Established in 1972 by the Union government to produce assistive devices for persons with disabilities, Kanpur-based Artificial Limbs Manufacturing Corporation of India (Alimco), in its more than 42 years, had faced multiple challenges, including turning sick. G Narayan Rao, who took over as chairman and managing director in 2011, in an email interview with N Madhav speaks about the initiatives that revived the company and how it rose to the status of Schedule C Mini Ratna category-II. Edited excerpts
What issues according to you were resulting in the weakening of finances?
Alimco was incorporated as Section 25 Company under the provisions of the Companies Act, 1956, with the objective of not for profit organisation. While its main objective is to serve the persons with disabilities (PwDs), who are almost 2.3 per cent of India's population, it was established with a meagre authorised share capital of Rs 3 crore, out of which only Rs 1.965 crore had been paid up. Subsequently, the corporation was funded with around Rs 24 crore over its entire period in the form of modernisation grant, and another Rs 22 crore in the form of interest-bearing loan. However, we have been approaching the Ministry of Social Welfare, Justice and Empowerment (MoSJE) to waive the total interest element and convert the same into equity immediately. The proposal is still pending with the Union government. If approved, the company's financial position would improve substantially.
What is Alimco's accumulated debt and the monthly interest payments?
The accumulated total interest on the interest-bearing loan is Rs 50 crore, which is not payable to any promoter and hence we have requested the government for its waiver and conversion into equity.
What is the annual financial assistance from the Union government?
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The corporation does not receive any financial assistance other than in the form of grant-in-aid to the extent of value of assistive devices distributed under the government's Assistance to Disabled Persons (ADIP) scheme. The dependency of working on government sponsored scheme ADIP, which in the ratio of 90:10 per cent in 2011, has now been brought down to 55:45. We are expecting this to be 50:50 in the current financial year. We manufacture 35 categories of ISI products, ranging into 355 variants, for PwDs and children with special needs (CWSN) under the ADIP-Sarva Siksha Abhiyan (SSA) scheme.
How crucial was the survival of Alimco?
Alimco is the only ray of hope to persons with disabilities from the economically weaker sections. As per the statistics available, Alimco covers 60-70% of eligible PwDs in the country. Even the Ministry of Social Justice and Empowerment has formed a separate department of Disability of Affairs (DD) in July 2012, and is being headed by a secretary and joint secretary. We're reaching out to individuals with orthopaedics, visual, hearing and intellectual impairments and disabilities, spread across 640 districts and 5,500 blocks in the country.
How has been the performance of Alimco since 2011?
From May 2011, Alimco showed an annual growth of 54 per cent in business through a mix of execution of pending orders, accepting new orders among others. This led to accumulation of general reserve of Rs 62.03 crore and to create a networth of Rs 63.99 crore as on March 31, 2013. Hence, we are now cash rich, self sustaining. The growth achieved by Alimco in the last three financial years happened without engaging or taking any help from any consultant.
Will Alimco be able to sustain the turnaround?
It has to. Gone are the days of pain. To sustain the transition, we are working out a modernisation plan keeping in view the next 20 years.
Any plans to drive into new business?
With the new Companies Bill, we are exploring the demand for our devices from companies under the corporate social responsibility (CSR) spending allocations. The management of Oil and Natural Gas Corporation (ONGC) has recognised Alimco as it CSR implementation partner pan-India. There are plans to introduce new products, new technologies, new processes, improvement in quality of products and services, technological collaborations, forming JVs. Also, plans are to explore exports.