ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Growth Sector

The Growth Sector Hansavivek GUEST KEEN WILLIAMS (GKW) is expanding and diversifying its activities. It has obtained a letter of intent' for setting up a project at Kanhe in a backward area of Maharashtra for manufacturing automotive press components of high sophistication. It is also proposing to put together a project to produce precision closed die steel forgings. The plant will be installed in close proximity to the customer base. Besides, the management is exploring several interesting possibilities and seeking investment options in the promising area of automotive components and custom built equipment The projects already on- the anvil involve an investment of around Rs 50 crore of which Rs 27.50 crore are proposed to be raised through internal generation and loans from financial institutions and Rs 22.50 crore by way of convertible debentures. It is intended to issue these debentures through prospectus with substantial preference allocation in favour of resident equity share holders. With completion of the process of converting debentures to shares, non-resident shareholding will come down from 59 per cent to 45 per cent. K B Lall, Chairman, has assured shareholders that the relative reduction in financial stake held by Guest Keen Nettlefolds does not reflect any diminution of interest on their part in GKW's future fortunes. In fact, the company has received wholehearted co-operation from them in working out the new projects it is now poised to launch. GKW has produced good working results for 1981 with a gross profit of Rs 15.82 crore against Rs 11.88 crore in the previous year following sales of Rs 152.13 crore against 122.89 crore. These figures also reflect improved margins. The satisfactory performance is attri buted, partly to higher volume attained in several areas, and partly to ability to compensate for rising costs through pricing actions. Net profit is Rs 6.67 crore compared to the previous year's Rs 4.12 crore. The directors have stepped dividend from 14 per cent to 16 per cent, which is covered 2.85 times against 2.02 times previously. They have also recommended issue of bonus shares in the proportion 1:3. Capital expenditure during the year amounted to Rs 4.56 crore, the major part of the outlay being on presses, captive generators, and replacement/ modernisation programmes for the various manufacturing units. The company's land and buildings have been revalued. The revaluation shows that net book value of the assets should be higher by Rs 14.52 crore. This has been incorporated in the balance sheet as at December 31, 1981, and the resultant surplus has been transferred to 'Property Revaluation Reserve'.

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