Swc Posts Net Of Rs 5.21 Lakh

Shaw Wallace & Co posted a slender net profit of Rs 5.21 lakh for the year ended 1995-96 and decided against any dividend payment for the year.

The companys gross profit grew by 17 per cent to Rs 51.40 crore over a turnover of Rs 762 crore in the year to March 1996. The company blamed high interest charges on outstanding debts for the thin net profit.

Interest liability arising out of inter-corporate deposits and other debts has put the company in dire straits. The profitability of non-core businesses is also not very high, a company release said.

"Shaw Wallace has therefore been pushing for disinvestment in some of the non-core businesses such as agro-chemicals, gelatines, consumer products and the Colombo-based subsidiary Shaw Wallace and Hedges Ltd, the release added.

 

The board meeting yesterday, presided by managing director Ravi Jain, was attended by the company law board nominees, L C Gupta and C K Hazari, financial institution nominee P K Pandit, excessive directors P J Rao and T S Venkatesan, and Komal Chhabria Wazir, the alternate director to M R Chhabria.

The release said, the performance of core business, namely liquor and beer had been exceptionally good, resulting in strong inflows which enabled the company to pay off some of the inter-corporate deposits and other liabilities. Liquor sales of the company increased by 11.5 per cent to 78.75 lakh cases, while beer sales rose by 19 per cent to 78.20 lakh cases. The company said that it has expanded its market shares during the year despite stagnation and negative growth experienced by the industry.

The release pointed out that the high growth in its core business was possible due to the strategic acquisition of distilleries and breweries during the last two to three years besides aggressive marketing.

The company hopes the trend would enable it to post a substantial operating profit in the financial year 1996-97 over the previous year.

Divestment from non-core businesses, however, has not come about due to a petition filed by the Shaw Wallace Employees Federation, restraining the company from acting in this regard. Despite this, the board has decided that the public deposits which have become due for repayment will be paid off on a priority basis out of the monthly profits of the company, the released.