MRINAL DYEING AND MFG. CO. LIMITED
Your Directors have pleasure in presenting the 7th Annual Report together
with Audited Accounts of the Company for the Financial year ended 31st
Your Directors are pleased to recommend a dividend of 5% for the year ended
31st July, 1995. The dividend, if approved by the members at the Annual
General Meeting, will be paid, subject to deduction of tax at source as per
the provisions of the Income Tax Act, 1961.
The Corporate Philosophy to achieve over and above projections backed by
total quality management has made the Company to reach the phenomenal
heights during this year. The Company, during the year under review has
shown significant increase in both profitability and turnover. The turnover
shot up from Rs. 17.73 crores (in 1993- 94) to Rs. 51.78 crores, thereby
recording a growth of 199% while the profit after tax increased from Rs.
1.57 crores (in 1993-94) to Rs. 7.44 crores, the rate of increase being
A Comparative analysis of the Company's Projected and Actual Performance is
as given below :-
(Rs. in Lakhs)
Actual Performance Projections for
for the year 1994-95 1994-95 (as per Prospectus
1. Sales & Other
Income 5184.71 2829.02
2. Net Profit
tax) 744.16 324.84
3. Earnings per
Share (Rs.) 7.00 3.05*
4. Dividend (%) 5 20
The operations in 1994-95 indicate a substantial improvement over 1993-94.
However since beginning of the financial year 1995-96 Company has faced
problems due to very harsh liquidity crunch. The contributing factors for
such a situation being, inability of the Company to raise adequate working
capital funds from banking system due to difficult liquidity position of
the banks. This compelled the Company to resort to short term debt at
prohibitively high cost. This was compounded due to efforts made by the
Company since August, 1995 to increase market share despite adverse
selling conditions by extending longer credit to customers. This led to
high level of sundry debtors thereby worsening the situation. Most
unfortunately the Company could not prevent the default in meeting its
liabilities of ICDs & accepted bills and consequently certain litigations
in this respect, are instituted against the Company. The Board anticipates
to overcome these problems successfully.
Under such circumstances the Company requires large funds to augment the
working capital & thereby reach the planned targets. Therefore, the Board
proposes to come out with an issue of Optionally Fully Convertible
Debentures (OFCDs), very shortly. Keeping all these in view the Board of
Directors has reconsidered (as its meeting held on 12/03/96) its earlier
decision of dividend (at its meeting held on 30/10/95) and decided dividend
to 5% (instead 20%) on its equity in the best interests of the Company.
Accordingly the excess provision for dividend is transferred back to Profit
& Loss A/c.
During the half year ended 31st January, 1996 the performance of the
Company despite strenuous conditions, was satisfactory. In the said period
the turnover of the Company was Rs. 48.82 Crores and the profit after tax
was Rs. 1.52 Crores.
If everything materialise as projected, your Directors are confident that
the desired targets at the horizon may be achieved. be achieved.
EXPANSION & DIVERSIFICATION PROGRAMMES
The Company, has successfully carried out the expansion programme and
expanded its dyeing & cone winding capacities to 3000 t.p.a. Considering
the increase in demand for its products, the Company will need to depend
upon contract manufacturing from other small units in and around Vapi. But
as a long term exercise, the Company is planning to acquire a plot of land
near Vapi and is considering to relocate all its manufacturing facilities
there, as there is little scope for implementing the desired substantial
expansion plans at the existing locations. This would require an estimated
investment to the tune of Rs. 30 Crores. At the end of this exercise, the
Company will have a dyeing & cone winding capacity of 6000 t.p.a.
As a measure of horizontal diversification, the Company is seeking to
implement its project of integrated knitting & garmenting. The negotiations
are in progress with the importers in Europe / North America for a firm
buyback arrangements of the quality knitwear to be manufactured by the
Company. The critical machineries for this project will be imported. This
will ensure that the products will have the quality which is so very
essential the international markets.
With the installation of sophisticated quality control devices, at dyeing
unit at Vapi, the Company anticipates to match the international quality
demands in the export market of dyed synthetic yarns. Your Company to
inform you that it has exported a few consignments on trial to various
buyers in Europe and the same have passed the rigorous quality standards
laid down by these buyers. Your Company can look forward to an increased
volume of business in the export market.
As a result of this expansion cum horizontal diversification, the Company
is confident of achieving a turnover in excess of Rs. 200 Crores by the
turn of the Century and attain a prominent place on the world textile map.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 217 (i) (e) of the
Companies Act, 1956, read with the Companies (Disclosure of particulars in
the Report of Board of Directors) Rules 1988, regarding conservation of
energy, Technology absorption and Foreign exchange earnings and outgo is
given in the Annexure.
Shri Madhav G. Pradhan, resigned from the Board on 26th February, 1996 due
to old age & health problems. The directors place on record their sincere
appreciation for valuable services rendered by him during the tenure of his
association with the Company. Shri Nishantraj Nahata & Shri Sudhakar S.
Kasture retire by rotation, and being eligible offer themselves for
All the properties and insurable interest of the Company including
Building, Plant & Machineries and Stocks wherever necessary have been
adequately insured to the extent required.
There were no overdues or unclaimed deposits outstanding as on 31st July,
1995 and the Company has complied with all the requirements prescribed by
the Companies (Acceptance of Deposits) Rules, 1975 as amended.
In the subsequent period one fixed deposit has matured, the Company has
repaid major amount and requested the depositor to allow some time to repay
the balance in due course.
PARTICULARS OF EMPLOYEES
The Company has not appropriate any person who:
i) If employed throughout the financial year, was in receipt of
remuneration for that year which, in the aggregate, was not less than
Rupees Three Lacs, or
ii) If employed for a part of the financial year, was in receipt of
remuneration for any part of that year, at the rate which, in the
aggregate, was not less than Rupees Twenty Five Thousand per month, or
iii) If employed throughout the financial year or part thereof, was in
receipt of remuneration in that year which, in the aggregate, in or as the
case may be, at a rate which, in the aggregate, in excess of that drawn by
the Managing Director or Whole Time Director or Manager and holds by
himself or alongwith this suppose and dependent children, not less than two
percent, of the equity shares of the Company.
Hence particulars of remuneration under Section 217(2A) of the Companies
Act, 1956 and Companies (Particulars of Employees) Rules, 1975 are not
applicable to the Company.
AUDITORS & OTHER REPORT
The Company's Auditors M/s. N.K. Jalan & Co., Chartered Accountants who
retire at the conclusion of the Annual General Meeting are eligible for
reappointment. The Company has received certificate from them to the
effect that their appointment if made, would be within the prescribed
limits under Section 224(1B) of the Companies Act, 1956.
The observations in the Auditor's Report are dealt with in the notes at the
appropriate places and the notes are self explanatory.
Your Directors acknowledge with gratitude and wish to place on record their
appreciation for the support and co-operation received by the Company from
Bank of Baroda, I.D.B.I., G.I.I.C., Customers, Suppliers and Employees at
all levels for their contribution to the Company's successful operations
and look forward to their continued support.
ANNEXURE TO THE DIRECTORS' REPORT
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AS REQUIRED UNDER COMPANIES (DISCLOSURE OF
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING
PART OF THE REPORT OF THE BOARD OF DIRECTORS FOR THE YEAR ENDED 31ST JULY,
A. CONSERVATION OF ENERGY
The Company has adopted various measures to conserve energy and thereby
achieved reduction in the cost of Production. The Company's own Technical
staff have identified further areas of energy reduction and based on their
recommendations the Company has engaged the services of professionals, who
are experts in energy/fuel oil conservation in Yarn Dyeing plants. Details
regarding the present energy consumption including captive generation are
furnished in Annexure Form 'A' as per the requirements of the Companies
(Disclosure of particulars in the report of Board of Directors) Rules,
(A) Power and Fuel Consumption
Current Year Previous Year
Units 9,41,068 5,32,678
Total Amounts (Rs.) 19,14,411 10,07,808
Rate/Units Rs. 2.03 1.89
b) Own Generation
i) Through Diesel Generator Units 8,32,236 NIL
Unit per Ltr. of Diesel Oil 1.92 NIL
Cost/Unit (Rs.) 4.29 NIL
ii) Through steam turbine/Generator NIL NIL
2. Coal NIL NIL
3. Furnace Oil
i) Quantity (K. Ltrs.) 3,37,203 1,73,180
ii) Total Amount (Rs.) 18,34,384 9,42,413
iii) Average Rate (Rs.) 5.44 5.44
4. Other/Internal generation NIL NIL
(B) Consumption per Kilogram production
Current Year Previous Year
Production: Dyed Yarn
Electricity (Units) 0.65 0.64
Furnace Oil (K. Ltrs.) 0.13 0.21
Coal NIL NIL
Others NIL NIL
B. TECHNOLOGY ABSORPTION
FORM - B
1. Research and Development (R & D)
i) Specific Areas in which R & D carried out by the Company.
a) Study of process Parameters.
b) Studies and experiments and reduction of wastage of yarn through better
handling of raw material and doffing system.
c) Hoseknitting and dyeing of polyester yarn for controlling shade
d) Development of Centrifugal System for Yarn Drying which reduces cost of
drying by about 75%
e) Development of many new shades suitable for domestic as well as export
f) Use of Cotton Hose on dye springs which reduces bottom waste.
g) Development of Collapsible Plastic Tubes for export of Soft Package
Polyester Yarn suitable for high quality dyed yarn.
ii) Benefits derived as a result of above R & D
a) Quality Upgradation
b) Cost reduction
c) Energy Savings
iii) Future Plan of action
Continuous efforts to improve quality and reduce cost.
iv) Expenditure on R & D
R & D has been done on continuous basis in various departments and the cost
of Research & Development remain merged with the various heads.
2. Technology Absorption, Adaptation and Innovation.
i) Efforts made towards technology absorption, adaptation and Innovation
and benefits derived as a result thereof:
a) The Company's own Technical Staff has experimented and studied
Centrifugal Technology which results in saving of power to the extent of
b) The Company experimented new winding Technology which reduce cost of
winding to the extent of 10%.
ii) Details of Imported Technology : Not applicable.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings Rs. 15.64 Lakhs
Foreign Exchange Outgo Rs. 9.42 Lakhs
For and on behalf of the Board of Directors
Chairman & Managing Director
Place : Bombay
Date : 12th March, 1996.