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Tuticorin Alkali to develop salt fields

Our Bureau

CHENNAI, March 30

TUTICORIN Alkali Chemicals and Fertilisers Ltd (TAC), part of the city-based M.A. Chidambaram group, is planning backward integration by acquiring lands for the development of salt fields near Tuticorin, in order to meet a major part of its requirements, according to the Chairman, Mr. A.C. Muthiah.

Mr. Muthiah's speech was read out at the TAC annual general meeting of shareholders on Thursday by Mr. P.R. Sundaravadivelu, one of the directors of the company.

In his speech, Mr. Muthiah stated that the company was looking for tie-ups with multinationals for the production and marketing of bio-pesticides.

``The outlook for the company's main product, soda ash, was good because favourable orders have been obtained from the MRTP Commission against the predatory pricing of Chinese exporters. An anti-dumping duty has been imposed on soda ash of Chinese origin .''

The shareholders passed resolutions enabling the company to mortgage assets to raise Rs. 5 crores from Tamilnad Mercantile Bank, Rs. 10 crores from IDBI and Rs. 1.27 crores from South Indian Bank. They were informed that these loans were being obtained a t rates of around 16 per cent.

In addition, they approved another resolution raising the borrowing limit of the board of directors from Rs. 100 crores to Rs. 150 crores.

For the year ended September 30, TAC registered a turnover of Rs. 128.77 crores, as against Rs. 125.99 crores during the previous year. The net profit dipped to Rs. 1.67 crores from Rs. 3.03 crores earlier.

In their report, Fraser & Ross, the auditors, have pointed out that the company had capitalised interest costs ``relating to period after commencement of production in earlier years''.

The amount as on September 30 was Rs. 3.66 crores. Besides, `overcharge of depreciation for the year' amounted to Rs. 1.38 crores while `non-consideration of decline in the value of investments' worked out to Rs. 2.41 crores.

All these have an effect of ``overstatement of the fixed assets by Rs. 3.66 crores and profit by Rs. 1.03 crores'', according to the auditors.

Mr. Lakshmikantan, a shareholder, pointed out that while the turnover had increased by Rs. 2.78 crores _ from Rs. 125.98 crores to Rs. 128.76 crores _ the expenditure on `commission and discount' had gone up by Rs. 4.30 crores. Mr. Sundaravadivelu replie d that such a level of expenditure had been necessary.