Good Results despite Shortages

Good Results despite Shortages Hansavivek GARWARE NYLONS continues to grow and expand. It has applied to government for endorsement of its industrial licences for capacities, of nylon yarn at 5,218 tonnes per annum and of polyester filament yarn at 1,710 tonnes per annum, in terms of the government notification of April 21, 1982. The company has also received a 'letter of intent* for manufacture of nylon industrial yam/tyre cord with an annual capacity of 2,000 tonnes. It has finalised arrangements with Allied Corporation of US, a world leader of this product, for supply of technology/knowhow for the establishment of the proposed plant. To meet a part of the cost of this project, the company proposes to issue four lakh 13.5 per cent secured convertible debentures of Rs 200 each of an aggregate value of Rs 8 crore. It is proposed to allot five equity shares of Rs 10 each to fully redeem the convertible portion of Rs 50 of each debenture. The non-convertible part of Rs 150 per debenture will be redeemed at par in four equal instalments on expiry of the 7th, 8th, 9th and and 10th year. The company also proposes to issue 3.25 lakh 15 per cent non-convertible debentures of Rs 100 each of an aggregate value of Rs 3.25 crore on a 'rights' basis to the existing shareholders and holders of mortgage debentures and/or through prospectus to members of the public with a preferential offer to these categories of investors in the company. The proceeds of this issue will be utilised to. meet a part of long-term working capital requirement of the company and to finance a part of the cost of normal capital expenditure including the modernisation programme undertaken by the company. With continuous modernisation of its plants, production of both nylon and polyester yarns increased during 1981-82. Total production rose by over 21 per cent, from 4,271 tonnes to 5,196 tonnes. Sales expanded from Rs 34.10 crore to Rs 43.17 crore and, with margins enhanced, gross profit was up from Rs 6.08 crore to Rs 7.97 crore. Equity dividend, maintained at 17 per cent, was covered 3.74 times as against 2.74 times previously. The directors have also recommended a gift of shares on a one-for-two-basis. These good results have been achieved in spite of constraints on account of shortage of power, fuel, etc. The shareholding of the company in Garware Shipping has been reduced to 40 per cent following the public issue, and it has ceased to be a subsidiary.