faced workers strike for about 93 days, during this period. In-spite of the workers strike, the Company has produced 4319.66 M.T. yarn as against 4522.16 M.T. produced in the previous year. The over-all sales remained at Rs. 5358.01 Lacs as against previous year sales of Rs.6973.39 Lacs. The profit margins have also been converted into losses due to the reasons stated above. The Company's export performance has remained satisfactory. In spite of all odds, it has achieved export turnover of Rs.1893.05 Lacs. Which is marginally lower by 1.28 % as compared to the previous year. The Company has diversified its export to the European countries also. Your Company has been honored with the Export Excellence Award by the Government of India for its tremendous export performance during the year 1997-98. The productivity, efficiency and capacity utilisation have increased after the workers strike. The total workers requirement per day has gone down from 1350 workers for 12.5 M.T production to about 1050 workers for 17.5 M.T. production The term lending financial institution1s have approved the deferment of term loan repayment liabilities and have also funded the interest due upto 31st March, 1999. In view of the losses during the period under review, your directors are unable to recommend dividend on the equity shares. MODERNISATION PROGRAMME Your directors1 have, time and again initiated several steps to modernise the existing manufacturing facilities by adding six two for one twisters (TFO's) to replace the ordinary winding and doubling machines, four Carding machines and one D.G. set of 1250 KVA capacity. The modernisation shall help the company in a long way to produce better quality yarn both for the domestic as well as international markets. DIRECTORS Sh. J. P. Agarwal retires by rotation and being eligible. offer himself for re-election. During the period, Sh. R. P. Agarwal has passed away. We pray to the god for peace to the departed soul. Sh. G. L. Agarwal and Sh. R. P. Soni have also resigned from the Board. Sh. K C. Sodani was appointed as additional director during the year to hold the office as such till the conclusion of the next annual general meeting . The Board places on record their sincere appreciation for the services rendered by them AUDITORS M/s. A. Bafna & Company, Chartered Accountants, Jaipur will hold office till the conclusion of the fortheoming Annual General Meeting and being eligible offer themselves for re-appointment. The observations in the Auditors Report are dealt with in the notes to the accounts at appropriate Places and are self explanatory. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO As required by the Companies (disclosure of particulars in the report of Board of Directors), Rules, 1988, the relevant data pertaining to Conservation of Energy, Technology Absorption are given in Annexure to this report. The total exports on FOB basis were Rs.1649.57 Lacs as against imports on CIF basis of Rs. 180.34 Lacs. INDUSTRIAL RELATIONS The Company has faced workers strike of about 93 days during the year. Excepting this. the industrial relations, by and large, remained cordial throughout the year. As required under provisions of Section 217(2A) of Companies Act,1956, read with Company (Particulars of Employees) Rules,1975 as amended, none of the employee was in receipt of remuneration in aggregate, more than Rs. 6,00,000/- Per annum or Rs. 50,000/- Per month during the year INFORMATION TECHNOLOGY During the year your Company has taken effective steps to overcome the Y2K problem. The estimated expenditure on solving this problem is Rs. 1.50 ACKNOWLEDGEMENT The Board records its grateful appreciation for cooperation and valuable guidance extended to the Company by Central & State Governments, Financial Institutions, Banks, valued customers and suppliers. Your Directors also wish to place on record its appreciation for the dedicated services of employees. On Behalf of the Board of Directors Place: Udaipur (B.R. AGARWAL) Date : 04.12.1999 Chairman & Managing Director