The McKinsey recommendations entail the company undertaking a comprehensive study of the business processes and make recommendations for improving operations. These are expected to significanly improve operations and profitability.

Announcing this at the company's annual general meeting (AGM) on Wednesday, chairman Harsh Goenka said: "The company has also achieved an important breakthrough in securing a project valued at $167 miilion from the Madhya Pradesh Electricity Board," he added.

Goenka also hinted at a gradual closure of its Kurla plant. He said: "There is nothing at the Kurla unit now. The company introduced a voluntary retirement scheme (VRS) for the employees at Kurla whichreceived overwhelming response with more than 90 per cent of the employees opting for it.

"Now there are just 14 employees at the unit and the fate of 76 others at the unit have to be decided by the Mumbai high court," he added. The fate of these employees hangs in balance after they moved court following their decision to back out after accepting the VRS.

Clarifying doubts raised by shareholders on the merger of RPG Transmission with KEC International, Goenka said, "During the year a proposal to merge RPG Tranmsision with the company in the ratio of 85 shares of the company for every 100 shares held in RPG Transmission was approved by shareholders.

"The matter is, at present, pending before the high courts of Mumbai and Delhi for the final order. The merger would be effective from April 1, 1997 and accordingly audited accounts for the merged company will be prepared after receipt of final aproval and competion of formalities, he added.

KEC has already merged the management structure of KEC and RPGTransmission ahead of the merger of the two companies, based on McKinsey's recommendations.

The company has recorded a significant growth in its order book position which has touched Rs 2,140 crore as on March 31, 1998, from Rs 903 crore as on March 31, 1997.

The company achieved a gross revenue of Rs 715 crore against Rs 662 crore during the year, recording a growth of 8 per cent. However, the profit after tax stood at Rs 23.85 crore from Rs 38.55 crore recorded last year due to competitive pressures on prices and increase in interest charges. Goenka said, "The financial position of the company would have been better but for the long delays in receipt of some major orders from Syria, Abu Dhabi and Indonesia."