NARIMANPOINT CHEMICAL INDUSTRIES LIMITED
Your Directors hereby present their Report together with the Audited
Accounts of the Company for the year ended 31st March, 1998.
The turnover at Rs. 2021.60 Lacs is lower than the previous year's turnover
of Rs. 4309.16 Lacs. However during the year under review the Company has
incurred Gross Loss of Rs.1059.82 Lacs as compared to Gross Profit of Rs.
93.42 Lacs during the previous year.
During the year the management had taken the decision to shift the present
Umbergaon Plant to Surat for various reasons mentioned herein below:
1. To reduce the cost of production,
2. To avail tax benefits,
3. To avail the advantages of low transportation and power cost,
4. To reduce substantially the administrative expenses.
To this effect the Company had already settled the dues of majority of the
workers/staff of the Umbergaon Plant. As a result of which the Company's
Cash Flow got disturbed substantially.
Besides this during the year the cost of imported raw material shooted up
due to hike in US Dollar rates. Your Company was importing Raw material
from origin of Turkey. When the Letter of Credits were established by your
Company the US $ stood at Rs.36/- and subsequently the dollar firmed up to
Rs.43/-i.e. a rise of approximately 20%.However the market rate of our
finished product did not change due to heavy competition in the local
market and over seas market being sluggish. This had a disastrous effect on
the profitability of the Company. Further recession in the world economy to
which the Indian economy is not an exception, also had an unfavourable
impact on the performance of the Company.
Further during the year, due to labour problem at the factory, the
management of your Company had no choice but to declare lockout. Your
management is trying to negotiate with the workers/staff in order to arrive
at an amicable solution so that production can be restarted. Your Directors
are hopeful of arriving at some positive results shortly.
PROMISE V/S PERFORMANCE: (AS PER CLAUSE 43 OF THE LISTING AGREEMENT)
Your Company had given the following profitability projections in the
Letter of offer dated 9th February,1994 for Rights Issue:
(Rs. In Lacs)
Particulars Projections Performance
Sales & Other Income 6140.00 2051.28
Profit( Loss) After Tax 381.30 (1109.91)
Due to reasons mentioned above in "Operations" your Company could not
achieve the projected targets.
ANNUAL GENERAL MEETING
Due to organizational constraints, your Directors had to postpone the
Annual General Meeting. The Company has obtained the approval of the
Registrar of Companies under the second proviso to Section 166(1) of the
Companies Act,1956 for this postponement.
In accordance with the provisions of Section 256 of the Companies Act, 1956
Mr. B. M. Patel, Director of the Company retires at the ensuing Annual
General Meeting of the Company and being eligible offers himself for re-
Mr. K. C. Ajitkumar was appointed as an Additional Director of the Company
with effect from 12th September,1998. As an Additional Director of the
Company, he holds office until the ensuing Annual General Meeting under
Section 260 of the Companies Act,1956 and is eligible for re-
appointment. The Company has received a notice in writing from a member
signifying his intention to propose
Mr. K. C. Ajitkumar as a candidate for the office of Director. Your
Directors recommend his appointment on the Board.
Mr. Manish Khandelwal, Mr. Vilas Doshi and Mrs. Alpana Verma have resigned
as Directors of the Company with effect from 12th September, 1998. The
Board places on records the services rendered by them during their tenure
as Directors of the Company.
AUDITORS AND AUDITOR'S REPORT
The Auditors M/s. Rashmi Shah & Co retire at the conclusion of the ensuing
Annual General Meeting and have given their consent for appointment. The
Company has received a certificate from them to the effect that their re-
appointment, if made, will be within the prescribed limit of Section 224(1
B) of the Companies Act, 1956.
The shareholders will be required to elect auditors for the current year
and fix their remuneration.
QUALlFlCATlONS IN AUDITORS REPORT
The auditors in their report of even date have qualified the same in
respect of the following:
I) The dimunition in value of the investments made by the Company:
You are aware of the present economic scenario, where temporary depression
has engulfed the entire economy. The stock market prices are no exception
to this. There has been a drastic fall in the value of investments made by
your Company. Your directors are hopeful that with the improvement in
general economic conditions the market price of the investments will rise
and attain a desirable level.
2) During the year the company has incurred a loss of Rs 1109.91 Lacs which
has reduced the reserves of the Company to substantial extent. As a result
of this the applicable limits as prescribed under Section 372 of the
Companies Act,1956 are reduced substantially. In view of this the
Investments (in aggregate) exceed the limits prescribed under the said
provisions of the Act. In this regard, your Directors ar taking the
necessary steps to bring about the investments within the laid down limits.
The Company has not accepted or renewed any deposit during the year.
PARTICULARS OF EMPLOYEES
There is no employee covered under Section 217(2A) of the Companies
Act,1956 read with Companies (Particulars of Employees) Rules,1975.
Information regarding Conservation of Energy, Technology Absorption
Foreign Exchange Earnings and Outgo, required under Section 217(1) (e) of
the Companies Act,1956 read with Companies ( Disclosures of Particulars in
the Report of Board of Directors ) Rules,1988 is annexed and forms part of
Your Directors would like to express their grateful appreciation for the
assistance and co-operation received from the Financial Institutions and
Banks during the year under review. Your Directors wish to place on record
their deep sense of appreciation for the devoted services of the
Executives,Staff and Workers of the Company for its success.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Place : Mumbai B.M.PATEL
Dated : 27th November 1996 CHAIRMAN
ANNEXURE - A
A. CONSERVATION OF ENERGY
a) Measures taken:
As reported earlier the Company has already continued taking following
measures to conserve energy :-
(i) Additional power capacitors were installed to maintain the proper power
(ii) The Company has been able to give prompt attention to rectification of
b) Additional Investments and Improvements:
(i) Certain measures are already taken to reduce the steam consumption in
(ii) Incorporation of non-conventional source of energies are in process.
c. Impact of (a) and (b)
It is difficult to quantify the effect of energy conservation measures
taken by the Company.
d. Total energy consumption and energy consumption per unit and production.
B. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per form 'B' hereunder :-
Form of disclosures of particulars with respect to
Absorption of Technology, Research and Development (R & D).
Our R & D department is working out new products which will help the
Company to diversify for the Export Markets.
2. Benefits as a result of above R & D.
The Company is in a position to capture Export Markets subject to
3. Future plans of action:
Diversification into mining of Borats.
4. I. Expenditure on R & D:
a. Capital As the accounts were not maintained
b. Recurring separately these figures are not
c. Total available.
d. Total R & D as
percentage of turnover is still in progress
Il. TECHNOLOGY, ABSORPTION, ADAPTION AND INNOVATION -
FOREIGN EXCHANGE EARNINGS & OUTGO:
a. Total Foreign Exchange earned: NIL
b.Total Foreign Exchange used : Rs. 13,96,42,254