Rising Costs Yet Expanding

Rising 'Costs', Yet Expanding Hansavivek ANDHRA PRADESH PAVER has re- ceived letter of intent' for expansion by 15,000 tonnes per annum under the 'crash programme'. Applications to the financial institutions for foreign exchange and rupee loans are being submitted. With a substantial increase in production, from 36,907 tonnes to 51,179 tonnes, following installation of balancing equipment, net sales advanced 48 per cent to Rs 9.60 crores and gross profit turned out to be two-and-a-half fold at Rs 2.01 crores. Of this, Rs 1.53 crores were provided for arrears of depreciation for the two years ended June 1970. Depreciation amounting to Rs 1 crore for the latest completed year has not been provided for. There are also arrears of dividend on cumulative preference 1 shares of about Rs 42 lakhs. The profit figures have been arrived at after providing for sole selling agents' and selling agents' commission of Rs 13 lakhs (Rs 9 lakhs). G D Somani, a director, is interested in one of the sole selling agents, Sanjay and Company, as his relatives are partners in that firm. Placid of Calcutta and Thakkar and Company of Bombay arc also sole selling agents. Somani and Company Private is the proprietor of the latter firm. It is stated that none of the directors has any interest in the resolution, proposing certain variations in their agents' territories. The company is seeking additional forest ranges from the state government to augment the supply of raw materials as owing to flowering in some of the forest ranges the .supply of bamboo has depleted. A nursery for fast growing species of wood has been set up by the company. The company complains that there has been continuous increase in the cost of raw materials, chemicals, coal, and stores. Also, power tariff rose from Rs 400 to Rs 525 KVA.