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Paschim Petrochem Ltd.

BSE: 531005 Sector: Industrials
NSE: N.A. ISIN Code: INE066B01011
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Paschim Petrochem Ltd. (PASCHIMPETROCH) - Director Report

Company director report

ANNUAL REPORT 1998-99 PASCHIM PETROCHEM LIMITED DIRECTORS REPORT To The Members, Praschim Petrochem Limited. Your Directors have great pleasure in presenting the 16th Annual Report of your company with audited accounts for the financial year ending 31st March, 1999. DIVIDEND In view of the need to conserve the resources for the future, the directors do not recommend any dividend for the year under review. OPERATIONS As the members are aware, the project has been completed and commercial production commenced during the year under review. But due to failure in achieving the desired purity levels in respect of Para Diethyl Benzene (PDEB), the installed capacity was underutilised However, your company was able to add a few industrial solvents in the product range manufactured, which helped in the company in achieving a manufacturing turnover of Rs. 1516.20 lakhs. FUTURE OUTLOOK Due to the unstinted efforts of the technical team, your company is now close to achieving the purity levels desired by petrochemicals giants like Reliance, IPGL, Bongaigoan Refinery etc. in respect of PDEB. Once this achieved, your company is planning to substantially expand the existing capacity for manufacturing PDEB, since it is expected that the demand for this product in the petrochemicals industry will grow exponentially. INCOME TAX During the year under review search and seizure operations were initiated by the Income Tax authorities. Consequently some offices premises of your Company were searched and some records were seized. Your returns under block assessment. Your directors are of the view that no further provisions for income tax needs to be made in respect to these prior years. YEAR 2000 (Y2K) Your Company recognises the implications of the Y2K issue and has already set up an internal task force, which is accountable to the Managing Director for the purpose of ensuing that your company is Y2K ready. Most of the operations, processes and functions which could be affected due to the Y2K have been identified. The purchased softwares are Y2K compliant. The non compliant hardware including PCs are being phased out gradually and orders have been placed for new PCs. This is expected to be completed by October 1999. Since non computer systems and equipments have not been programmed to work based on dates,they are unlikely to create any Y2K implications. Nevertheless Y2K compliance certificates have been sought from the vendors. Your company is in the process of obtaining responses from third parties viz business partners / associates, customers and suppliers regarding the Y2K implications. Regular follow-up is being made to complete this exercise well in time. A comprehensive contingency plan for addressing Y2K related issues is being prepared to minimise the risk of distruption of operations due to the Y2K problem. The cost of remediation and other efforts is not likely to exceed Rs.20 lakhs. Very insignificant expenditure has been incurred until 31st March, 1999. DIRECTORS During the year under review, Mr. Amir Mohammed Sayyed was appointed as a Whole Time Director with effect from 1st December, 1998 for one year. Mr. Baldev Singh I. Vijan retires by rotation but being eligible offers himself for re-appointment. The proposal for appointment of Mr. Surendra Singh I. Vijan as Managing Director and Baldev Singh I. Vijan as Executive Director in accordance with the provisions of Schedule XIII to the Companies Act, 1956 is placed before the members for approval. AUDITOR'S REPORT The observations in the Auditor's Report are suitably explained in the Notes to the Accounts and do not call for any further explanation. AUDITORS The present auditors M/s. Borkar & Muzumdar,Chartered Accountants have expressed their inability to continue as auditors after the forthcoming annual general meeting, due to other preoccupations. There is a proposal for appointment of M/s. Parekh Mehta & Associates, Chartered Accountants as the Auditors of the company at the forthcoming annual general meeting. M/s. Parekh Mehta & Associates. have confirmed that, if appointed, their appointment shall be within the limits specified in Section 22 (1) (B) of the Companies Act, 1956. Members are requested to appoint the auditors and fix their remuneration DEPOSITS Your company has not accepted any deposit from public within the meaning of Section 58-A of the Companies Act,1956 and the rules made thereunder. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars required under Section 217 (1) (e) of the Companies Act,1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 is annexed to this report. PARTICULARS OF EMPLOYEES Since, your company has no employee who were paid remuneration in excess of Rs. 6100,000/- per annum, if employed through1out the year and in excess of Rs. 50,000/- per month, if employed for part of the year particulars required under Section 217 (2) (A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is not annexed to this report. ACKNOWLEDGEMENTS Your directors have pleasure in recording their appreciation of the continue assistance and Co-operation extended to the Company by the Banks, Financial Institutions, Customers, suppliers and other. Your directors also wish to record their appreciation of the sincere and dedicated services rendered by the employees of the Company at all levels. For and on behalf of the Board Sd/- Surendra Singh I. Vijan (Chairman & Managing Director) Place: Mumbai Date : 10th June,1999. ANNEXURE TO DIRECTOR'S REPORT Information under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Board of Directors) Rules, 1988 and forming part of the Director's Report for the year ended 31st March,1999. A. CONSERVATION OF ENERGY. a) Energy conservation records taken and its impact. This being the first year of manufacturing operations commercially, the impact of the energy conservation measures taken during the year can be assessed in the following years. b) Energy consumption as per Form A. Form for disclosure of Particulars with respect to conservation of energy. RESEARCH & DEVELOPMENT 1. Specified areas in which R & D carried out by the Company. 1) Raw material Ethyl Benzene manufacturing process is being developed on- commercial scale. 2) Separation of Petrochemicals for value addition of product. 3) improvement in product quality. 2. Benefits derived as a result of the above R & D 1) Import substitution of Raw material. 2) Manufacture of Industrial solvents added to best utilise manufacturing facilities. 3. Future plan of action 1) Continue efforts for new product Development & matching purity levels of PDEB. 2) Conservation of energy for cost reduction 4. Expenditure on R & D (Rs. Lakhs) 1998-99 1998-98 Capital 4.5 4.96 Revenue 1.47 0.43 Total 5.97 5.39 Technology Absorption,adaptation & innovation: 1. Efforts in brief made towards technology absorption, adaption and innovation. Your Company developed technology with-in-house efforts for Para-Di-Ethyl Benzene manufacturing base on catalyst supplied I. P. C. L. & their guidance. 2. Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development,import substitution etc. Your company is able to supply import substitute PDEB (Energy conservation measures being undertake the impact of these measures can be assessed in the coming years. 3. Information regarding imported technology. Not applicable,since technology is purchased from I.P.C.L. an Indian company. Foreign Exchange Earning and outgo: 1998-99 1997-98 1. Earnings Rs. Nil Rs. Nil 2. Outgo Rs. 42.68 lakhs Rs. 13.13 lakhs For and on behalf of the Board sd/- Surendra Singh I. Vijayan (Chairman & Managing Director) Place: Mumbai Date : 10th June,1999.