Financial Daily from THE HINDU group of publications
Tuesday, Dec 16, 2003
Financial Daily from THE HINDU group of publications Tuesday, Dec 16, 2003 |
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Corporate
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Performance WS Industries to set off losses against reserves M Ramesh
Chennai , Dec. 15 WS Industries, which makes porcelain insulators for electrical installations such as transmission towers and substations, will set off some of its accumulated losses against the general reserve. The company had earlier set up a subsidiary, WS Telesystems, to manufacture switches. The subsidiary's business did not take off because of a change in Government's policies. WS Industries had an exposure of Rs 20 crore to the subsidiary — money paid against corporate guarantees and trade advances. Also, as on March 31, 2003, the company had accumulated losses of about Rs 15.5 crore. It will set off the Rs 20 crore and Rs 8.5 crore of the accumulated losses, against the reserves. This will leave an amount of Rs 2.98 crore in the reserves. It will then be left with accumulated losses of Rs 6.87 crore. According to the Managing Director of WS Industries, Mr Murali Venkatraman, the profits to be made by the company in the current year will be enough to wipe off the Rs 6.87 crore too. The company's turnaround process began in 2000, with the selling off a part of its operations — manufacture of substation equipment such as transformers and lightening arrestors — which had been set up in the 1980s as a forward integration measure. The company got Rs 50 crore from the sale. About Rs 30 crore of this amount was used to retire some high cost debt, which resulted in an annual interest saving of Rs 10 crore. Another Rs 10 crore was spent on modernising the insulators plant. An "informal VRS" reduced the workforce by some 300 people, and brought down the wage bill to 12 per cent of sales, from 18 per cent. An energy conservation programme saved Rs 2 crore more.
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