ORKAY INDUSTRIES LIMITED
The Directors present the 26th Annual Report of the Company to be read
together with the Audited Balance Sheet as at March 31, 1995 and the Profit
and Loss Account for the year ended on that date.
Rs 2,40,00,000 (period ended March 31, 1994 Rs 3,60,00,000) has been
transferred from accumulated profit in General Reserve to this account.
The Sales and other income for the year ended March 31, 1995 were much
higher at Rs 311,61,17,064 than the sales for the earlier 18 months period
which on an annualised basis works out to at Rs 269,10,57,471. The gross
profit has increased from Rs 29,56,00,774 (on an annualised basis) to Rs.
32,59,71,057 for the year under report and the net profit has increased
from Rs 8,27,45,283 (on an annualised basis) to Rs 12,55,06,963.
The Company along with its subsidiaries have started a new activity of
dealing in Time-Share related Debentures and expect returns on it which
would be better than the present returns in their existing businesses.
The Directors are pleased to recommend a dividend of 11 % (subject to the
deduction of tax at source) amounting in aggregate to Rs 10,94,85,600 as
against Rs 11,25,16,880 for the earlier period, subject to approval by the
shareholders at the ensuing Annual General Meeting, payable to those
shareholders whose names appear on the Register of Members on the record
date, to be paid out of the profits for the year.
The Company has made further progress to date, and has implemented a
substantial portion of its expansion project. Partial commercial production
has already commenced in the month of March 1995, as can be seen from the
increase in the installed capacities. Commercial production has
progressively increased from the month of April 95 to date. Full commercial
production is expected to be achieved shortly.
UTILISATION OF THE PROCEEDS OF THE ISSUE OF 14% (TAXABLE) SECURED,
REDEEMABLE, NON-CONVERTIBLE DEBENTURES:
The Company has utilised the funds of Rs 32 crores received by issue of
32,00,000 - 14% (Taxable) Secured, Redeemable, Non-Convertible Debentures
of the face value of Rs 100/- each, for working capital and repayment of
foreign currency loan instalments in respect of modernisation programme.
In terms of the guidelines for the protection of the interest of the
Debentureholders, the Company has further transferred Rs 240 lacs out of
accumulated profits in General Reserve to Debenture Redemption Reserve
As on March 31,1995, 263 depositors had not claimed their matured deposits
amounting to Rs. 10.30 lacs. Since then, an amount of Rs 2.40 lacs in
respect of 48 depositors has been claimed and repaid and/or renewed. As of
date, all deposit claims made have been met, except unclaimed amounting to
Rs. 7.90 lacs. Deposits of Rs 31.85 lacs are maturing during the current
The Company has complied with the provisions of Section 58-A of the
Companies Act, 1956.
In compliance with the provisions of Section 212 of the Companies Act,
1956, Audited Statement of Accounts along with Directors' Report of the
other subsidiaries of the Company for the year ended March 31, 1995 are
placed on record.
As regards the various comments on the accounts by the Auditors in their
Report, your Directors have to state as under:
As regards to para 2(d) (i) of the Auditors Report, Note No. 12 of Schedule
14 forming part of Balance Sheet is self explanatory.
M/s H.N. Mehta & Co., Chartered Accountants, the retiring auditors, are
eligible for reappointment. M/s H.N. Mehta & Co., under Section 224(1) of
the Companies Act, 1956 have furnished a certificate of their eligibility
for reappointment. The members are requested to appoint Auditors for the
current year and authorise the Board of Directors to fix their
In terms of the provisions of the Companies Act, 1956 and the Articles of
Association of the Company:
Shri Kapal R Mehra;
Shri Jitendra R Mehra;
Shri Pankaj K Mehra; and
Shri P.V Mehta
retire by rotation and being eligible offer themselves for re-election.
All properties and insurable interests of the Company, including building,
plant & machinery and stocks wherever necessary and to the extent required,
have been adequately insured.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS & OUTGO:
Information pursuant to Section 217(1)(e) of the Companies Act, 1956, read
with Rule 2 of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, is placed on record and forms a part of
PARTICULARS OF EMPLOYEES:
In compliance which the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 a
statement giving the requisite. information is placed on record and forms
a part of this Report.
SPORTS AND WELFARE:
As in the earlier years, the Company continues to encourage sports and
support welfare activities for the development of human resources.
Industrial relations at the Company's plants at Saki Naka Andheri, M.I.D.C
Marol and M.I.D.C. Patalganga, continued to be cordial.
The Board places on record its deep and sincere appreciation of the
services of the workers, staff and the executives of the Company. The Board
also wishes to convey its thanks to the Company's esteemed members,
debenture and fixed deposit holders, customers, Banks, Financial
Institutions, State and Central Governments for their continued support.
ANNEXURE TO DIRECTORS' REPORT
INFORMATION UNDER SECTION 217 (1)(e) OF THE COMPANIES ACT, 1956 READ WITH
THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE
YEAR ENDED MARCH 31, 1995.
A. CONSERVATION OF ENERGY:
The Company has consistently attached great deal of importance to energy
conservation not only to cut down production costs but also as a part of
its responsibility to society.
The task force constituted for this purpose continues to be involved in the
energy conservation activities. As reported previously the task force
consists of highly qualified and motivated technical personnel. They are
aware of the latest trends in this field and adopt them wherever possible.
Following actions have been implemented:
Substantial saving in high pressure steam was achieved by segregating high
pressure steam consumption points and low pressure steam consumption points
by laying separate supply lines.
The above action was further reinforced by sealing all the leaks with
Suitable cladding was installed in flange joints in order to ensure that
they would be leak free for long duration.
Introduction of new type of air driers to ensure lower consumption of
Regular maintenance of electrical equipment and proper distribution of
Laying of direct piping from supplier's plant to Company's collection point
thereby reducing transit and transfer losses.
Substantial energy saving was achieved by procuring energy efficient
centrifugal chillers for the recent expansion. A direct result of this
action was reduction in energy consumption from 1.4 KWH to 0.6 KWH per ton
of refrigeration. This huge saving is not merely one time benefit, but will
accrue to the Company on an ongoing basis.
Total energy consumption per prescribed Form `A' is as under:
(See rule 2)
Particulars with respect to conservation of energy (consolidated for all
(A) Power and fuel consumption
Current year Previous period
Units (KWH) 4,84,01,363 6,42,80,162
Total amount (Rs.) 13,82,61,808 16,00,56,103
Rate/unit (Rs.) 2.86 2.49
(b) Own generation
(i) Through diesel generator.
Units (KWH) 64,850 1128,000
Units per litre of diesel oil (KWH) 3.40 4.00
Cost/unit (Rs.) 2.27 2.00
(ii) Through steam turbine/generator
Units (KWH) NIL NIL
Units per litre of NIL NIL
Cost/unit (Rs.) NIL NIL
Quantity (Tonnes) NIL NIL
Total cost (Rs.) NIL NIL
Average rate (Rs.) NIL NIL
3. Furnace Oil
Quantity (K. ltrs.) 4,685 6,591
Total amount (Rs.) 2,58,83,600 3,58,19,901
Average rate (Rs.) 5,525 5,435
4. Others/Internal generation
Quantity (M.T.) 49,010 NIL
Total coaI (Rs.) 2,98,650 NIL
Rate/unit (Rs.) 6,093 NIL
(B) Consumption per unit of production:
Unit of Polyester
Item Measurement chips
Current yr. Previous
Electricity KWH 434 345
Furnace oil/LSHS Litres 268 314
Item Polyester Fabrics
Current Yr. Previous Current Yr. Previous
Electricity 2,537 2,624 0.63 0.56
Furnace oil/LSHS -- -- 0.38 0.36
1. Unit of production for polyester chips and polyester yarn is Metric
Tonne and for fabrics is metres.
2. Consumption figures are for the product mix in all the categories.
3. The above figures indicate only the direct consumption of power and fuel
and exclude consumption of power and fuel in the supporting utilities of
B. TECHNOLOGY ABSORPTION:
(See rule 2)
Disclosure of particulars with respect to Technology Absorption (to the
Research & Development (R & D):
1. Specific areas in which R & D carried out by the Company and benefits
derived as a result thereof:
a) To improve the dye-pick characteristic a special grade polyester was
developed modifying its polymer structure. This polyester can be dyed with
cationic dyes which are more cost effective. This yarn was processed
through texturising and fabric making and its properties were found to be
acceptable in market.
b) Existing grade polyester yarn has been improved by process parameters,
optimisation to an extent that high texturising speeds with very low
breakage rates are now possible.
2. Expenditure on R D:
R & D is a continuous process and the expenses incurred thereon have not
been segregated and accounted for separately. Hence it is not possible to
give the same in the required format.
Technology absorption, adaptation and innovation:
1. The technology of polymer production has been fully absorbed and adapted
to our needs. The process has been optimised to improve the polymer quality
for running it on high speed texturising machines, for reducing breakage
level, to improve whiteness percentage etc. The above has been achieved
within the frame-work of existing costs, with the result that our yarn is
competitive in the international market.
2. In spinning, machine modifications were carried out to improve the
subsequent process of yarn texturising. These have also improved the
productivity by reducing the down-time and controlling the waste percent.
3. During the last 5 years, no technology has been imported.
C. FOREIGN EXCHANGE EARNINGS &. OUTGO:
Earnings in foreign exchange on exports at F.O.B. value Rs.3,34,11,075/-
Foreign exchange outgo on account of import of raw materials, components
and spare parts and other items, amounts to Rs 3,53,10,587/-
During the year ended March 31, 1995 the Company has exported polyester
yarn and fabrics worth Rs.6,46,79,145/-. The Company is confident of
achieving a significant turnover from the Export Oriented Unit with
commensurate profits which would contribute greatly towards the overall
profitability of the Company.
BY ORDER OF THE BOARD OF DIRECTORS
KAPAL R. MEHRA
Dated: 1st September, 1995.