SAINIK FINANCE & INDUSTRI Share price

The Company was incorporated in the State of Andhra Pradeshas Public Limited Company on the 16th Day of December1991 and received the Certificate for Commencement ofBusiness on 1st January 1992. The registered office ofthe company at the time of incorporation was at 1-11-217/2Begumpet Hyderabad - 500 016 which was subsequentlyshifted to 1-11-220/A Begumpet Hyderabad - 500 016 videBoard Resolution passed on 29.02.1996.The Company is a medium scale unit.On February 28 1992 the Company had purchased fixedassets worth Rs. 2150000/- from APSFC under section 29 ofSFC Act. These fixed assets comprise of land buildingsand plant and machinery located at Vedadri villageJaggayapet Mandal Krishna District Andhra Pradesh. Ofthe above said consideration of Rs.2150000/- the Companymade a down payment of Rs.537500/- and the balance amountof Rs. 1612500- was treated by APSFC as long term loanfor 5 year as per their sanction letter no.AFC/MROR/APR/90-91 Dated 28.06.1991.Further in June 1993 the sale consideration was reduced byRs. 1.90 lacs to accommodate the cost of the missing partsin the plant and machinery. Consequently the term loan wasalso revised to Rs.1422500/- by APSFC vide their letterno.AFC/MR&R/III/TRG/93-94/012970 Dated 03.06.1993. Againin March 1994 APSFC sanctioned vide their letter no.AFC/PROJS/T-IV/608450/93- 94/0373 Dated 31.03.1994 asadditional term loan of Rs.14.70 lacs to part finance theexpansion programme envisaged by the company. Neverthelessthe company did not utilise the additional term loansanctioned as the sanction was delayed by 18 months fromthe date of application and interest rates have gone up by5.2% in this period.The Company proposed to expand its existing installedcapacity of 16500 TPA to 82500 TPA in two phases of33000 TPA each. Further the Company has proposed to startits commercial production of the existing unit of 16500TPA Capacity by May ''96.The industry background is also conducive forimplementation of the company''s expansion programme. Theinstalled capacity for 1993-94 stands at 76.96 milliontonnes (MT) and is expected to rise to 90 MT by 1996-97.According to Planning Commission at the end of the EighthPlan (1996-97) the demand is estimated to be around 81 MTincluding 76 MT of local demand and an export target of 5MT.The overall demand is expected to grow at 6% per annum.The liberalisation will lead to an increase in industrialactivity and infrastructural development. Added to thisthe rising demand for housing sector and opening up of newmarkets by way of concretisation of roads with privatesector participation should result in surge in demand forcement. In the long run its future is bright. (Source:DSJ-Vol X.No.2).Present Business of the Company:The company is in the process of implementing the projectand has not yet started the commercial production.Immediately after the incorporation of the company it haspurchased the fixed assets from APSFC in 1992. The Companyhad applied with APSFC for additional Term Loan in 1992 andobtained the sanction in 1994. Meanwhile by solicitingequity funds from the promoters their friends andrelatives the Company proceeded on its own to complete thecivil works and buildings. Also the company had procuredthe Plant & Machinery for the 16500 tpa Plant by May 1995.The installation of the same is completed in Dec 1995 andthe Commercial production is scheduled to start in May1996.