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Saptak Chem & Business Ltd.

BSE: 506906 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE467X01015
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Saptak Chem & Business Ltd. (SAPTAKCHEM) - Director Report

Company director report

MUNAK CHEMICALS LIMITED ANNUAL REPORT 2001-2002 DIRECTOR'S REPORT Your Directors take pleasure in presenting to you the Twenty Second Annual Report and Audited Statements of Accounts for the year ended 30th June, 2002. FINANCIAL RESULTS AND OPERATIONS The company has shown dismal performance during the year under report due to unfavourable policies of the Government of India towards fertilizer industry in general and Single Super Phosphate Industry in particular coupled with glut situation created in DAP fertilizer in the market. This has adversely affected the market of Single Super Phosphate Industry and your company is one of the victims. As a result of this the Plant could trot run during the year. Plants In the state of Punjab and other parts of the country have either been closed down or incurring huge losses. Your company has made gross turnover of Rs.19.85 lacs as compared to Rs.230.12 lace in the previous year. After providing for depreciation amounting to Rs.6.53 lacs, the working results showed net loss of Rs.235.89 lacs as against a Net loss of Rs.83.89 lacs in the previous year. During the year, the Company has sold Plant & Machinery and incurred a loss of Rs.128.84 lacs. The net worth of the Company as on 30.06.2002 is Rs.1115.61 lacs. The Company has accumulated losses of Rs. 1257.77 lacs which has eroded the net worth of the Company. Your Director have formed an opinion that the Company has become a sick Company under Sick Industrial Companies (Special Provisions) Act, 1985 and would be-making an appropriate reference to the Board for Industrial and Financial Reconstruction for determination of the measures which shall be adopted with respect to the company. PRODUCTION Production during the year under report was Nil of Single Super phosphate and Nil of sulphuric acid as against 1799 MT and 8349 MT respectively in the previous year. SALES During the year under report, your Company has sold only 510 MT of sulphuric Acid as against 7560 MT in the previous year. FIXED DEPOSITS The Company has not accepted any fixed deposits from the public during the year. DIRECTORS Sh. P.D. Sharma, Director of the company retire by rotation under Article 123 of the Articles of Association of the company and being eligible offers himself for re-appointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed: i. that in the preparation of the annual accounts for the financial year ended 30th June,2002, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the company for the year under review; iii. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the Directors had prepared the accounts for the financial year ended 30th June, 2002 on a 'going concern' basis. AUDITORS M/s. S.C. Dewan & CO., Chartered Accountants, Auditors of the Company retires at the conclusion of ensuing Annual General Meeting and are eligible for reappointment. EXPLANATION TO OBSERVATIONS OF THE AUDITORS ARE AS FOLLOWS: PARA 2 (vi) The management was forced to take this hard decision to clear the full & final settlement dues of workers who were pressing very hard for release of their payments. However, the COmpany has sufficient Immovable Assets to secure the loan taken from Punjab State Government. NOTE NO. 1 (III) As the Plant remain closed during year and the Board of Directors has decided not to Charge Depreciation or Factory Building and Plant & Machinery in order to reflect the correct value of Building and Plant & Machinery in the Balance Sheet. NOTE N0.9 Efforts are being made to reconcile the Debit/Credit balances. Confirmation from some of the customers and suppliers is a awaited. NOTE NO. 12 The land was allotted to the Company on 99 years lease hold basis by PSIEC. The dispute was in regard to the total price of the land allotted by PSIEC and as such write-off in respect of land will be provided after dispute is resolved. PARTICULARS OF EMPLOYEES Particulars of Employees pursuant to the provision of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rule, 1975, is not annexed since none of the Employees was in receipt of remuneration higher than the limit fixed in the said Section. ENERGY CONSERVATION The particulars with respect to conservation of energy etc. as required under section 227 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of the Board of Directors) Rule, 1988 are annexed and form part of this report. CORPORATE GOVERNANCE As required by provisions of the Listing Agreement with the Stock Exchanges, the Report on Management Discussion and Analysis, Corporate Governance as well as the Auditor's Certificate regarding' compliance of Conditions of Corporate Governance are annexed to this Report. ACKNOWLEDGEMENTS Your Directors wish to convey thanks to all concerned departments of Central, State Governments, Financial Institutions led by IFCI and State Bank of India for their continued co-operation. Your Directors also express their appreciation of the dedication shown by the employees of the Company during the year. for and on behalf of the Board of Directors (P.D. SHARMA) (VIJAY KUMAR GARG) DIRECTOR MANAGING DIRECTOR PLACE : CHANDIGARH DATED : 14th October, 2002 ANNEXURE TO THE DIRECTORS' REPORT INFORMATION AS PER SECTION 217(1)(e) OF COMPANIES ACT, 1956, READ WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES, 1988 AND FORMING PART OF DIRECTORS' REPORT FOR THE YEAR ENDED 30TH June, 2002. A) CONSERVATION OF ENERGY The Company has reviewed all the electric motors and replaced the motors with a lower H.P. wherever possible. The Company is also strictly following the procedure of switching off motors which are not affecting our production. A) POWER AND FUEL CONSUMPTION Year ended Year ended 30th June, 2002 31st March, 2001 1) ELECTRICITY a) Purchase (Units/KWH) Nil 7,54,793 Total Amount (Rs.) Nil 32,13,136 Rate/Unit(Rs.) Nil 4,257 b) Own Generation i) Through Diesel Generator Nil 12,120 KWH Unitper Ltr.of Diesel Oil Nil 4.04 KWH Cost per Unit 3.77 ii) Through Steam Turbine/ Nil Generator Units Nil Nil Units Per Ltr. of Fuel Oil/Gas Nil Nil Cost/Unit Nil Nil 2) COAL N.A. N.A. 3) FURNACE OIL/DIESEL FO. Qty. (KL) Nil 2.56 Total Amount (Rs.) Nil 21,504 Average Rate (Per K.L.) Nil 8,400.00 DSL. Qty. (KL) Nil 25.30 Total Amount (Rs.) Nil 3,85,320 Average Rate (Per K.L.) Nil 15,230 4) OTHER/INTERNAL GENERATION Qty.(KL) NIL NIL Total Amount (Rs.) NIL NIL Average Rate (Per K.L.) NIL NIL A) CONSUMPTION PER UNIT OF PRODUCTION Unit (M.T) ASSP ASSP Electricity (KWH) Nil 52 Furnace Oil (K.L.) Nil 13.23 Coal NIL NIL Other Diesel (K.L.) Nil 16.59 B) TECHNOLOGY ABSORPTION 1) Research And Development: No Research & Development work has been carried out by the Company and therefore, there is no expenditure on this head or any other benefit accrued from it. 2) Technology Absorption The Company has not imported any technology for its plant. C) FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has not exported its products during the year under review, therefore, there is no foreign exchange earnings. There is no, foreign exchange out going for importing raw materials and others as the same is being procured from private parties. MANAGEMENT DISCUSSION AND ANALYSIS OVERALL REVIEW:- The Fertilizer Industry has been adversely effected due to the adverse Policies of Govt. of India, as a result thereof, margins have been under pressure due to withdrawal of subsidy. Business Segment a) Industry structure and development. The most of the Fertilizer Plants in India are lying closed or are on the verge of shut down of their operations. The development of the Industry wholly depends upon the policies of Govt. of India. b) Opportunities and threats. The opportunities are being explored to diversity in other areas as the SSP Fertilizer of India is facing threat low demand on one side and withdrawal of subsidy by Govt. on the other side. As such other business opportunities are being looked into. c) Risks and concerns. The Company has already closed the operation and there had been a Nil turnover of SSP, the mass product of the Company. d) Outlook So far as SSP Industry is concerned the future is very bleak due to availability of Imported Fertilizer and other substituted at more economical prices and drastic reduction in demand due to drought conditions in the northern part of India. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has proper and adequate system of internal control in order to ensure that all transactions are authorised, recorded and reported correctly. Regular internal audit checks are carried out to ensure that adequate systems are in place. The management continuously reviews the internal control systems and procedures to ensure orderly and efficient conduct of business. The emphasis of internal control prevails across functions and processes covering the entire activities of the company. COMPANY'S FINANCIAL PERFORMANCE AND ANALYSIS Other matters such as operational and financial performance have been discussed under the respective heads in the Director's Reports. HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS Our employees continue to be the backbone of our organisation. Our efforts are towards instilling a level of competency in the work force. The human resource has to be more dynamic and result oriented in the present day business environment. On behalf of Board of Directors PLACE : CHANDIGARH DATED : 14TH OCTOBER, 2002 (V.K. GARG) MANAGING DIRECTOR