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Nariman Point Chemical Industries Ltd.

BSE: 524224 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Nariman Point Chemical Industries Ltd. (NARIMANPTCHEM) - Director Report

Company director report

NARIMANPOINT CHEMICAL INDUSTRIES LIMITED DIRECTORS' REPORT To The Shareholders, Your Directors hereby present their Report together with the Audited Accounts of the Company for the year ended 31st March, 1998. OPERATIONS 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 (1997-98) (1997-98) Rs. Rs. 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. DIRECTORS 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- appointment. 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. FIXED DEPOSITS 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. ADDITIONAL DISCLOSURES 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 this report. ACKNOWLEDGEMENT 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 factor. (ii) The Company has been able to give prompt attention to rectification of Steam Leaks b) Additional Investments and Improvements: (i) Certain measures are already taken to reduce the steam consumption in the plant (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. N.A. B. TECHNOLOGY ABSORPTION Efforts made in technology absorption as per form 'B' hereunder :- FORM B 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 International competition 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 - NIL FOREIGN EXCHANGE EARNINGS & OUTGO: EARNINGS: a. Total Foreign Exchange earned: NIL OUTGO: b.Total Foreign Exchange used : Rs. 13,96,42,254