ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Escorts Collaborating for Tractors

Escorts Collaborating for Tractors Hansavivek ESCORTS' 1969 results show a 36 per cent expansion in turnover at Rs 28.74 crores, followed by 28 per cent rise in gross profit at Rs 2,87 crores. The diminution of margins was attributed to tractors, whose sales it was mainly that accounted for the increase in total turnover but which yielded a low margin of profit due to "delay in the revision of Government notified sale prices". Net profit was Rs 1.13 crores, against Rs one crore, to cover the maintained dividend of 13 per cent, part of which is expected to be exempt from tax, 3,5 times. Net return on total funds employed came to 8.1 per cent. Bonus shares issued on a one-for-four basis te commemorate the silver jubilee year will rank for dividend from the current year. Subject to Government consent, the company also proposes to issue 1:5 "rights" at a premium of Rs four per share to raise additional capital for investment in Escorts Tractors, a subsidiary formed in collaboration with Ford Motor of the US for the manufacture of tractors. Commercial production of the scooter, developed entirely in its own research and development shops, is to be undertaken this year The international division has established new markets for many additional items and, as an export house, Escorts continues to assist small manufacturer to sell their products abroad. Production of shock absorbers and gear boxes is to be expanded to meet the increasing demand. The subsidiary, Goetz (India), earned a higher profit and declared a 20 per cent dividend. The other subsidiary, Escorts Transmissions, also showed better performance and reduced its accumulated deficit. Anticipating a glut of tractors in the market, the company is increasing sales and service facilities. II P Nanda, president, observes in his annual review that over a score of manufacturing collaborations have been approved or an. under consideration of Government to establish an annual production capacity exceeding 1,50,000 tractors in the country which, he says, is "much higher" than the demand anticipated both by the Planning Commission and industry. Practically every State and almost all the Stale agro-industrial corporations, he points out, are interested in the manufacture of tractors and are negotiating with various foreign manufacturers for technical collaboration always commencing with imports of duty-free, completely built-up tractors He apprehends this policy might lead to unhealthy inter-State competition with each State according preferential treatment in the levy of sales-tax on tractors manufactured within its own State, thus indirectly interfering with the free, inter-State movement of tractors. Yet Nanda welcomes de-licensing of many industries, new liberal licensing policies, defined guidelines for foreign collaborations and establishment of foreign investment board, though he feels they would be more purposeful if the decisions on proposals submitted to Government are made without loss of time. Commenting on the present Government functioning, he observes it tends to give one the impression that even if an intelligent, objective officer took prompt decisions, he would probably be hauled up for ''ulterior motives" and asked to explain his "promptness". Citing an example, he adds that he as well as some of the company's other executives have to spend considerable time calling on officials for "movement of our files on one issue or the other" and that in many cases the decisions cannot be got in time.

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