Praj Cuts Payout To 12 Per Cent

Praj Industries has decided to substantially slash its dividend declared earlier by its board from 20 per cent to 12 per cent for 1997-98. The company said that the move was forced by a complete halt in business coming in from south-east Asian countries where it has a very exposure of around 40 per cent of total revenues. Simultaneously, the management as agesture of sacrifice, has announced a 10 per cent cut in salaries and perks of all the whole time directors of the company.

A resolution to amend the dividend from 20 per cent to 12 per cent was passed at the company's annual general meeting held here yesterday. "The decision to cut the dividend will enable us to conserve our resources and face the slowdown in the brewery and distillery projects business," said Pramod Chaudhari, chairman and managing director of Praj Industries, while defending the measure. Chaudhari said the dislocation of its export markets in south-east Asia, particularly in Thailand, Philippines, and Indonesia had compelled the company to embark on the tough measure.

 

Praj Industries had set-up an arm called Praj Far East Pte in Singapore with a 63 per cent stake, while the balance is with a Chinese partner. The Singapore arm has not been able to get any orders due to the economic crisis which began in July 1997.

"We have recorded a 50 per cent drop in sales for the first five-month period ended August 1998 as compared to our targeted sales," he said, without giving any figures. To overcome the problems faced in Asia, Praj has now decided to focus on Africa and south and central America. It has already bagged an export order worth $ 50,000 from Kenya for the supply of distillery equipment.

For the current year, it has an order book position of Rs 45 crore. Out of this, Rs 20 crore worth of orders are likely to be delayed as finances are yet to crystallise. Addressing the AGM, Chaudhari told the shareholders, "We are tightening our expenditure, working capital and free cash flow in line with the current levels of operation."