Swojas Energy Foods Ltd Directors Report

SWOJAS ENERGY FOODS LIMITED DIRECTORS REPORT To, The Members, Your Directors have pleasure in presenting their Report together with the Audited Accounts of the Company for the period ended 31st December, 1998 1. OPERATIONS: The Operations during the period were effected by two main problems: Rise in the price of raw milk, quality of Instant Dairy Mix. The price of milk was rised in May by + 14% on top of the usual lean season rise. Moreover on the 1st June an 8% excise duty was imposed only on branded dairy products. The excise duty was further removed by end of July but the price hike remained. The company could pass on to consumer only 30% of the price increase. The Instant Dairy Mix traded in Eastern India was found not instantly saleable as requested by the market. The product was withdrawn and resold at a lower price. During the last quarter, four new products were prepared and tested in the market.: Table Butter, Shrikhand, Paneer, Dairy Whitener in consumer packs, all carry the PARMALAT brand name 2. ACCOUNTING YEAR: The accounting year of your Company has been changed from April - March to January-December. Hence this accounting year of the Company is ending on 31 st December 1998, and is of nine months period only. This Change has been made to coincide with the accounting year of our holding company, PARMALAT - S.p.A., Italy. 3. Y2K COMPLIANCE: The Company has assessed the Y2K problem and considering the same, necessary steps have been taken in this regard. Directors are hopeful to make the Company Y2K Free within a short period. 4. PUBLIC DEPOSITS: The Company has not accepted any deposits from the public and Shareholders during the period under review. 5. DIRECTORS: Unit Trust of India has withdrawn the nomination of Mr. Snehal Shah w.e.f 5th April,1999. The Board conveyed its sincere thanks to him for his kind co-operation during his tenure of office as a Nominee Director. In accordance with the Article 138(1) of Articles of Association of the Company, Capt. Rasiklal Kesharchand Shah and Mr. Francesco Giuffredi, Directors of the Company are liable to retire by rotation and being eligible offer themselves for reappointment. The Board recommends their re- appointment. 6. AUDITORS: M/s. Price Waterhouse & Co., Chartered Accountants, Auditors of the Company/ are retiring at the conclusion of this Annual General Meeting. The Company has received a letter dated 14th June, 1999 from M/s Price Waterhouse & Co., expressing their unwillingness to continue as Auditors of the Company. The said letter was taken on record by the Board of Directors in their meeting held on 15th June,1999. The Board of Directors recommends the appointment of M/s Deloitte Haskins & Sells, Chartered Accountants as Auditors of the Company in place of the retiring Auditors, M/s. Price Waterhouse & Co., Chartered Accountants. The Company has received a certificate from M/s Deloitte Haskins & Sells, Chartered Accountants conveying their eligibility under sub-section (1 B) of section 224 of the Companies Act, 1956, that if appointed, their appointment will be within the limits. 7. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure A and forms a part of this Report. 8. PARTICULARS OF EMPLOYEES: The particulars of employees as required to be disclosed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are set out in Annexure B and forms a part of this Report. 9. ACKNOWLEDGMENT: Your Directors wish to place on record their deep desire of appreciation for the devoted services of the executives, staff and workers of the Company. Finally the Directors wish to express their gratitude to the members for their continued support. For and on behalf of the Board of Directors Place: Pune GIORGIO LACOVARA Dated: August 4, 1999 CHAIRMAN & MANAGING DIRECTOR ANNEXURE A TO DIRECTORS REPORT Information required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988. FORM A Form for disclosure of particulars with respect to conservation of energy. A. CONSERVATION OF ENERGY: The Company has already installed efficient equipments while establishing the plant as to improve power factor and reduce power consumption. Also there are continuous and systematic efforts to optimise energy consumption and reduce energy costs through evaluation of performance. B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION: There is no technology absorption, adaptation and innovation during the period under review. C. FOREIGN EXCHANGE EARNINGS AND OUTGO: Foreign Exchange Earnings by way of Subscription by Parmalat S.p.A., Italy, for allotment of Equity Shares of the Company amounted to Rs. 164,575,000/- during the period under review. There was no foreign exchange outgo during the period under review. For and on behalf of the Board of Directors Place: Pune GIORGIO LACOVARA Dated: August 4, 1999 CHAIRMAN & MANAGING DIRECTOR