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

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Recovery for Whom

'Recovery' for Whom? Hansavivek CENTRAL INDIA SPINNING is now on the road to recovery. The 1977 accounts show a reduced net loss of Rs 10 lakhs, as compared to Rs 48 lakhs of the previous year, following higher sales of Rs 19.38 crores against Rs 17.51 crores. The latest loss has been explained as the result of the statutory minimum bonus of Rs 31 lakhs for 1976 which had to be paid to employees. There has been an all- round improvement in operational efficiency and a progressive improvement in the product-mix, enabling the company to obtain better realisations for its cloth. The results would have still better, but for the further increase in cost of cotton and other inputs during the year. At the annual general meeting, the chairman Naval 11 Tata has sounded a note of confident optimism that the company would be able to show a "sizeable profit" this year. In view of the accumulated losses of Rs 1,67 crores, however, it looks the shareholders will have to wait for a few more years to expect a return on their investment, particularly because the cotton textile industry's fortune- fluctuate widely and sometime violently. One favourable factor for the company however is that it is exempted from the obligation to produce controlled cloth. Moreover, it is expecting to receive long-term concessional finance of Rs 3.5 crores from IDBI for modernisation and rehabilitation. With this loan, which would bear interest of only 7.5 per cent per annum, the mill would be substantially rehabilitated and would be able to produce cloth which has greater scope for higher profitability through sophisticated varieties in which alone lies the future of the cotton textile industry. To diversify its activities, the company is setting up a small paper project which is expected to go on stream soon. The company has been experiencing a tight liquidity position and has requested the financial institutions for a moratorium for payment of instalments and interest for two years. The request is being favourably considered, according to Tata.

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