The net profit of Swil Ltd in the last financial year was 228 per cent below the projections as given out in the letter of offer pertaining to the companys rights issue of Rs 59 crore in April 1996, the appraisal of which was made by ICICI.
The Satya group companys net profit in 1996-97 was Rs 2.86 crore against the projected figure of Rs 9.40 crore. The net profit of the company also declined 60 per cent from Rs 7.22 crore in the previous year.
The projected result could not be achieved mainly due to steep increase in cost of inputs, borrowings and on account of recessionary conditions prevailing in paper industry, according to the companys last years annual report.
Total income, which was projected to be Rs 195 crore, was recorded at Rs 184 crore, a decline of 6 per cent, while earning per share was Rs 3.46 against a projected figure of Rs 12.74.
During the year the company registered an income of Rs 187.86 crore against Rs 200.54 crore in 1995-96. The company has initiated remedial measures such as reduction of cost through improved productivity, human resources management, optimal equipment utilisation, improved management of working capital and reduction of administrative expenses.
There has been a cost escalation in the companys copper project in Gujarat from Rs 464 crore to Rs 595 crore.
This has been mainly due to the inclusion of a captive power plant, addition of few new equipment, foreign exchange fluctuation and increase in pre-operative expenses. The financial institutions have approved the enhanced project cost of the company. According to the annual report, the project is scheduled to be completed in April 1998.
Swil has also planned to come out with a public issue and a rights issue in the second half of the current year to raise a sum of Rs 115.60 crore which includes Rs 9.10 crore to be raised by way of preferential allotment to foreign collaborators.
The company is installing certain balancing plant and equipment for its synthetic division. Besides, it has acquired one HP 200 loom and necessary seaming machines to augment its production.
