Shree Acids & Chemicals Ltd.
||Sector: Agri and agri inputs
||ISIN Code: INE142C01018
05:30 | 01 Jan
Shree Acids & Chemicals Ltd
05:30 | 01 Jan
Shree Acids & Chemicals Ltd
Shree Acids & Chemicals Ltd. (SHACIDSCHEM) - Chairman Speech
Company chairman speech
SHREE ACIDS AND CHEMICALS LTD
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.
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
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
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.
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.
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
DATE : 30th June, 1994.
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