8/10/2019 Bombay Dyeing1

1/1

T H E E C O N O M I C W E E K L Y

Bombay DyeingBO MB AY DY KI NG maintained i t s

premier position in the export ofcotton textiles by accounting fornearly 12 per cent of textile exportsin 1960. In keeping with its pastpolicy, the company is doing its utmost to maintain its position inoverseas marke ts by di ve rs if yin gproduction and improving the quality of goods. During I960, it exported 60 million yards as comparedwith 63 million yards in 1959 but theforeign exchange earned was higherat Rs 6.25 cror es against Rs 5.65crores. This was only partly due tobetter prices realised in exportmarkets. A more important reason

was the increase in the proportionof finished goods exported from 38per cent to 50 per cent. This wasmade possible by larger output inthe new bleach works.

The compan y spent Rs 168 lakhson the installation of new machineryand nearly Rs 10 lakhs on construction of new buildi ngs. In addit ion,it increased inventory by Rs 216lakhs. The additions to fixed assetsconsisted. amo ng other thi ngs , ofblow room machinery, new ring

frames and 168 automatic looms.Including the orders placed foradditional automatic looms, the company will shortly have 1971 auto-matic looms, lt has also placedorders for combers and ancillarymachinery, a variety of finishingequipment and also a 12-colourautomatic printing plant. Theseadditions w i l l enable Bombay Dyeingto manufacture a wider range andvariety of fabrics, particularly thoserequiring special types of finishingand processing.

The high level of investment hasborne fruit in improvement of salesfrom Rs 10 crores to Rs 11 crores.Net earn ings have gone up f r o mRs 30 lakhs to Rs 50 lakhs, thankspartly to heavy development rebate,which has made the tax burdenquite nominal. The profits for 1960represent 5 per cent on capital invested, 8 per cent on net worth and20 per cent on equity capital.Though reserves far exceed thediare capital, the chairman has re ject ed the idea of a bo nu s issue .The company is continuing with itsplans of renovation and re-organisa-ion, though the major part of its

modernisation programme has now

been comp lete d. It has entered intoan agreement with the Indian subsidiary of a Swiss firm for a comprehensive survey to improve layoutand to suggest economies and improvements in the process of manufacture.

Sen-Raleigh

IN spite of difficultie s of fi nd in gforeign exchange for plant, Sen-

Raleigh has been able to f u l f i l l thetarget of installed capacity for bicycles and components, Unfortunately, it has not been possible toutilise the capacity of this plantfully owing to non-availability ofsufficient raw material. The demandfor bicycles has far outstripped thecompany's production. According tothe Chairman. Shri Abhijit Sen, thisposition may not continue for longin the case of one or two compo-nents since the licensing of industrial capacity for these items hasbeen "more liberal than wise". ShriSen deplores the fact that the bicycle industry- has still to rely onimports of steel and only in the pastyear has a start been made in increasing the indigenous production ofitems such as cold rolled strips,mild steel cutting bars and mi I'dsteel wires. Licences given for import from East European countriescould not be utilised because thesecountries had made no provision intheir 7-year plans for supply of steelto India. The prospects of securingraw material from the US underDLE loan arr ange ment s ar e. however, bright.

Sales during the year ended September 30, I960 fetched Rs 356lakhs and earned a gross profitmargin of 11 per cent. The net profitof slightly more than Rs 21 lakhsrepresents 7 per cent on capital investment. 17 per cent on net worthand Rs 3.1 1 per eq uit y share. Industrial licences have been received forsubstantial expansion of chainmanufacture and production ofdynamo lamps. Import licences forthe chain expansion project havealready been received and plant isbeing ordered. The company proposes to di ver si fy its interest in li ght

engineering and has applied for alicence to manufacture electric houseservice meters. It is also continuingits effort to improve export performance,

April 15, 1961

Shri Sen has complained thatplans for future expansion areclouded at present due to the severeshortage of power and water at

Asansol. the civic facilities of whichhave not kept pace at all with thegrowth in its importance as an industrial area.

Associated Battery

THE leadi ng produc ers of batteries. Associated Ba tter y Maker s

(Ea ste rn) suffered a decline of 9 percent in sales tur nov er du ri ng theyear ended Augu st 31 , 1960. Accordi ng to the dir ecto rs, t he sales figureof Rs 206 lakhs is not discouragingin view of the considerable progressmade in the com ple tio n of indigenous manuf actu re of articles wh ic hprev iousl y had to be imp ort ed.The issue of 4.80,000 shares to thepubli c in I ndia at a pr em iu m ofRs 5 per share was a great success.Prior to the new issue, the reservesof the comp any alre ady exceededthe pai d-u p share cap ita l. No w ther e s e r ve am ou n t t o Rs 89 l akhsagainst the share capital of Rs 118lakhs . Sales du ri ng 1959-60 earneda gross profit margin of 27 per cent.

Net profit of Rs 28 lakhs represents17 per cent on net wo r th andRs 3.63 per equity share.

The entire share capital of Chlori de and Exide Batte ry ( Eastern )was acqu ired du ri ng the year. Salesof the sub sid iar y are sho wn atRs 203 lakhs. How mu ch of theserepresent transactions between theholding and subsidiary company is.however, not known.

623

Company Notes