The Hindu Business Line : Lotus Chocolate to be referred to BIFR

LOTUS Chocolate Company Ltd (LCCL), the confectionary company acquired by a group of Indian entrepreneurs from the Singapore-based Network Foods International Ltd last year, has recorded complete erosion of its networth and turned sick.

According to the information provided by the company to the stock exchanges, its accumulated losses of Rs 2.53 crore have exceeded its networth of Rs 2.41 crore as per the annual accounts for the period ended December 31, 2003.

After assessing the financial position, the Lotus board has decided to make a reference to the Board for Industrial and Financial Reconstruction (BIFR) so as to decide the rehabilitation measures to revive the company.

In a communiqué to shareholders for convening an annual general meeting, the new management said it has, on its part, made concerted efforts to implement various strategies and policy measures that were recommended by the board from time to time.

However, notwithstanding these efforts, the company suffered networth erosion owing to several factors that were beyond its control, the management informed the shareholders. These factors include erosion of working capital funds due to operational losses, non-availability of bank support limits and high interest burden.

According to the management, the company was able to revive business associations with major FMCGs for the supply of industrial chocolates and cocoa powder towards the end of the year. "Export of one container to Nigeria and one container of cocoa butter to the US were another significant achievement during the year."

According to the LCCL Director, Mr P. Shivaramakrishna, the transitional phase of the company due to the takeover by the new management towards the end of last year had given the company a new lease of life. "The company could regain the confidence of its customers in the industrial range and restarted its chocolate distribution under its own supervision and control."

The management has informed the shareholders that the main focus of the company this year would be to strengthen the market share of the industrial products by recapturing the lost market, retaining the existing customers by ensuring quality and prompt service and expanding the presence of its industrial products to the entire nation.

More Stories on : Sick Units | Dairy & Dairy Products

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