The city-based cable manufacturing company, Incab Industries, created history on December 31, 1997. After a lapse of over four years, the company organised a combined AGM on December 31 for finalising its annual reports for fiscal 1993-94, 1994-95, 1995-96 and 1996-97.
Under the management of the erstwhile promoter, K Tapuriah, the company was in danger of being declared sick. Consequently, the shareholders of the company voted Tapuriah out of the Incab board and decided to let the position remain vacant for the time being.
In December, 1996 Incab was taken over by Leader Universal Holdings Berhad of Malaysia and its executive chairman Dato Seri HNg Bok San was nominated chairman of the company, while the NRI promoter, P K Saraf , backed by the Malaysian company, was appointed vice chairman and managing director of Incab.
Both together hold 59 per cent stake in the company, with FIs holding 17-18 per cent, the public 12-15 per cent and eight per cent remaining with Tapuriah.
These restructuring measures have been taken with a view to bringing back the company to health. Since 1992-93, the company started registering losses. The net loss recorded by the company was Rs 34.5 crore. The following year, losses stood at Rs 20.3 crore.
However, according to the terms of a memoranda of understanding (MoU) entered into on December 4, 1996, with the Malaysian company, Saraf and financial institutions (ICICI and ANZ Grindlays Bank), an outstanding amount of Rs 10.23 crore had been written back. This helped the company show a net loss of Rs 10.05 crore in the accounts. By virtue of the conditions of the MoU, the company was able to reduce its net losses in the subsequent years as well.
According to the conditions stipulated in the MoU, the annual reports of 1993-94, 1994-95, 1995-96 and 1996-97 have been prepared on a going concern basis.
It appears from the annual accounts that the revival of the company would be a difficult job. From 1993-94 to 1995-96, the company succeeded in reducing operating losses. However, in 1996-97 operating loss increased by a whopping 171 per cent. Interest burden also rose by nearly 97 per cent during the same year. Again writing off Rs 16.97 crore by FIs helped the company record an all-time low loss.
Its sales turnover has increased in recent years. The present chairman and the managing director hope that since the company has doubled cable production, it can win back old customers like the Railways, Otis and Hindustan Aeronautics, who started importing specialised cables due to lack of suppliers.
Incab Industries is also going in for an extensive modernisation programme and more than doubling its capacity for XLPE cables. The capacity for its jelly-filled cables is also being increased from the current five lakh CKM per year to ten lakh CKM. For this the company is planning to go in for a collaboration with a foreign cable maker without equity participation. It is also planning to enter the international copper trading business through the London Metal Exchange.
In the first seven months of the current fiscal, Incab achieved a gross turnover of Rs 70 crore and expects to touch Rs 100 crore at the end of the current fiscal. It hopes to achieve a turnover of Rs 200 crore by 2000. - BS Research Bureau
