CCEA gives nod to Rs 182 crore grant for Heavy Engineering Corp

The government has approved a grant of Rs 182 crore to state-owned Heavy Engineering Corporation for meeting its capital gains tax liability.

"The Cabinet Committee on Economic Affairs (CCEA) today approved providing a grant of Rs 182.43 crore to Heavy Engineering Corporation Limited (HEC) for meeting the capital gains tax liability arising out of implementation of its revival package," Information and Broadcasting Minister Manish Tewari told reporters in Delhi on Friday.

The Ranchi-based company is engaged in manufacturing and supply of iron and steel castings, non-ferrous castings, steel plant equipment, mining equipment and structural items, which include coke oven, rolling mills and railway crankshafts, from its three operating units.

HEC, a sick firm at the time, was referred to the Board for Reconstruction of Public Sector Enterprises (BRPSE) and a revival plan was approved by the government in 2005.

"HEC has set an example of turnaround after the revival package was sanctioned by the government in December, 2005. The company, which could make profits only in the years 1975-76, 1976-77 and 1988-89 since its inception in 1958, has been making profits for the last five years consecutively and is growing at a good pace," an official statement said.

As a strategic measure, the public sector unit also undertakes consultancy and turnkey projects in areas of low temperature carbonisation plants, coal handling plants and coal washeries.

During 2011-12, the company registered a total income of Rs 715.69 crore, up from Rs 678.13 crore in the previous fiscal year.

Net profit of the company, however, declined to Rs 8.58 crore from Rs 38.14 crore during the review period. This was attributed to an increase in material and manpower cost.

As on March 31, 2012, it had 2,405 regular employees: 1,733 executives and 672 non-executives.