STAR VOLKMANN LIMITED
DIRECTORS' REPORT TO THE MEMBERS
Your Directors have pleasure in presenting their thirteenth Annual Report and
Accounts for the year ending 30th Seotember 1994.
The Company achieved a turnover of Rs. 117.00 million during the year as
against Rs. 103.09 million for the previous financial year of 18 months
ending 30th September 1993. The Company has made a profit of Rs. 4.99
million during the year which will be set-off against the carried forward
loss of the previous year and hence, the directors are not in a position to
recommend any dividend on the equity shares of the Company. During the year
under report, the Company has been able to develop new models of machines
using indigenously manufactured spindle bank aggregates manufactured by APS-
Star Industries Ltd., who are our associates and have the necessary expertise
in spindle manufacturing. The Company has been able to successfully
indigenise most of its components.
In view of the competition posed by the collaborators in the Indian market
and difficulties posed for exporting our machines, besides the severe
problems the Company faced as a result of undue delays in supply of
components and the higher pnces charged for them by the collaborators, your
Board decided that it would be expedient and in the best interests of the
Company to terminate all the collaboration and other arrangements with them.
Your Directors also noted that while, on the one hand, the Company's own
Research & Development had met with some phenomenal successes, on the other
hand, the supply of new technology from the collaborators was most
inadequate. The Company being fully confident of substantially improving both
the technology as well as the quality of machines, your Directors therefore
took the decision of terminating all technical and other collaboration
agreements through mutual consent with effect from 31st March 1994.It may be
appreciated that inspite of the obvious differences, your Directors were able
to settle the matters'amicably with the collaborators, and hope to maintain
normal commercial relations with them as required.
With the successful indigenisation of most of the components and with the
termination of collaboration arrangements with Volkmarln GmbH, and the
Company being now able to export freely, the Company is now developing new
models and upgrading substantially the technology of the existing models.
Particularly, the development of heavy duty models has been taken up with the
technical parameters, keeping the international market in view.
Arrangements have already been made with a well known German spindle
manufacturer for the supply of specific Two-for-One Twisting spindle
assemblies and their components. With the promotional work dotle by APS-Star
Industnes Ltd. in Europe and U.S.A., both with regard to the latest technological developments and assessment of market and customer needs, the
Company would be in a position to achieve higher price realisations for its
new designs and models, at the same time being competitive in the
international market and being in a position to supply the upper segment
technology machines suitable for the sophisticated Indian EOU market. The
first such TFOT for the sophisticated westem market is ready for export and
despatch in January 1995. It is the first machine manufactured by the Company
with a conveyor belt for automatic delivery of package, automatic air-jet
threading, with a wide width to accommodate heavier packages and the first of
such high technology and kind to be manufactured in India.
Several international companies including their Chairmen and high level
technologists have visited the Company's factory and development units and
after which only the first orders for such sophisticated machines have been
With the synergistic relations of the Company with APS-Star Industries Ltd.
and the German spindle manufacturers, the Company is now able to offer TFOT
machines catering to a wide market spectrum, ranging from economy models for
the cost-conscious customer to sophisticated models for the technology-
conscious premium-yarn manufacturers as also industrial and carpet-yarn
manufacturers. As a result of all the above favourable developments, your
directors expect a quantum jump in both turnover and profitability in the
current financial vear.
During the period under review, Mr Martin Boerger, Dr. Joseph Schiotter, Dr.
Paul B. Junk, representatives of the erstwhile collaborators, resigned from
the Board. The Board records its deep appreciation of the valuable services
rendered by them. During the year under report, the Company has co-opted Mr.
Saroj Poddar, Mr. H.S. Kulkarni, Mrs. Yuti S. Bhatt and Dr. Rainer Lorenz as
additional directors of the Company and they hold office till thc ensuing
annual general meeting. Being eligible, they offer themselves for re-
appointment. The Company has received a notice together with requisite
deposits from a member of the Company proposing the candidature of Mr. Saroj
Poddar, Mr. H.S. Kulkarni, Mrs. Yuti S. Bhatt and Dr Rainer Lorenz as
directors for consideration at the ensuing annual general meeting.
APPOINTMENT OF EXECUTIVE DIRECTORS
Consequent to the resignation of Mr. Ramesh Anvekar, as President/ Manager,
your Board of Directors have appointed Mr. H.S. Kulkarni and Mrs. Yuti S.
Bhatt as Executive Directros of the Company. The details of terms and
conditions and remuneration payable to them have been explained in the
explanatory statement attached to the notice. You are requested to accord
your approval to the resolution proposed in this behalf.
CHANGE OF NAME OF THE COMPANY
Consequent to termination of collaboration and other arrangements with the
erstwhile collaborators, M/s. Volkmann GmbH, Germany, your Directors have
thought it fit to change the name of the Company and hence, a special resolution is proposed at the annual general meeting for changing the name of
the Company to STAR SPlN & TWIST MACHINERIES LTD. The Registrar of Companies
has already confimmed that the proposed new name of the Company is available
and application to the Central Government will be made in this behalf after
the approval of the resolution by the members.
Your Company has continued to have Harmonious industrial relations with the
staff and workmen. Your directors are confident of maintaining the same and
achieving better utilisation of capacity in the current year and next.
BANKS AND FINANCIAL INSTITUTIONS
Your directors are happy to inform you that the bankers and financial
institutions of the Company have come forward with their continuous support
to the Company. The consortium of bankers have increased the working capital
of the Company thereby helping the Company to expand its manufacturing
INFORMATION PURSUANT TO SECTION 217(1)(e) OF THE COMPANIES ACT, 1956.
The information required under section 217(1 )(e) of the Companies Act 1956
is given in form A.
M/s. Nanubhai & Co., Chartered Accountants, Auditors of the Company who
retire at the annual general meeting are eligible for re-appointment. With
reference to the observations made by the auditors in their report, the notes
for the Financial Statements are self explanatory. Your directors wish to
draw attention of the shareholders specifically to the following notes: 1 ( I
), 6,7,8 and 9 regarding the same.
Your directors would like to place on record their deep sense of gratitude to
the Government of Karnataka, financial institutions and banks for their
continued support and co-operation. Our thanks are also due to all the
suppliers, customers and finally to all the employees of the Company for
their untiring efforts and commitment to their duties.
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
A) POWER AND FUEL CONSUMPTION
Untis 220644 284908
Total amount (Rs.) 550468 635,350
Rate per Unit (Rs.) 2.49 2.23b) Own Generation
i) Through diesel generator
units 6786 10630
Units per Ltr. of Diesel Oil (Rs.) 1.28 1.62
Cost per Unit (Rs.) 6.33 4.51
ii) Though Steam tubine/generator
Units NA NA
Units per Ltr. of Fuel Oil/Gas (Rs.) NA NA
Cost per unit (Rs.) NA NA
2) Coal (Sopecify quality and where used)
Quality (Tonnes) NA NA
Total cost (Rs.) NA NA
Average rate (Rs.) NA NA
3) Furnace Oil
Quantity (K. Ltrs.) NA NA
Total amount (Rs.) NA NA
Average rate (Rs.) NA NA
4) Others/internal Generation (_Please give details)
Quantity NA NA
Total cost (Rs.) NA NA
Rate per unit (Rs.) NA NA
B) CONSUMPTION PER UNIT OF PRODUCTION
Production (with details) units 10008.50 14119
Electricity -- --
Furnace oil -- --
Coal (specify quality) -- --
Others (specify) -- --
1) Several of the jobs with were doen outside till last year have been takne
for production in the factory and the components indigenised during the year
have been substantial as a result of which, the unit powr consumption is
comparatively more per unit of product manufactured.
2) Additional items of plant and machinery for improving the quality of the
product including the chemical laboratory for testing raw materials have also
added to addtional consumption of power.
A. RESEARCH & DEVELOPMENT
1. Specific areas in which R & D carried out by the Company:
a) Import substitution
b) Commercial production of mechanical stepless speed variators
2. Benefits derived as a result of R & D
a) Reduction in foreign exchange outlow.b) Readiness of the Company to Supply TFOT to meet all twisting requirements
Increased exports of TFOT in global market.
3. Future Plan of Action
a) Development of sophisticated TFOT for export marekt.
b) Development of energy efficient spindless for TFOTs.
c) Development of higher capacity mechanical stepless speed variators.
d) Development of TFOTs for wider dimensions.
4. Expenditure on R & D
(Rs. in millions)
Capital 0.729 1.153
Recurring 4.443 3.550
B. TECHNOLOGY ABOSRPTION ADAPTATION AND INNOVATION
1. Efforts in brief, made towards the technology absorption, adaptation and
a. Technology absorption of new models of TFOT and their toolings.
b. Product improvement by production of machines with more number of spindles
with less power consumption.
c. Development of new models of stepless speed variators.
d. Development of new models of TFOTs for carpet industry.
2. a. Benefits derived as a result of the above efforts ie. product
improvemen, cost reduction, product development, import substitution, etc.,
b. The mills now have access toa variety of models to suit specific
requirement of yarn twisting and cabling.
c. The mills now have access to machines with more spindlage less power
consumption, thereby saving on power and cost.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(Rs. in Millions)
Foreign exchange used. 21.659 29.278
Foreign exchange earned 17.458 10.070
BY ORDER OF THE BOARD
SURESH M. MEHTA
Dated : 2nd January, 199555