Shaw Wallace & Co has reported improved operating profits at Rs 80 crore for the 12-month period ending June 30, 1997. However, owing to a huge interest burden of inter-corporate deposits, the company posted a modest net profit of Rs 36 lakh which is almost 7 times more than the meagre Rs 5 lakh clocked the previous year.
Total turnover of the company for 1996-97 was Rs 696.12 crore against Rs 762.26 crore posted the previous year.
The operating profit is nearly double that of last year. A company release said liquor activity contributed Rs 72.3 crore profit whereas the beer operations yielded a Rs 7.4 crore surplus.
The release further said that in a departure from the earlier accounting practice, the interest on income accrued during the year on loans to subsidiary companies had not been taken into consideration as income.
"It is significant that the company did not reckon an amount of nearly Rs 40.7 crore as income by way of interest on loans/advances to 100 per cent investment companies due to change in accounting policies.
This has been done to enhance transparency in financial management", the company's managing director Ravi Jain said.
The company has made projections of operating profit at Rs 85 crore (year-ending June 1998), Rs 90 crore (year-ending June 1999) and Rs 95 crore (year ending June 2000). Commencement of operations in Andhra Pradesh is expected to provide a substantial boost to overall profitability of the company's liquor and beer operations on account of additional sales and reduction in transit and other state levies.
Among the SWC subsidiaries, Shaw Wallace Gelatines has shown a growth of 30 per cent and the subsidiaries of the consumer products division have also shown an increase of 40 per cent in the profits.
However, the agri-chem division has suffered a setback due to the closure of the organophosphorous factory at Haldia, owing to financial constraints that surfaced due to sudden withdrawal of the non-funded facility by consortium bankers.
