NAVCOM OIL PRODUCTS LIMITED
THE MEMBERS OF THE COMPANY
Ladies & Gentlemen,
I extend to all of you a warm and cordial welcome to this 3rd Annual General
Meeting of your Company. The Notice for this Meeting, Annual Accounts and
Directors' Report for the year ended 31st March 1994 have been in your bands
for some time and with your pemission, I would to take them as read.
At the outset, I regert to inform you about the sad demise of the founder
member of the group Shri Ratanchandji Lunkad on 19th February 1994. Shri
Ratanchandji Lunkad along with his two brothers was instrumental in laying
the foundation of this business house in the year 1955, which has been able
to acheive turnover of more than Rs.250 crores for the year 1993-94. The
Company places on record its deep appreciation of the invaluable advice and
guidance of late Shri Ratanchandji Lunkad during his life.
The year under review has witnessed a fast changing economic scenario as a
result of the Government's efforts to achieve economic reforms through
liberalisation. The positive steps like rationalisation of direct and
indirect taxes, reduction in interest rates, convertibility of rupee and
decontrols wherever possible, have accelerated growth in our economy.
The decontrols effected by the Government, relaxation in Import-Export
Polices, etc. would certainly lead to healthy economic development. I would
like to assure you on behalf of the Board of Directors, that the company is
continuously and carefully studying these aspects and is planning its
business policies and expansion and diversification programmes accordingly.
It is a really happy event to note that the production of oilseeds is
increasing fast and morre and more area has been brought under the
cultivation of Oilseeds. The timely onset of monsoon and its spread in
various parts of the country is considered favourable for oilseed Agrculture.
The Government has recently permitted the exports of edible oil i small packs
and also allowed import of edible oil. The Company is keeping a close watch
on these developments and would be taking advantage of the opportunities at
the appropriate time. With this I can see a bright future for the oilseed
Sector in the years to come.
The year 1993-94 was the first year of full operations. Reviewing the working
of the Company for the year 1993-94, I feel quite comfortable with the
significant progress that your Company could acheive. The Turnover of Rs 64.55 crores and the Net Profit fo Rs 2.33 crores achieved by the Company
are quite satisfactory indicators. I am happy to report that the Net Profit
of Rs.2.33 crores earned is higher by about 48% compared to the Net Profit
projected in the Prospectus.
Earlier, I have mentioned about the Export Performance of the country, in the
Oilseed Sector. I am very glad and feel proud to state that your Company also
has contributed satisfactory in this field. The Export Turnover of the
Company rose sharply to Rs.14.95 crores constituting more than 23% of the
total turnover. I am pleased to inform you that the Company has, in its first
year of full operations, bagged recognition as an 'Export-House' from the
Government of India.
Inspite of the very encouraging results, the Board of Directors has
restricted the Dividend to 10% only, considering the diversification and
expansion plans on band and the necessity to ploughback the profits for a
better and stronger financial base of the Company. I am sure that you will
appreciate the same for the long-term benefit of the Company.
CURRENT YEAR'S PERFORMANCE
The Sales Turnover of the Company for the first five months ended 31st
August, 1994 amounted to Rs.35.49 crores as compared to Rs.13.72 crores in
the corresponding period during the previous year showing a growth of over
159%. Barring unforeseen circumstances the Company expects to achieve a
turnover of Rs.100 crores in the current year with all round good
EXPANSION AND DIVERSIFICATION
As referred earlier the Oilseed Sector has a very prominent role to play in
exports with certain improvements in the quality of the products. The Company
is well aware of the fact and accordingly has set up a new unit for
decorticuting Sunflower Seeds. This development is the first of its king in
our country and is in line with the policy of the Company to upgrade the
quality of its products on an ongoing basis. These decorticated Sunflower
Seeds are very popular in United States and no other Company in India is
engaged in it. The Company proposes to tie up the marketing arrangements with
a US based marketing agency for marketing of these high value added seeds.
Under the Expansion programme the Company is doubling its existing capacity
of Vanaspati Ghee Plant at Sangli.
Under the Diversification programmes the Company has already set up a Cattle
Feed Plant at Solapur. Further, it has ambitious plans which are being worked
out and are at an advanced stage. The Company intends to enter into the new
fields of Poultry Feed, Biotech and Power Sector as well.
Various options for financing these expansion and diversification programmes
are being worked out in consultation with the Lead Managers, and you will be
informed of the decision soon.
Before I conclude, I take this opportunity to thak my colleagues on the Board
for their supports and valuable guidance. I would like to express my sincere
thanks to I.D.B.I. and the bankers, state Bank of India, for their continued support and cooperation. I would also like to express my gratitude and pay
tribute to the dedication, sincerity and hardwork put in by all my colleagues
and other employees for furthering the progress of the company.
I now place the Balance Sheet and Directors' Report before you for your
Shantilal R. Lunkad