Shortages No Bar

Hansavivek KOTHARI (MADRAS) has shown creditable performance despite shortages of essential inputs and other constraints. While sales have risen by 31.3 per cent from Rs 31.44 crore to Rs 41.29 crore, gross profit has more than doubled to Rs 6,23 crore from previous year's Rs 2.84 crore reflecting substantial enhancement of margins. Net profit is Rs 3.67 crore (Rs 1.22 crore). Dividend, which was raised by 3 points last year, has been further stepped up 5 points to 20 per cent and is covered 3.89 times against 1.67 times previously. What is more, the current year holds out promise of still better performance. Unlike most of the captains of industry, D C Kothari, chairman, has made a clear forecast of the current year's performance in his annual statement circulated to the shareholders. He has projected total turnover of Rs 51 crore (Rs 44.08 crore) and profit before tax at Rs 4.80 crore (Rs 4.07 crore). He further says that the company is ex pected to be in a 'no tax' position for this year also, provision being necessary only for agricultural income-tax of about Rs 60 lakh. Basically a stockbroker who has been taking care of investors' interest for a long time, Kothari has this message for shareholders: "With various alternative investment opportunities where you can improve the value of your investment, it is becoming important these days to continue to get you a better return for your money and to ensure greater growth and capital appreciation for your investments. In keeping with the current management concepts, we are paying greater importance to both short and long range Corporate Planning so that your funds are effectively and profitably deployed in investment opportunities, in socially desirable production activities, while ensuring your interests." Reviewing the performance of various units, Kothari says that the textile division's working the year was very satisfactory, in keeping with that of the industry as a whole. The 1976 multi- fibre policy halted the recessionary trends faced by the industry during the previous year but its dilution through intermittent increases in import and excise duties causes concern TO the industry as their high cost prohibits the use of viscose and polynosic fibres as substitutes for cotton. The Rs 3-crore modernisation programme is in progress. Over 75 per cent of the modernisation has been completed and the balance will be completed by the first quarter of 1981. The plantations division did not fare well. The tea industry was affected by appreciable surplus flowing into the world market from non-traditional sources like China and Turkey. The company's estates increased their yield per hectare from 2,287 to 2,305 kgs. The coffee market also suffered from prolonged depression in world market prices, The drop in price was approximately Rs 6,000 per tonne. The company has taken steps to increase the curing capacity to 12,000 tonnes from 8,000 tonnes at an additional cost of Rs 12 lakh. The fertilisers division The Week's Companies (Rs Lakhs)