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Shree Acids & Chemicals Ltd.

BSE: 506900 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE142C01018
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Shree Acids & Chemicals Ltd. (SHACIDSCHEM) - Chairman Speech

Company chairman speech

1994 SHREE ACIDS AND CHEMICALS LTD CHAIRMAN'S SPEECH Dear shareholders, I have great pleasure in welcoming you all to the 14th Annual General Meeting of your Company. The annual accounts for the year ended 31st December, 1993 alongwith the Directors' Report and the Auditors' Report have been with you for some time now, and I hope that your have gone through the same. With your permission, I take them as read. Operations The period under consideration was of economic recession for both the phosphatic fertilisers and the paper industry. Your company passed through the mosst trying time during this period. As a result of this, your company posted a cash loss of Rs.597.53 lacs. After, considering the excess provision of depreciation amounting to Rs.262.95 lacs there is a net loss of Rs.424.16 lacs. Fertiliser Division Government of India decontrolled the fertiliser industry from August, 1992. Along with the decontrol, the Govt. also removed subsidy on the sale of phosphatic fertilizer. This has resulted in a steep price increase. Due to this, there was a total recession in the market in the off-take of the phosphatic fetiliser either closed down or reduced their production substantially. Your unit was also severely affected by these measures taken by the Govt. As a result, despite of the fact that the production was reduced during the last year, the company has to carry a heavy inventory of over 18,000 MT at the beginning of the year under review. The Management took a decision that there was no purpose in running the fertiliser unit till this inventory is liquidated. The situation continued during the current year also. It is only in thee first six months of the year that this inventory could be liquidated and the fertiliser unit of the company remain closed for the first six months of the year under review. To overcome the domestic demand recession of SSP, your company started exploring new markets and was successful in the tie-up of an export market. The major breakthrough was made in the export of SSP to Bangladesh. I am happy to state that your company is the first and the largest exporter of SSP in the country. You will be glad to know that during the current year your company has already made export despatches of over 23000 MT valued at Rs.630 lacs till 31st May. 1994. The company's order book is full with export orders of 25000 MT. The demand of SSP in the domestic market is also expected to pick up in the main Rabi season beginning October, 1994. The Company has also signed an MOU with Nagarjuna Fertilisers & Chemicals Ltd, for marketing SSP in the Eastern and Southern India. With such positive developments your company's SSP plant is now running to full capacity. Production of SSP upto May 1994 has been of 25,364 MT as against the production of only 2,698 MT during the previous year in the same period. The turnover of Fertiliser Division upto 31st May, 1994 has been of the order of Rs.830.90 lacs as against the sale of Rs.112.12 lacs during the preceding year in the same period. It is obvious that we are on our pat to recovery and we hope that your company should record profits in its operations during the current year. Paper Division The paper division is also passing through a recessionary phase and your company is finding it difficult to market its production. Though certain favourable policy decisions have been announced by the Govt. by way of reduction in duty on waste paper. Its favourable impact on the demand and price realisation is still not noticeable. Financial problems Your company incurred heavy cash losses during the year under review and was unable to pay interest and instalments to the financial institutions. A proposal was therefore made to the financial institutions for the financial re-structuring which is now under their consideration. Your company will be approaching you for your approval at an appropriate time. Acknowledgement I am grateful to our bankers Punjab National Bank and the Financial Institutions led by IFCI for their continous support and guidance. My thanks are also due to my colleagues on the Board for their guidance and continous support in dealing with the matters of your company. I am also thankful to our dealers for their supports in penetrating new markets and establishing an image of our product in the minds of customers particularly during difficult market conditions. I am particularly grateful to the Central and State Government agencies for their continous support and guidance. My most sincere thanks are also due to our shareholders for the patience and confidence they have always shown towards the company and its management. Thank you. V.K. MODI CHAIRMAN DATE : 30th June, 1994.