Six Of The Seven New Defence Companies Report Provisional Profits During First Six Months Of Business
New Delhi, April 29 (TNA) Six of the seven new defence companies, which were dedicated to the Nation on the occasion of Vijayadashmi on October 15, 2021, have reported provisional profits during the initial six months of their business, i.e., October 01, 2021 to March 31, 2022.
Except Yantra India Limited (YIL), all other companies - Munitions India Limited (MIL); Armoured Vehicles Nigam Limited (AVANI); Advanced Weapons and Equipment India Limited (AWE India); Troop Comforts Limited (TCL); India Optel Limited (IOL) and Gliders India Limited (GIL) have reported provisional profits. Below are the details:
The Government has taken various steps to initially handhold and support these new defence companies in starting their business as corporate entities. Outstanding indents with erstwhile OFB were grandfathered and converted into deemed contracts valuing about Rs 70,776 crore.
Against the targets for Financial Year 2021-22, Rs 7,765 crore were credited to the new defence companies as 60% mobilisation advance before the commencement of business date. An amount of Rs 2,765.95 crore has been released to the seven new companies during the current financial year for capital expenditure and equity.
With the functional and financial autonomy provided to these new corporate entities, coupled with handholding by the Government, a turnaround has been brought in the functioning of the Ordnance Factories. Within the first six months, these new companies have achieved the turnover of more than Rs 8,400 crore, which is significant considering the Value of Issue of erstwhile OFB during the previous financial years.
From the day one itself, these companies have started exploring new markets and expanding their business, including exports. Within a short time since their inception, these companies have been able to secure domestic contracts and export orders valuing more than Rs 3,000 crore and Rs 600 crore respectively.
These new entities have also initiated various measures towards optimal utilisation of their resources and cost reduction. With focused attention on cost reduction, these companies have been able to make cumulative savings of about 9.48% in the areas like overtime and non-production activities during the initial six months itself.
The performance of the new companies is being monitored regularly by the Department for timely interventions, if any, so that the objectives of corporatisation of OFB are fully met.
It may be recalled that the Government had, on June 16, 2021, taken a major decision to bring in a long-awaited and major reform in defence manufacturing by converting Ordnance Factory Board, a subordinate office of the Ministry of Defence, into seven Government-owned corporate entities with professional management.