The shareholders of Nilkamal Plastics have called off the 12 per cent dividend for 2001-02 proposed by the board of directors at the 15th annual general meeting last week.
The company has said in a notice issued to the Bombay Stock Exchange that the "dividend of Rs 1.20 per share for the financial year 2000-01 as recommended by the board of directors has been called off by the shareholders unanimously".
A Nilkamal Plastics spokesperson, however, said that the initiative for cancellation of the dividend had come from the company management itself.
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"The company management felt that it is better that the dividend for the year be called off due to tough market conditions. The promoters of the company hold 57 per cent stake. In the event of a declaration of a dividend, they would have been the biggest beneficiaries," the spokesman said.
The Rs 280 crore Nilkamal Plastics is promoted by the Parekhs with Vamanraj V Parekh as managing director. The company had in the previous two years paid a 40 per cent dividend. The company is a major player in the manufacture of moulded plastics and crates. The spokesman said that shareholders at the meeting, however, approved a resolution approving the sale of the Sinnar unit of the company in Maharashtra. The operations at this unit have been discontinued due to depressed economic conditions. The manufacturing facilities have been relocated at other units and employees have been relocated.
The company has also decided to change the registered office of the company to union territory of Dadra and Nager Heavily from Maharashtra in view of this.
Nilkamal Plastics net dipped sharply to Rs 6.48 crore in 2000-01 from Rs 24.54 crore in 1999-00. The company's bottomline took a beating in the wake of rising costs coupled with sluggish market conditions. The company's raw material costs for 2000-01 was Rs 157.67 crore against Rs 116.59 crore in 1999-00.