JAYASWAL NECO INDUSTR Share price

NAGPUR ENGINEERING COMPANY LTD. (NECO) the flagship Company of the Neco Group was originally incorporated as a Private Limited Company and obtained the Certificate of Incorporiation on November 28 1972. It commenced commercial operiations in 1976 for the manufacture of castiron pipes and fittings by setting up their first foundry at Nagpur Maharashtra. Subsequently the company was converted into a Public Limited Company on November 21 1985. In 1987 the Company''s second foundry unit for manufacture of the same product range was established at Bhilai in Mahdya Pradesh and with further increase in product demand the third unit was established at Anjora Rajandgaon in Madhya Pradesh in October 1991.The company''s principal customers are the construction industry and the Indian Railways. It also exports Cast Iron Castings for construction and Municipal requirements to Middle East and Japan averaging about 2000 MT per annum. The Company is the recipient of the Export Excellence Award from the Engineering Export Promotion Council in recognition of achieving highest export performance amongst the SSI exporters in the panel Cast Iron Pipes Fittings and other Sanitary Castings for the year 1992-93.With a view to diversify its activity the company decided to set up a Solvent Extraction Plant with a crushing capacity of 500 TPD and refining capacity of 100 TPD. The company was offered a newly ereccted Solvent Extraction Plant having a crushing capacity of 200 TPD and refining capacity of 25 TPD which had begun its trial runs. Thisplant was erected by NAFPL promoted by Mr. S H Agarwal & others who were already in the bussiness of trading in soyabean oilseeds & food grains. The Company then decided to take up the Plant and enhance its crushing capacity from 200 TPD to 500 TPD and refining capacity from 25 TPD to 100 TPD.In the process of acquisition the entire shares of NAFPL were first acquird by the Promoters & Associates of NECO whereby it became a group Company; and further the entire Assets and Liabiliites were purchased by NECO out of the Internal Accruals at book value. To effect the transfer of the Immovable Property i.e. Land Building Plant andMachinery etc. a Sale Deed dated March 27 1993 was executed by NAFPL in favour of NECO. The details of the Assets and Liabilities taken over are as follows: (Rs.in lacs)AssetsLand and site development 2.87Factory shed & buildings 117.51Plant & Machinery Misc. Fixed Assets and other deposits 295.35 415.73LiabilitiesTerm Loan From SICOM 145.00From MSFC 75.85 220.85Net Consideration paid 194.88The necessary registration/licences are also obtained by the Company from the concerned authorities.After the acquisition the Company commenced commercial production immediately and simultaneously started the expansion programme. During 1993-94 the crushing capacity was increased to 300 TPD which is being further increased to 500 TPD and refining capacity is being increased to 100 TPD.