Modi Alkalies

While sales recorded a jump of 24 per cent from Rs 125.15 crore to Rs 154.73 crore, profit at the net level fell from 10.18 crore to Rs 8.16 crore despite a sharp jump of 183 per cent in other income to Rs 2.44 crore.

The main reason for the drop was a sharp increase in raw material costs and interest burden. While raw material cost increased by 28 per cent, interest cost jumped by 62 per cent from 6.05 crore to Rs 9.83 crore. This could be on account of higher borrowing and higher credit days given to its customers. The average credit period extended to customers increased from 44 days in 1994-95 to 52 days in 1995-96. Besides, the company could not utilise its full capacity owing to severe power cuts.The power tariff has also increased by 23 paise per unit.

Apart from this, if one were to take a look at the auditor's qualifications, the company has not provided interest liability of Rs 1.24 crore. As a result of this, profits for the year are higher by Rs 20 lakh.

As far as the current year is concerned, one cannot expect any dramatic change in the current year as there has been no sign of improvement in the industry.

Besides, Rajastan State Electricity Board has also increased provisional fuel surcharge by 26 paise per unit. This should cost around Rs 7 crore to the company in 1996-97.