P R E S S R E L E A S E

 
FALCON GROWS 26%, IMBIBES SUMITOMO TECHNOLOGY RECOMMENDS 30% DIVIDEND

 
Kolkata, 28 June 2007: For 2006-07 Falcon Tyres Ltd, a Ruia Group company, has recorded a growth of 25.8% in its income registering a turnover of Rs 321.78 crore against Rs 255.63 crore in 2005-06. The operating profit of the Company went up by 30% to Rs 12.52 crore in 06-07 from Rs 9.58 crore in 05-06 while its Net Profit has risen to Rs 3.96 crore in 06-07 from Rs 3.62 crore in 05-06. In a meeting held in Kolkata on 27 June the board of directors of Falcon Tyres recommended a dividend of 30% to its shareholders after taking the accounts on record. Last year Falcon Tyres, listed with BSE and other stock exchanges, had paid 25% dividend to its shareholders.

It may be recalled that Falcon Tyres Ltd, an ISO 9001 certified manufacturer of tyres for two and three wheeler vehicles, was acquired by the Ruia Group in December 2005 from the Jumbo Group. Since then an investment programme of Rs 70 crore is being implemented toward introduction of state-of-the-art technology and augmentation of capacity at its Mysore plant. By the end of the 2nd quarter of FY 07-08, Falcon is slated to produce 7.5 lakh tyres a month from the current level of 6 lakh tyres a month.

Commenting on the results, Ruia Group Chairman Mr Pawan Kumar Ruia said: “Falcon is in the process of broadening its product range. The Company has already signed a Technical Aid Agreement with Sumitomo Rubber Industries of Japan for providing technical know-how for two-wheeler tyres. The agreement encompasses total gamut of product upgradation, process improvement, introduction of tubeless and other hi-tech tyres.” Mr Ruia however expressed concern at the sluggish growth of demand from the two-wheeler manufacturing sector and said: “The Company will have to shift its focus gradually from the OEMs to the replacement segment.” He also expressed concern at the steep increase of interest cost, which he said had adversely affected the bottomline of the Company.

For any further clarifications, feel free to contact Mr D Nandi [98310 56023]