SPARR EQUIPMENMTS LIMITED
REPORT OF THE DIRECTORS
The Direetors submit their Annual Report on the business and the operations
of the Company and the financial accounts for the year ending 31st Mareh,
Directors regret to report, in spite of efforts, the company's perofrmance
could not be maintained. The Company is plided into a heavy loss. It is
mainly due to complete collapse of Blast Hole Drills business, for which
substantial infra-structure and expenditure has been built in and also due to
plans of diversification i.e. manufacturing of Earth Moving Equpment and
Industrial Compressors could not take up due to slow down of project.
Even normal business like Water Wll Business has come down due to severe
working capital crunch, Letter of Credit, Suppliers Credit, etc.
The company in Water Well Rigs and Water Well Compressors business also
affected even though they have prominent business in the market because of
inability to cater to the market delivery reguirement due to again severe
working capital crunch.
The company had executed Export orders to the tune of Rs. 70 lakhs in the
year 1993-94 and the company is expected large volumes of business from this
sector. Unfortullately, company is not able to get preshipment of credit to
export due to irregularity in the Cash Credit Account.
Due to substantial erosion of network, Directors have no option but to report
to Board For The Industrial Financial Reconstruction as a potentially sick
unit under the the Sick Industrial Companies (Special Brovisiol1s) Act, 1985.
But only way to turn around from this loss makillg operation is by way of
We have tried to cut dowll over head expenses, man power expenses to a
maximum extent. We have to go for drastic restructuring operation to tune the
company. Company is exploring vigorously with all ways and means from
infusioll of furtl1er funds. For this, unallinlously hope from somethi
Ositive to report to the share holders enormously all the efforts
There has bcen a gradual loss of business with Coal India Ltd. which we
wanted to avert by various means. But due to thcir problems, Coal India could
neither sustain thcir purchases nor give adequate a timely payment for the
purchasec We measured to diversify to off set huge rccurring loss incurrcd in
the Coal India could not back rout since the development of other items could
not take place in time to compensate the loss.
Section 217(1?(e) of the Companies Act, 1956 Partic
In accordance with the provisions of Section 217(1)(e) of the Companies Act,
1956, the requircd information rclating to R & D, tcchnology absorption and
Foreign Exchange earnings and outgo is annexed and should bc treated as part
of this report. Form A requiring disclosure of particulars with regard to
Conservation of encrgy is not applicable to our Company.
ANNEXURE TO nIRECI ORS' REPORT
Particulars as required undcr Companies (IDisclosurc of Rarticulars in thc
Rcport of Board of Directors) Rules, 1988 and forming of Directors' Rcport
for the ycar cndcd 31st March, 1994.
1. Research & Development (R & D)
i) Speeifie areas in whieh R & D earried out by the Company.
Company's R & D effort has rcsultcd in solving the basie assemitrics two
Comprcssors design. With thc result, Company is able to make a optimum small
industrial sercw which is alrcady launchcd for eommcreial production but also
cnormously improvcd thc designs of screws for largcr eomprcssors. The
eompany's R&D in Watcr Wcll has rcsulted in deecp pcnctration in Watcr Well
Drilling Rig mountcd on light eommcrcial wcight which has got a future market
2. Foreign Exchange Used & Earned (Rs in Lakhs)
a) Foreign Exchange Uscd - 2.52
b) Forcign Exchangc Ean1cd - 64.01
for and on behalf of the
Board of Direetors
Date: 22nd July, 1994