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Kohinoor Mandal

Move to give management options to raise funds for expansion

Kolkata , Sept. 18

The board of directors of Birla Corporation Ltd, the flagship company of the Kolkata-based M.P. Birla Group, is raising its borrowing limit to over Rs 1,000 crore.

A special resolution has already been proposed by the board of directors for the shareholders' approval at the coming annual general meeting scheduled on Tuesday.

The resolution, once approved, would give the management several options to raise money for funding the future expansion activities of the company.

Birla Corporation, though primarily a cement company with 89 per cent of its revenue coming from this sector, also operates in jute, carbide and gases, PVC goods, auto trims and others.

Way back in 1985 the shareholders authorised the board to raise up to Rs 400 crore over and above its paid-up capital and free reserves, which was Rs 78.84 crore. As on March 31, 2006, Birla Corporation's capital base is Rs 77.01 crore and it has a reserve and surplus of Rs 307.23 crore.

"In view of the expanding activities of the company and various projects that the company may undertake to capitalise on any opportunity, it is proposed to increase the said borrowing limit to Rs 1,000 crore over and above the aggregate of the paid-up capital and free reserves as per the latest audited annual accounts," the directors explained.

To hike clinker output

In another development, the management of Birla Corporation is taking several steps to increase the clinker production at its plants but in phases. The projects once commissioned would help the company in reducing its fixed running costs.

Power plants of 27 MW capacity each has been installed at its cement units in Satna (Madhya Pradesh) and Chanderia (Rajasthan).

Meanwhile, the company's new unit - Durga Hitech Cement - built adjacent to its existing cement plant at Durgapur in West Bengal, was commissioned successfully in December 2005.

In the last fiscal, the total cement production increased to 5.15 million tonnes from 5.02 million tonnes. However, the dispute with NTPC Ltd for supply of fly-ash at the Rai Bareli cement division in Uttar Pradesh continues.

In the last financial year, 2005-06, Birla Corporation registered a 7 per cent growth in its turnover and ended at Rs 1,433.44 crore as against Rs 1,342.64 crore. Interest cost was reduced to Rs 13.62 crore from Rs 21.69 crore. Profit before tax jumped to Rs 144.09 crore from Rs 93.70 crore.

Birla Corporation is still trying to shift the operations of Soorah Jute Mill, located in centralKolkata, to its Birlapur location. According to the company officials, the move is being opposed by the trade unions and workers.

More Stories on : New Projects | Cement | Diversified

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