ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Deep Sea to Offshore

Deep Sea to Offshore Hansavivek GREAT EASTERN SHIPPING (GES) completed the first phase of its diversification into the offshore arena. It has already obtained approval of shareholders for investment of Rs 90 lakh in 'Great Atwood' which will own and operate offshore rigs. GES will provide marine services to the proposed company, for which it will be remunerated. The main advantage, however, is that the company will learn the business in this new area. Another area which the management has identified for diversification is housing development. The Chairman, Vasant Sheth, assures shareholders that the management will be able to run a "clean and professional outfit in this area": He is of the view that the company should beef up its networth to over Rs 100 crore from Rs 50 crore at present to ensure stability and growth. This will mean approaching certain international investors, depending on the diversification that the company undertakes, and the balance to be raised from internal resources and from shareholders. Of the Rs 50 crore networth the company has, only Rs one crore has been subscribed in cash and the balance is through retained earnings. Earlier this year, the company approached shareholders to subscribe to Rs 12.78 crore worth of convertible bonds and the response was overwhelming.

A Mixed Performance

A Mixed Performance Hansavivek DCM has shown improved results for 1983-84 with a higher gross profit of Rs 17.23 crore against Rs 12.75 crore in the previous year, following an increase in turnover from Rs 431.96 crore to Rs 473.67 crore. These figures also reflect enhanced margins. The textile industry continues to be in a crisis situation. In spite of the constraints, three out of the five textile units of the company registered some improvement: Hindon River Mills, Delhi Cloth Mills and DCM Silk Mills. The Swatan- tra Bharat Mills unit was affected by continued labour disturbance and indiscipline, and, increased costs. A new company has been floated to which the unit is proposed to be transferred as a going concern so as to tackle its problems after approval of the financial institutions is obtained.

A Modest Performance

January 5, 1985 the production of consumer electronics to small firms seems totally misplaced, ignoring as it does the existence of significant scale economies in their production. From the social angle, it would have been better to undertake the production of consumer electronics in the public sector but on the right scale. Regardless of whether production is permitted in the public or private sector, once the scale factor is properly attended to, the problem of duplication of technology imported

Beyond Bread and Biscuits

Beyond Bread and Biscuits Hansavivek BR ITA NNIA INDUSTRIES has received a letter of intent from government which will allow it to set up a soya processing plant at Vidisha in MP on the terms that the management had requested. Work on site has started. When completed in 1986, the new soya business will serve to reduce imports of edible oils and proteins and will also earn foreign exchange from export of soya meal. The company is also planning to extend its exports of cashew and other nuts. Both these projects are expected to significantly increase the company's turnover and profits. The company's principal business is, and is likely long to remain, production of biscuits and bread. The government's present policies rely solely on the small scale sector for additional supplies in these areas. However, according to Chairman A R Pendry, the small business sector, seems likely to prove incapable of meeting the needs of the market. Many small scale units set up in recent past have become bankrupt and many are unable to maintain reasonable standards of hygiene. None seems able to create a varied range of products. Pendry looks forward to some relaxation of regulations which prevent Britannia from developing as the company's management believes it should.

Pioneer in Paper Research

Pioneer in Paper Research Hansavivek WEST COAST PAPER MILLS was the first major paper mill in India to invest in a Research Centre, which is recognised by the Department of Science and Technology, Government of India. This investment has been a significant factor in the high productivity of the mill, winning for it awards of the National Productivity Council for two successive years. The largest contribution of R and D has been in development of raw materials. The mill now uses new varieties of hardwood such as casuarine and non-traditional materials like mesta and bagasse for pulp. Recovery of pulp has also been enhanced with pioneering use of anthra- quinone, a pulping additive. Recently introduced high value coated papers use a coating formulation created by the mill's scientists and the result is a high quality product much prized in market. Other speciality products include paper for cheques. The research centre is currently studying alternative sources of energy from biowastes and reduction of environmental pollution besides on-going projects on saving The Week's Companies scarce raw materials, increasing pulp yield and improving productivity.

Diversification Obstructed

Diversification Obstructed Hansavivek GLAXO LABORATORIES (INDIA)'s efforts at diversification of its activities have met with obstacles. According to directors, onerous conditions regarding exports have been imposed by Central government in permitting association of company with Karnataka State Industrial Investment and Development Corporation in connection with a joint venture project for manufacture of products derived from maize starch. These conditions, directors feel, would render project non-viable. A representation has been made to government. Application for an industrial licence has received a negative response from government.

Hit by Imports

Hit by Imports Hansavivek J K SYNTHETICS has again turned out poor working results. Turnover for 15 months ended March 1984 has amounted to Rs 177.83 crore against Rs 171.83 crore in previous 12 months and gross profit is Rs 16.47 crore against Rs 13.48 crore. After depreciation, net profit is barely Rs 3 lakh compared to previous year's Rs 34 lakh. Dividend is maintained at 10 per cent on substantially enlarged capital and will be disbursed from past reserves. After taking into account write-backs from previous provisions for depreciation (Rs 288.59 lakh against nil), excess provision for taxation (Rs 400 lakh against nil), general development reserve (Rs 174.47 lakh against Rs 95.29 lakh), general reserve (nil against Rs 46.60 lakh) and investment allowance utilisation reserve (Rs 70 lakh against nil), a sum of Rs 626.23 lakh (nil) has been set aside for investment allowance reserve and Rs 285.70 lakh (Rs 176.11 lakh) for payment of recommended dividends on preference and equity shares. Surplus of Rs 24.25 lakh has been transferred to general reserve, which could The Week's Companies not get any amount last year.

Lower Sales, Higher Margin

Lower Sales, Higher Margin Hansavivek MODI INDUSTRIES has shown improved results for 1983-84 in spite of poor power supply position, demand recession and poor sales realisation. Gross profit amounted to Rs 3.26 crore against Rs 2.76 crore in previous year even though sales were slightly lower at Rs 89.17 crore against Rs 90.0 2 crore, reflecting enhancement of margins. With depreciation claiming more, however, net profit declined from Rs 135 lakh to Rs 76 lakh. Dividend has been slashed from 18 per cent to 10 per cent and is covered 3.27 times against 3.33 times previously. Directors say that working in current year is satisfactory and they expect better performance.

Maiden Dividend from GNFC

Maiden Dividend from GNFC Hansavivek GUJARAT NARMADA VALLEY FERTILISERS COMPANY (GNFC), has fared well during year ended June 1984 and has announced a maiden dividend of II per cent. Despite certain technical problems in ammonia plant and power failures/fluctuations, production of urea was 4,73,382 tonnes against 4,44,911 tonnes in previous year. Although capacity utilisation of plant was lower at 62.47 per cent against 69.44 per cent previously, management was able to achieve better profitability by effecting savings in consumption of certain raw materials and utilities. Sales of Narmada urea at 4,91,573 tonnes was 21.66 per cent higher compared to last year and those of liquid nitrogen at 7,23,552 tonnes were up 36.29 per cent higher. Company also undertook trading activity for super phosphate, imported pool urea, DAP and muriate of potash. Total sales of these fertilisers amounted to Rs 4.63 crore. Central government has appointed company as one of pool handling agencies to handle about 1.5 lakh tonnes of imported urea and DAP per The Week's Companies annum from Dahej port. This activity will commence shortly.

Beyond Tobacco

Beyond Tobacco Hansavivek ITC has completed a major portion of first phase modernisation programme aimed at introducing modern technology, upgrading plant and machinery and improving process and productivity in India Tobacco Division's Bangalore and Saharanpur factories and second phase covering other factories is being taken up. Division has maintained its volume during 1983-84 and improved its share in a declining market. Management expects current year would be better. Indian Leaf Tobacco Division remained profitable in spite of generally depressed market conditions in domestic and export markets, A breakthrough in export of non-cigarette type of tobaccos to Middle East and North African countries augurs well. Tobacco Board has arranged for crop now being purchased in Karnataka to be sold through auction system. This, according to management, will mean more remunerative prices for farmers for tobacco of right quality, which in long run should lead to improved quality and yields.

Joining the Car Chase

Joining the Car Chase Hansavivek PREMIER AUTOMOBILES expects to commence commercial production of its new car in a few months. Trial production has already begun and road tests are being conducted. Company has received government's approval for collaboration with Nissan Motor Company of Japan to manufacture its model A-l 2 engine with a matching gear box. New car will be equipped with this fuel-efficient engine and it will have a sleek and attractive body. Project outlay of Rs 28.50 crore has increased to Rs 36.60 crore due to overrun consequent upon steep increase in various items of expenditure. Company has approached financial institutions and banks for additional loans of Rs 6.25 crore to finance part of overrun. Company's application for increase in licensed capacity for cars under liberalised licensing has been approved by Central government. Its licensed capacity now stands at 28,600 cars per annum as against 18,000. Various modernisation schemes under- The Week's Companies taken by company are in progress.

Good Results in Trying Conditions

Good Results in Trying Conditions Hansavivek TATA OIL MILLS COMPANY (TOMCO) has turned in good results for 1983-84, although it was literally convulsed by one shock after another. Sales have amounted to Rs 135 crore against Rs 144 crore in previous year and gross profit has risen from Rs 6.04 crore to Rs 7.70 crore, reflecting enhancement of gross margins. With both depreciation and taxation requiring considerably more, however, net profit has turned out to be lower at Rs 2.28 crore (Rs 3.24 crore) with the result that unchanged dividend of 20 per cent is covered 1.69 times by earnings as against 2.44 times previously.


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