Higher Profits despite Breaks

Higher Profits despite Breaks Hansavivek RAYMOND WOOLLEN has shown satisfactory results for the 15 months ended March 1977, with higher sales and profits. However, the pace of the latter slackened as reflected in contraction of gross margins. Dividend has been stepped up three points to 15 per cent, which is payable on the capital enlarged by a one-for-four bonus issue and is still covered 2.5 times by earnings. Operations in all the three manufacturing divisions of the company were relatively stable throughout the period, but labour unrest has erupted in the current year. The clothings division subsidiary has remained completely closed for nearly three months. This disrupted export deliveries of readymades. The wool-combing division has been partially closed, and there has been continued unrest in the engineers7 files division. Besides, the directors feel that the additional burdens, imposed by the 1977-78 Budget through increased customs duties on imports of raw wool and polyester fibre and increase in excise duty on mixed won, is bound to affect the company's margins via increasing consumer resistance and greater competition iron) other sectors going in increasingly for the manufacture of synthetic blended suiting fabrics. The company has made good progress with its modernisation and expansion schemes. The third modernisation programme for the woollen mills division, involving installation of 12 new Sulzer weaving machines and other imported equipment for re-combing, weaving preparatory, and dyeing and finishing departments has been substantially implemented Under the 4,800 worsted spindles expansion scheme, 4,400 spin dies have been completed. The company is considering schemes for further modernisation, including balancing equipment in the wool-combing divi sion, and additional equipment in the worsted spinning, weaving, and finish- ing departments. The engineers' files division has got an industrial licence for stepping up capacity from 6.15 lakh dozen to 13.84 lakh dozen. Part of the expanded capacity is being set up in Ratnagiri, which is a notified 'backward' area of Maharashtra. The new undertaking is expected to commence regular production by the close of the current financial year. The company has also been trying to further diversify. The management proposed to have a separate cotton textile unit for manufacture of mixed synthetic yarns, but it has not been successful so far. Efforts, however, continue to be made. The company has been carrying on research and development in synthetic indigo dyes which have a vast potential in world markets, but progress here has been slow. Its proposal for setting up a project for manufacture of Portland cement in MP, may be granted approval by the government, subject to certain conditions. Since it is a fairly large-sized project, the