JUGGILAL KAMLAPAT COTTONS SPG. & WVG. MILLS CO. LTD. OBJECTS & ACTIVITIES: Manufacture of textile goods, rayon yarn and electronic equipments. The company runs a textile mill, a rayon unit including a sulphuric acid plant, a carbon-di-sulphide plant, a sodium sulphate plant and an electronics factory. COTTON TEXTILES: In 1980-81, working results were adversely eaffected by continued rise in costs all round, power cuts and depressed market conditions. In 1982, the textile industry continued to pass through a difficult period. In addition, labour unrest during the first few months of the year adversely affected the working of the company. In spite of these adverse factors, working results were better than the prerious year. In 1983, the results were better than the working of this division waas affected due to serve demand recession, rise n the prices of inputs, power failures and stiff competition from the uunorganised power loom sector. In 1984, despite the adverse conditions continuing, the working was satisfactory. The company continuing, the working was satisfactory. The company tackled recession by pursuing a policy of modernisation and diversification. In 1985, the working showed further improvement. Durisng 1986, production declined but turnover was maintained almost at the previous year's level. A higher turnover could not be achieved because of the rise in cost of production consequent upon the rise in input costs, electicity tariff, etc. During 1987, the working results were adversely affected by an incrase in cost of inputs, wage bill and disturbances in power supply. Recurring droughts and floods in one part of the cuntry or the other caused severe depression in the market. In 1988-89 (15 months), the working was adversely affected due to liquidity constraints, rise in the prices of inputs and stiff competition from unorganised sector. Cancellation of the much awaited Pandey award by the Industrial Tribunals led to labour indiscipline, forcing the company to declare a lock-out in the mills with effect from 15th May, 1989. The Government of Uttar Pradesh banned the lock-out by a notification. A writ petition filed by the Company challenging the ban orders was pending before the High Court at Allahabad. However, the matter was referred to informal arbitration of the chief minister of Uttar Pradesh. During 1989- 90, since the mill operated only for a period of one and a half months, the working resulted in heavy losses. The Company exported fabrics valued at Rs. 8.33 lakhs. In 1980, 24 semi-automic looms, 16 Lakshmi-ruti automatic weaving machines and 21 NMM super spinners were installed to replace the old conventional looms and ring frames. In 1981, a sum of Rs. 191.53 lakhs was spent on the installation of new plant and machinery such as Laxmi-Ruti automatic weaving machines, NMM super spinners, flat bed screen printing machine, automatic pirn winders, humidification plant, etc. During 1983, the Company incurred a capital expenditure of rs. 222.64 lakhs on installation of latest machinery and equipment like Laxmi-ruti automatic weaving machines, Cimmco looms, better fuel-efficient boilers, super speed warping machine, auto coner, etc. In 1984, a sum of Rs. 289 lakhs was spent on capital assets. The Company also undertook a modernisation programme costing Rs. 10.88 crores envisaging installation of imported Sulzer weaving machines and other auxiliary machines. During 1985, this scheme was substantially implemented. Financial institutions sanctioned term loans of Rs. 8 crores for this project and the balance of Rs. 2.88 crores was being met from internal sources. During 1986, the second phase of modernisation was completed. To finance the third phase of modernisation of the textile unit, financial institutions sanctioned foreing currency loans equivalent to Rs. 6.81 crores and rupee term loans of Rs. 11.13 crores. The scheme envisaged installation of Sulzer and Nissan air jet weaving mahcines, additional spindles and other auxillary indigenous machinery. The total estimated project cost of Rs. 24.24 crores was proposed to be met partly by loans from financial institutions and partly by internal resources and issue of further capital. During 1987, the Company took up the IIIrd phase of modernisation programme, under which 24 Nos. of Sulzer Airjet weaving machines were imported and commissioned. 12 nos. more of the same types o machines were under trial runs. 36nos. Nissan Airjet weaving machines were under clearance and these were expected to be installed during 1988. Foriegn currency loans equivalent to Rs. 375.73 lakhs and rupee loans of Rs. 350.00 lakhs were disbursed by financial institutions on this IIIrd phase of modernisation. RAYON UNIT: The factory under the name and style of "J.K. Rayon" having a rayon plant with a capacity of 5 tonnes viscose rayon yarn per day with continuous process, together with a sulphuric acid plant and a carbon-di- sulphide plant with a capacity of 25 tonnes and 5 tonnes per day respectively, was put into operation in August, 1959. With effect from 1st March, 1975, excise duty was further raised by 40% which again could not be passed on to the consumers. Power supply was totally stopped by the State Electircity Board on and from 4th March, 1975. In addition, due to non-cooperative attitude of the workmen, production suffered heavily both in quantity as well as in quality. As a result the rayon unit remained closed from 4th March, 1975 to 30th September, 1975. In order to make this unit an economic and viable undertaking, it was given on licence to J.K. Synthetics Ltd., for a period of 5 years with effect from 1st October, 1975. This licence agreement was renewed for a further period of 3 years with effect from 1st October, 1980. J.K. Synthetics, Ltd., terminated the licence agreement with effect from 16th May, 1983. Hence, the Company closed down its rayon unit and surrendered the relevant industrial licence. In 1984, this unit continued to be closed and in the hold of the workmen. During 1985, the dispute with the workmen of the rayon unit was settled and their dues were being paid in terms of the settlement. During 1986, the unit was closed, and the licence surrendered. Most of the plant and machinery was disposed of during the period between 1st January, 1987 to 31st March, 1989. J.K. ELECTRONICS: In, 1967, the Company undertook the implementation of a television project in the name of "J.K. Electronics" at Kanpur. Trial operations were started in the beginning of November 1968. This television sets were produced in January 1969. In 1976, the depression in the demand for T.V. sets during the first quarter resulted in heavy accumulation of stocks. Though there was revival in demand after the grant of relief in excise duty from the benefits as the excise duty relier was confined to T.V. sets of the value upto Rs. 1,800 per unit only. The Company therefore had to reduce the prices substantially with consequent heavy losses. The position further deteriorated since the close of the year due to sluggish demand. After considerable examination of the economics of the unit, it was found that this unit had lost its viability. It was, therefore, decided to close down the unit. In 1983 and 1984, a few T.V. sets were produced and all components left in stock used. During 1986, the unit was closed and the licence was surrendered. NEW PROJECT: During the 1986, the company entered into agreements with the Pradeshiya Industrial and Investment Corporation of U.P. Ltd. (PICUP) for undertaking a photo film project at a total cost f Rs. 225 crores and a project for the manufacture of polyester blended fabrics at a cost of Rs. 35 crores. In 1987, the Company disassociated itself as main co-promoter with M/s. J.K. Synthetics Ltd. only when sufficient funds were at its disposal. During 1989-90, the joint sector agreements entered into with PICUP for implementation of the textile projects were terminated. AMALGAMATION OF J.K. MANUFACTURERE, LTD.: The High Court of Allahabad by its orders dated 19th May, 1988 sanction amalgated J.K. Manufactures, Ltd., with the company with effect from 1st January, 1986. In terms of the scheme of amaligamation, shareholders of J.K. Manufacturers, Ltd. were alloted the following shares of the Company: (1) 4,720 - 8.5% cumulative redeemable preference shares of Rs. 100 each to the holders 6% cumulative spreference shares in proportion 1:1 and (2) 7,840 equity shares of Rs. 10 each to the equity shareholders in the proporation 1:25. The 4,720 - 8.5% cumulative redeemable preference shares thus issued were to be redeemed during 31-12- 1991/95 at 3 months, notice. REDEMPTION OF PREFERENCE CAPITAL: The Company has the option to redeem the redeemable Preference shares, in whole or in part, at par at any time or times after the expiry of 10 years, but not later than 15 years from the respective dates of allotment by giving not less than six months' notice (first allotment made on 3rd June, 1960). SICK INDUSTRIAL COMPANIES (SP. PROVISIONS) ACT, 1985: During 1989-90, the Company made a reference to the Board for Industrial and Financial Reconstruction (BIFR) under section 15(1) of the above mentioned act. FINANCE: In 1980, financial institutions sanctioned soft loans aggregating Rs. 232 lakhs for modernisation and renovation of the plant and machinery of the Company's cotton textile unit. During1985, the following foreign currency loans were sanctioned for the modernisation scheme: Sw.Fr.2.756 million (about Rs. 100 lakhs) by ICICI. IFCI in participation with IDBI and ICICI also sanctioned a rupee term loan of Rs. 366 lakhs. DEBENTURES: During 1985, the Company issued 1,25,000 - 15% non-convertible debentures of Rs. 100 each for Rs. 125 lakhs. REVALUATION OF ASSETS: The Company revalued the land buildings, plant and machinery of its textile unit as on 1st January, 195. The net surplus of Rs. 15.66 crores arising out of this was credited to capital reserves. GENERAL: As at 31st March, 1990, sums of Rs. 1,435.88 lakhs and Rs. 1,135.61 lakhs were outstanding against Rupee terms loans and Foreign currency term loans respectively from financial institutions. The preference dividends amounting to Rs. 5,16,760 were in arrears for the period from 1st January, 1986 to 31st March, 1992.