From The Tribune, Chandigarh 19 August 1998

Jay Engineering to end losses

NEW DELHI, Aug 18 (PTI) — The Jay Engineering Works Ltd, part of Siddharth Shriram group, expects to wipe out its accumulated losses and come out of the purview of the BIFR in the next 12 to 18 months.

“Infusion of fresh funds by the promoters and financial institutions along with re-location of its production facility, and cost cutting measures will help the company wipe out its accumulated losses,” Chairman of the company Siddharth Shriram told newspersons here today.

The company’s accumulated losses as on March 31, 1998 stood at Rs 77 crore as against Rs 85 crore reported in the previous year.

As part of rehabilitation and revival scheme proposed by the BIFR, Rs 33 crore would be brought in by the Siel Ltd, promoter of the company, Rs 15.5 crore by financial institutions and Rs 30 crore by selling land in West Bengal.

The company plans to develop and invest in its fans business, tool lines and paint shops in the coming years. It has also shifted its fan and sewing factories to a single location to reduce cost.
“We have shifted sewing and fans factory to Gurgaon in July this year and the impact of it would be visible in the next quarter,” Shriram said.

The group plans to invest Rs 25 crore in developing its existing factories as well as building marketing infrastructure of Usha International, another group company, Siddharth Shriram said.

Usha International markets the products of Jay Engineering under the “Usha” brand owned by it.

Siel has already brought in, as part of the rehabilitation scheme proposed by BIFR, Rs 18 crore by subscribing to 1.1 crore shares of Rs 10 each at par aggregating Rs 11 crore and seven lakh 10 per cent redeemable preference shares of Rs 100 aggregating Rs 7 crore in January this year.

After the infusion of the money, Jay Engineering has become a subsidiary of Siel Ltd.

On future plans for the company, Shriram said, “our thrust would be the small appliances and we are expecting an annual growth rate of 25 per cent.”

Jay Engineering had reported a net loss of Rs 95 lakh in the first quarter of the current year compared to Rs 2.30 crore during the similar period last year.

The company had reported a net profit of Rs 7.64 crore on sales of Rs 158 crore compared to a loss of Rs 21.85 crore in 1996-97 on sales of Rs 149 crore.