July 6, 1957

From the Chair The Indore Malwa United Mills Ltd Speech of the Chairman Shri Kudilal Govindram Seksaria

CFEECH delivered by the Chair­ At home, hardly a month back a crisis and India is no exception. man, Shri Kudilal Govindram the new Union Budget, probably Food problem causes the most Seksaria, at the 50th ordinary the most controversial one since alarming situation. The imbalance annual general meeting of the com­ independence, has been presented, of foreign exchange is another pany held on Monday, the 10th whose guiding star has been ob­ big hurdle. Absence of personnel June, 1957 at Seksaria Chambers, viously to find out the resources for the Management of public 139, Medows Street, Fort, Bom­ for the implementation of the Se­ sector is also a great handicap. bay—1. cond Five-Year Plan and as a re­ All these evidently persist to shat­ sult of which the popular impres­ ter our faith in the implementa­ Gentlemen, sion has gained ground that the tion of the Second Five-Year Plan Kaldor Report has become the I really consider it my privilege but surely that Is no reason why Bible of the Union Finance Mini­ to welcome you all here today to we should not march ahead. We stry. The Honourable Finance the FIFTIETH ANNUAL GENE­ have already gone half way on the Minister, Shri T. T. Krishnama- RAL MEETING OF THE COM­ road to economic progress and charl, has been metaphorically PANY, which is an auspicious occa­ there is no return without ruin. called a fisherman casting hissnet sion of the Golden Jubilee of your far and wide and in presenting The industrial core of the plan Company. The Directors' report and his bold and imaginative measures involving heavy burdens of steel, the annual accounts of the Com­ he has been frequently, accused coal transport and ancillary pow­ pany for the year ended 31st De­ of "killing the goose that lays the er should not be confused with cember, 1356 have been in your golden egg." But with such a arguments about the economy in hands for sometime and with your Herculean task before him, I Government expenditure or avoid­ permission I take them as read. sincerely believe none-else would ing waste and the like. I agree You are fully aware of the dy­ have fared better. that economies should be effected and probable waste avoided. Talk­ namic changes that your Com­ ing of waste which is apprehend­ pany has undergone during all The critics have termed the new ed to be maximum 10 to 15% in these years, and especially after Plan to be too ambitious and have the new plan, I may submit that my father, late Seth Govindram expressed their doubts about its it is not only rampant In public Seksaria took up the Managing success. It is feared to involve sector, but It is equally found in Agency of the Company. From many a danger and risk but in private sector also. You, I and all year to year your Company has this connection, I entirely agree others in private sector are fully gained strength so much so that with our worthy Prime Minister aware of it. And even If a great I would humbly venture to claim Nehru that all these have to be faced in the process of revitalising drive was made a few crores of that Us rich potentialities today the country. He seems to have rupees might be saved. But it make it not only a premier Textile well said, "it is only the dead that would not touch the basic question Unit of Indore or Madhya Pradesh, carry no risks". very much. The basic problem is but rather whole of India. that "big sums" have to be spent Since we met last, much water Not Plan Conscious on the steel plant and other in­ has flown under the bridge and dustrial undertakings. For this though It is not my intention to Both from expected and unex­ we require money and it can come enumerate the events at home or pected quarters the criticism has only through taxes or savings. abroad I must comment upon continued to be made that the Everyone in the country has to some of the worst Jolts that we Plan has been drawn up in an over share burdens and make sacrifices, all experienced in the pulse of the ambitious spirit and that it must and I on my part shall always be world economics. The temporary be revised In order to make the happy to accept my share and blockade of Suez not only created implied burdens less heavy for the perform my duties with no regrets a political chaos but it disrupted people. The one question which is or complaints. the economy of various countries being repeatedly asked is whether especially the Asian ones, includ­ the plan cost could not be cut to Undaunted Faith ing ours, which are so vitally suit the size of the resources Though I was born a capitalist, linked with its passage. This para­ cloth. Without indulging into eco­ I have always thought in terms lysis of the canal passage has nomic and political reasons, I of a Socialist. Somehow, or the spelt an unprecedented additional feel that the real crux of the pro­ other I am also naturally inclined coat to our Second Five-Year Plan blem is that our people are not to be optimistic in my views and and made the problem of foreign fully plan conscious today. True even with dark clouds over our exchange unfortunately more acute. it is that we face today certain heads today I have an undaunted But thanks, however to our Prime fundamental problems which dis­ faith in India's future. We have Minister by virtue of whose in­ hearten us and present a very been rendered materially poor In strument of Panchshtia. the boiled dark picture of our dreams, but the process of centuries of Slavery, waters have calmed down. the world itself is passing through but, I still consider India to be 896 July 6, 1957 rich in the great potentialities of last year, also there being no profits, however are higher than its vast natural resources and strikes or stoppages of work. The the previous year. After making gigantic manpower. Their ex­ ties between the Labour and provision for remuneration to ploitation are capable to overcome Management are bound to be fur­ whole time Directors and Selling any hurdles that might come in ther strengthened after their Agency Commission, depreciation its path of the socialistic goal of participation is available even in and taxation the nett profit the society I have myself pledged the Management of your Company. amounted to Rs. 8-89 lacs, as com­ to this goal and at any cost or pared with Rs. 7.53 lacs for 1955. Profits sacrifice shall continue to make The higher nett profit' insplte of Turning to the Profit and Loss my humble contribution in the decline in the gross profit is due Accounts, you will observe that achievement of the goal. to lower provision made for all despite the adverse factors, which the three counts namely agents' Changes in Management I shall presently mention, the commission, depreciation, and taxa­ gross profits of your company Coming to the affairs of your tion, the details of which are have been well maintained last Company, I wish to speak a few given in the Directors' Report and year, Although the gross profits wards about the revolutionary the accounts. The stocks of cloth had shot up to their peak heights changes that your Company has bales with your mills have con­ undergone last year. You are in 1955, a record set up since 1945, siderably increased which would aware that after resignation of they have very nominally receded be quite evident from the balance your Managing Agents the Board last year. The figures rose from sheet as at 3l-12-1856 showing delegated its power of Manage­ Rs 6.78 lacs in 1954 to Rs 27.93 them at about Rs 58 1/2 lacs ment to a committee of whole time lacs in the following year and Rs. from about Rs. 31 lacs as at 31-12- Directors. I cannot, however, on 24.02 lacs last year. The year 1956 1955. It was due to the upward this occasion of the Golden Jubi­ started with a cheerful and healthy revision in Excise duty with effect lee of the Company, miss the op­ atmosphere and there was also from 1st September' 1956, the portunity to pay my glowing tri­ almost a boom in the textile in­ Cloth market became weak and butes to your late Managing dustry for the first six months the factor coupled with acute Agents Messrs. Govindram Sek- so much so that looking to the all stringency in money market re­ saria, whose invaluable services round features of your mills and sulted in the poor offtake of cloth and contributions have rejuvenat­ steadiness of the textile industry, and consequently the mills had to ed the very life of your Company. your Directors were induced to carry larger stocks. It is due to them that our enter­ raise the ad-interim dividend to prise today occupies a premier 5% as compared with that of last Excise Burden position on the map of the Indian year's 3% thus making the total You are aware that your Mills Textile World. However, in de­ dividend up to 11% as compared are mostly manufacturing Coarse ference with the views of the Gov­ with 9% of the previous year. Had and Medium qualities, the excise ernment your Company abolished it not been for the additional ex­ duties of which have been increas­ the Managing Agency System and cise levied wth effect from 1st ed from one anna per sq. yard to apponted this committee of whole- September, 1956, I am sure, the an anna and a half and from one time Directors for which the Cen­ results would have been far bet­ anna to two annas respectively. tral Government has been duly ter than even the previous year As a result of this, your Company moved to accord its formal ap­ and a new record in profits would had to pay over Rs. 4.5 lacs dur­ proval. You will appreciate that be Inevitably set up. I hope, this ing the months of September to this has meant a substantial sav­ explanation and the enthusiasm December 1950- It is feared that ing to your Company in remune­ on the occasion of Golden Jubilee unless the demand and offtake of rations as compared to that paid of the Company will amply justify cloth both improve substantially to the Managing Agents. the increase in the dividend. By thus restoring the shattered con­ virtue of the timely distribution fidence Of the textile world, this A second step which all of you of the dividend, the latest changes burden of Excise duty and the will most welcome is in your Direc­ in the fiscal measures have coin- high prices of raw cotton may tell tors deciding to take up a Labour cidentiy proved beneficial to the heavily upon the result of the Director and Technical Director Company in so far as the dividend Company this year. on the Board of Directors, for factor is concerned. It has, also The Directors' Report has al­ which I am happy to inform you to some extent, reduced the inci­ ready dealt with all the detailed that necessary permission has al­ dence of new wealth tax on your particulars of the accounts and ready been obtained from the Cen­ Company. tral Grovernment to increase the they will give you a sufficiently clear picture of the financial posi­ maximum number of Directors A glance at the audited accounts tion of your Company. from seven to nine. I hope to for the year 1956 will show that have as my colleague a Labour the Company has made a nett pro­ Transport Director and a Technical Direc­ fit of Rs, 12,50,744-13 2, after pro­ Despite the disadvantages of an tor in the near future. This was viding sufficiently for depreciation up-country mill a salient feature also a step marching along with and development rebate. As I which particularly your Mill en­ the changing times and you will have stated before though the joys, is that saving in freight be proud that your Company has gross profits last year have re­ charges, which issue is becoming not lagged behind. ceded from Rs. 27.93 lacs in 1955 of growing Importance to your As usual, our relations with the to Rs. 24.02 lacs in comparison country as it exerts a consider­ Labour have been very cordial with the last year, yet the nett able influence on your competitive 897 July 6, 1957 THE ECONOMIC WEEKLY position In the market. The Mill Coming specifically to the problem memo" in the notice must have consumes roughly 40,000 bales of of Plant and Labour you will re- already made the purpose clear to Cotton in a year and almost all member^ I had drawn your pointed you. In the larger Interests of the 01 it is available locally, thus sav­ attention to this in my last year's Company I hope you will accord ing a lot of freight ' charges. speech. I am happy to Inform your sanction to it. The transport difficulty is another you that the progress in this On behalf of the Board and my­ serious bottleneck these days in direction is quite satisfactory in self, I should like to express my our national economy and the cost accordance with our plan. You thanks to all of you— the share­ of freight seems to be increasing are aware that the machinery of holders, Directors, to the manage­ everyday. As announced in the your undertaking dates to the ment, all Officers, Technicians latest Finance Bill, an increase of year 1907 and you all appreciate and employees both In the Mills 5% in the existing surcharge Is the gradual Investment made and at the Registered Office .and to be levied In the freight charges by your Directors to equip your the Company's selling agents for with effect from 1st July, 1957. Mills with the machinery requisite the co-operation and 'hard work But I am happy that your Mills to the needs of the time. "As you they have put in to bring out the will bear a lessor Impact on ac­ will see from the accounts .an most satisfactory results that are count of the reason mentioned. expenditure to the tune of Rs. 14 before us. Further, Indore is being connected lacs has already been incurred in by a broad gauge line with Ujjain, renovation, replacements and ad­ Gentlemen, I now beg to move: as a result of which also transport ditions of the machineries. Your "Resolved that the Directors' system will be more efficient and Directors contemplate to spend an report and Audited Statement of costs considerably reduced. equal amount this year also. accounts for the year ended the 31st December, 1956, already sent Rationalisation As intimated to you in the notice, to the Share-holders be and are hereby approved." There are certain points, how­ we would be transacting some ever, which have been disadvan­ special business in the, meeting, Note: This does not purport to be tageous to the growth of your which followed by the explanatory the proceedings of the meeting. Mills and which your Directors have had to face every now and then. Our labour per 1000 spindles and per 100 looms is considerably higher than the labour at Bombay or Ahmedabad, for which the logical remedy seems to be the rationalisation of muster. Your directors have taken steps to re­ duce the excess labour by a system of voluntary retrenchment of labour by payment of compen­ satory gratuity, which has already reduced the labour force consider­ ably. Your Mill is still running on coal and old type of steam engines, which not only increase your cost of fuel and power generation, but also affect us adversely In our programme of rapid modernisation of machinery. Off and on the elli- cleney and working of the Mills are handicapped on this account. The poor quality of coal and diffi­ culty of transport situation always keep Us in a very unsteady position. But I have now to give you a very good news in this respect. The Government of Madhya Pradesh has sanctioned a load of 1250 K. VV. Our hopes are further converged on the new Hydro Electric Plant which is a part of the chambal Project carried out in our area and on its completion during the course of next two years of time, your Mills may be totally running on electricity as most of textile units are doing.

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