| Your Directors take pleasure in presenting their Ninth Annual Report
together with Audited Accounts for the period ended June 30, 2000.
YEAR IN RETROSPECT
During the period under review, the company's sales and other income was
Rs. 515.85 Crs. as compared to Rs. 543.68 Crs. achieved in the previous
period. The marginal decline in the sales compared to the previous period
is attributed to higher number of units replicated, which yield less unit
sales realisation. The company earned higher net profit of Rs. 40.48 Crs.,
compared to the net profit of Rs.17.80 Crs. earned during the previous
period, as a result of change in the product-mix and emphasis on sales from
Technology division, which yields comparatively higher contribution margin.
EXPANSION DURING THE YEAR
The CD/DVD plant with an installed capacity of 11 million units of CD/DVD
per annum was commissioned in September 1999. This plant is the first of
its kind in India. With this, the company has become the largest facility
for manufacture of CD/DVDs in India.
The company also successfully commissioned 5 colour Dry Offset online
printing machine from Kamman, Germany with an installed capacity of over 30
million units per annum. This machine has automated visualising and
printing system which is being used to produce real photographic quality
images.
The CD/DVD mastering plant with an installed capacity of 15000 stampers per
annum, was also installed along with the above plant. This facility, first
of its kind in India, reduces the lead time for stamper from 14 days to
less than 45 minutes, eliminates dependence on external factors for
procurement of stampers. It also reduces t,he cost of stamper by almost
Rs.15000 per piece and saves precious foreign exchange outflow, required
hither to before for stamper making.
As a result of efforts towards stronger distribution network and
introduction of new and varied products the performance of the company is
showing consistant improvement.
*TECHNOLOGY DIVISION
The technology division of the company comprises CD/ DVD manufacturing,
Multimedia Development and Designer CDs.
* CD/DVD MANUFACTURING
The company is the first in India to have come up with CD and DVD
manufacturing plant in collaboration with M/s Toolex of the Netherlands
It is the only integrated facility of its kind in India with CD/ DVD
replication, multimedia development and marketing of software under one
roof with an installed capacity of over 16.7 million units of CDs/DVDs per
annum.
The benefits of integrated facilities are manyfolds. This reduces risks of
piracy, gives world class quality imaging, improves competitive edge not
only for the Indian market, but also for the world markets.
The company has the flexibility to produce both CD and DVD. It is
universally accepted that DVD will be the format of the future. The company
has strategically placed itself into this product. DVD encompasses all
facets of the entertainment business. It will provide greater value
addition to customers de to higher storage capacity. DVD has high
versatility leading to clearer images and corruption free software leading
to high broadcast quality and high resolution pictures and sound. Due to
the quality for product and services, fastest delivering schedule in India,
company is able to serve its prestigious clients like BPL, Bambino Audio,
Cannon, Cyber Mulimedia, Department of Tourism, Deptt. of Electronics
Software Councils of India, IANCA, IATI (Philips), LG, Maruti Udyog Ltd.,
MTNL, NIIT, Samsung, Sony, Tata Infotech, VSNL, etc.
* MULTIMEDIA
Overall, the market for multimedia in India is witnessing an upswing, since
1992. Keeping pace with changing market trends, the company is having one
of the best studios in India to produce Animation films, gaming engines for
role playing games,'strategic games, sports related games, edutainment CD-
ROM's and interactive educational projects. Company has developed in house,
a number of CD-ROM titles including few of the best selling titles like, 50
years of Independence, Panchtantra, Karishma etc.
The company has the largest domestic distribution network of distributors,
dealers and retailers covering more than 85% of the user population. It has
one of the largest collection of CD ROM titles in India for games.
Strategic Alliances
The company has also entered into strategic tie-ups with multimedia major
across the globe like, Microprose of U.K. Pinpoint of Denmark, Iridon
Interactive, Sweden, Activision, Australia, Europress, U.K., Prism Leisure
of UK, Rainbow Tech. of USA, Simon Schuster, Germany, ITE Media Denmark,
CD-ROM Update, Denmark, Monolith, USA, Interplay, U.K.
Europress
Located in U.K. Europress, is a provider of powerful international PR
solutions tailored to meet the needs of today's technology companies.
Iridon
Based just outside Gothenburg, on the west coast of Sweden, Iridon is owned
by people that actually care about bringing interactive entertainment to
the global masses. Currently Iridon's development talent is comprised of
number of designers, producers, programmers, artists and sound engineers.
Activision
It is a caliofornia based company, with a revenue of more than $ 500
million per annum. They are the leaders in the video gaming world. They are
the pioneer of the video game industry. Its decade old Pitfall tomb raiding
game is still remembered fondly. Few of the best titles are Defender,
Castle, etc.
Monolith
Founded in 1995 and based in Kirklan, Washington, is one of the leading
developer founded and developer-centric publishers, in the gaming
community. Recognised for their stylish and high energy approach to
development, Monolith creates the content gamers want, often using their
own proprietary technology.
Interplay
Interplay Entertainment Corpn. is worldwide developer, publisher and
distributor of award winning entertainment software for both core gamers
and the mass market. Founded in 1983, Interplay offers a broad range of
products in the action, adventure, role-playing, strategy and sports
categories across multiple platforms including Playstations, Dreamcast and
Nintendo 64.
Few of the best selling tiles include Descent, Virtual Pool, Fallout,
Baldur's Gate and Earthworm Jim.
The company has also done strategic alliance for supply of entertainment
video and music and CD ROM bundling with companies like Samsung Vintron;
HCL, Cannon, etc.
The clients for this segment includes prestigeous clients like Department
of Tourism, IGNOU, Indian Embassy of Berlin, Germany, Ministry of Defence,
Ministry of Eternal Affairs, US Embassy, PNB, DSJ Communication and many
more.
+ DESIGNER CD
Our company also launched for the first time in India, Designer CD's,
developed through in-house R&D, a patentable concept for designing CDs to
almost any shape and size. This offers nascent field having tremendous
prospects, as the company enjoys vitual monopoly in this product.
Designer CD
Designer CD's can be used as product sampling, as Travelogue, as a VIP
pass, as an AD Teaser, as a Visiting Card etc.
In the organised sector, company expects to capture 10% of the market
share, estimated at around Rs.1000 crores.
The client list includes industry majors like: Infosys, BPL, Titan, IMI,
LG, Samsung, National Panasonic, Philips, Ansals, Poddar Infotech, Archies,
etc.
* PET
Eventhough, company is one of the largest players in the manufacturing and
marketing of PET products, the margins from the business are shrinking due
to severe competition from new entrants in the small scale sector, who
enjoys better tax advantage.
* BUSINESS AND FINANCIAL RESTRUCTURING
Due to the shrinking margins in the PET Division, the company has decided
to, hive-off the PET Division, as a going business.
To company has already Initiated,the process of hiving-off with
restrospective effect from 1st July, 2000.
After hiving-off the PET business, the focus will be towards the
Information Technology (IT).
To achieve financial restructuring, company has entered into settlement
with various banks and financial institutions with a view to reduce its
debt burden. It is hopeful to become a zero debt entity, within a year.
The financial restructuring will help in reducing the interest burden on
the company and would result in saving of around Rs. 30 crores every year.
This will consequently result in better performance.
* FUTURE FORAYS
In view of the insatible demand for CD/DVD the company is planning to
upgrade Multimedia Studio, produce CD-R and CD-RW and add 2 more lines for
DVD production, to tripple the existing facilities. Besides, the company is
also planning to enter into the area of Internet Portal.
Company plans to set up multimedia studios at Delhi, Bangalore and Bombay.
The studio's will be interlined so as to be production flexible. Special
focus will be given to produce gaming titles, animation films and education
projects.
With huge and expanding base of recorders, consumption is expected to reach
500 million pieces per year by 2005. To meet the increasing demand for
digital storage devices, company is also planning to enter into the
production of CD-R and CD-RW. These products are best suited for long term
data storage, archiving and distribution and wide range of everyday
personal and corporate backup as well as short term data storage
applications.
The portal segment will include an immense multi- store, virtual
entertainment emporium starting with a music store, followed by other
stores for products like CD-Video, CD-ROM, DVD, etc. It would not only
carry albums of all leading music labels, but also from other low-profile
known labels. It will be specifically and exclusively devoted to on-line
retailing of music and entertainment software site.
+ RESEARCH AND DEVELOPMENT
During the period under review, the R&D unit continued to play a key role
in improvement of process development, process modification &
product development. The company also developed through in-house R&D a
patented concept for designing CD's to almost any shape for the first time
in India. To further strengthen its R&D facilities, your company is
planning to make additional investment in future to further improve the
performance of the existing products.
* COLLABORATION
We are pleased to inform that relationship with our foreign collaborators
continued to be cordial during the period under review. Their active
participation, support and technical expertise are being fully utilised for
improving the operations of the company.
* CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS
AND OUTGOINGS
The particulars are given in the addendum to his report.
* DIVIDEND
Though the company has disposable profits, in order to conserve financial
resources to meet the obligations under Settlement of dues to banks and
Financial Institutions, the Board of Directors have not recommended any
dividend for the period under review.
+ INCREASE IN EQUITY SHARE CAPITAL
During the period under review, the company had issued 2 crore equity
shares aggregating to Rs. 20 crores, on private placement basis to various
body corporates.
* FIXED DEPOSITS
The company has not accepted any fresh fixed deposits from the
public/shareholders.
+ DEMAT OF EQUITY SHARES
The company has entered into an agreement with NSDL & CDSL to facilitate
the holding/trading of the company's shares in electronic form. As per SEBI
Notification the company's Equity Shares are being traded in Compulsory
Dematerialisation Mode in the Stock Exchanges w.e.f. 28th August, 2000.
* DIRECTORS
During the period under review, Mr. V.B. Mainkar and Lt. Gen. R.V. Kulkarni
resigned from the Directorship of the Company. Our directors place on
record their deep appreciation for the guidance and valuable contribution
made by them during their tenure.
The IFCI Ltd. has nominated Mr. H.N. Belawat as a Director of the Company
in place of Mr. N.K. Bakshi. Your Directors lace on record their deep
appreciation for the valuable guidance and contribution made by Mr. N.K.
Bakshi during his tenure.
Mr. Mitsuo Shimojo, Director of the company, who retires by rotation and
being eligible offers himself for reappointment.
* NAME CHANGE
With a view to reflect proper business scenario, the name of the Company
has been changed from PADMINI POLYMERS LIMITED to PADMINI TECHNOLOGIES
LIMITED with effect from 14th June, 2000.
* EMPLOYEES STOCK OPTION PLAN (ESOP)
In order to reward and motivate employees of the company and also to
attract ad retain the best talent, your Directors recommend for your
approval a proposal for issue of 10 lacs equity shares to the employees and
eligible Directors of the company under ESOP. The board details of the ESOP
have been set out in the notice convening this Annual General Meeting. ,
* PARTICULARS OF EMPLOYEES
A statement of particulars of Employees, as required under section 217(2A)
of the Companies Act, 1956 is annexed and forms integral part of this
report.
* AUDITORS
M/s. Ashok Amar & Associates, Chartered Accountants, New Delhi have
furnished a certificate under section 224(1 B) of the Companies Act,1956 to
the effect that their appointment if made, at the ensuing Annual General
Meeting of the Company will be within the limits as prescribed under the
Companies Act, 1956.
Your Directors recommend for your approval the re-appointment of M/s. Ashok
Amar & Associates, Chartered Accountants, New Delhi as Statutory Auditors.
* ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for the
assistance and sincere co-operation received from the Financial
Institutions, Banks, Central and State Government Authorities. Your
Directors also place on record their deep sense of appreciation for the
support and goodwill extended by the Employees and Shareholders of the
Company.
for and on behalf of the Board
New Delhi VIVEK NAGPAL
28th August, 2000 Chairman and Managing Director
ANNEXURE TO DIRECTORS' REPORT
PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY
a) Using imported and superior raw material.
b) Installation of air-conditioning units in the production unit to control
humidity and temperature leading to lower rejection of material.
c) Superior quality air dryer installed to reduce the purging losses and
give clean air for better production quality.
d) Power generator of appropriate capacity installed and electrical circuit
has been separated into two parts to avoid excess power costs.
e) Use a low pressure screw compressors for the operation and high pressure
compressors for blowing resulting in saving of power.
f) Installed one new air drying units with 0.1 micron filters.
g) Installed electrical station with captive generation by generators.
h) Installed new compressors for blowing and operation separately.
i) Installed Air Conditioning units at plants.
j) The installed soft starters for compressors.
B. TECHNOLOGY ABSORPTION
Research & Development
a) Development of new products/designs/processors/methods, improving ot
systems In existing products/processors .
b) Development of new moulds for different shapes and designs.
c) Designed new material handling systems, which includes unloading of
jumbo bags of 1 ton raw material, shifting of finished goods from shop
floor to store by conveyors and despatch of goods.
d) Developed new products, i.e. Designer CD
C. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
a. Efforts in brief, made towards technology absorption, adaptation and
innovation.
i. Company's personnel were deputed abroad for training and exposure to
latest products, designs and manufacturing technologies and tecHniques.
ii. Attending National/international Conferences, Seminars and Exhibitions.
iii. Adaptation/modification of imported designs/technologies to suit
indigenous requirements, alternative materials/components .
b. Benefits derived as a result of above efforts e.g. product improvement,
cost reduction, produce development import substitution etc.
All the above efforts resulted in improving the existing processes, product
quality, performance, productivity,reliability and serviceability,
reduction of cost, import substitution introduction of new products and
better accuracy, speed safety, standards, aesthetics and economy.
c. In case of imported technology (imported during the last five years
reckoned from the beginning of the financial year) following information
may be furnished.
Product Technology from Year of Status of
import absorption/
adaptation
Compact Discs/ ODME of, 1996 Fully absorbed
CD-ROMS Netherlands
DVD Toolex of 1999 Fully absorbed
Netherlands
Colour Printing Kamman of 1999 Fully absorbed
Germany
D. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS
Foreign Exchange Earnings Nil
Foreign Exchange Outgoings Rs. 2l275.66 lacs
For and on behalf of the Board
New Delhi (VIVEK NAGPAL)
28th August, 2000 Chairman & Managing Director
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