The Rs 552 crore engineering- to- chemicals company has skipped dividend for the first time in the last five years. The company has convened its 51st annual general meeting on September 21 in Calcutta.

Turnover for the year to March 31, 1998, dipped by nine per cent to Rs 551.69 crore from Rs 608.11 crore in the previous year. Profit before tax declined by 78 per cent to Rs 6.26 crore from Rs 28.30 crore in 1996-97.

A change in accounting method for gratuity liability from cash basis to accrual had a Rs 14.77 crore impact on the profit.

The auditor noted that: "Loans given to certain bodiescorporate as given in Note 18(a) of Schedule 12 have become overdue for payment." According to the notes to the accounts, Rs 76.56 crore is overdue for repayment, including the interest component.

The company has said that "necessary steps" for recovery have been taken. "Interest on such loans considering the uncertainty as to the realisation will be accounted for on receipt thereof," the company has said.

Lodha & Co also pointed out in their note that: "Certain loans repayable on demand have been rescheduled in terms of High Court Orders, to be payable as stipulated by the Court..."

The company said that, in line with the directions of the Calcutta high court, interest on Rs 43.09 crore loans advanced by the company, "has been waived". However, HDC has already taken into account an interest of Rs 65.07 crore in its income till the period to March 31, 1997.

The interest will be waived only when the principal amount of Rs 43.09 crore is paid in line with the directions of the Calcutta high court. Theadjustments will be carried out accordingly, the company has noted.

The auditors have also noted that sundry debtors and advances of HDC amounts to Rs 7.93 crore to March 31, 1998, against Rs 5.96 crore in 1996-97 for which the company has initiated recovery proceedings. The company considers these as "good and recoverable", according to the notes to the accounts.

The notes also pointed out that sundry debtors, advances and free supply of materials lying on account of third parties, "are subject to confirmation and consequential reconciliations etc".

Contingent liabilities not been provided for have more than doubled to Rs 20.87 crore from Rs 8.81 crore in 1996-97.

HDC has also revalued certain fixed assets taking the market value of those assets as on March 31, 1984. Due to revaluation, the gross block of fixed assets as on March 31, 1998, was Rs 48.91 crore (net), was added. This includes Rs 1.26 crore depreciation for 1997-98.

The company has filed an first information report with the policeagainst "defalcations of funds (amount unascertained) of the Company by some employees". HDC says it will make necessary adjustment as and when recovered for which the company has already initiated civil and criminal proceedings.

The notes also pointed out that the office and factory premises were searched by the Income Tax authorities in the previous year and certain records of earlier years have been seized. However, the company says, it is yet to receive any demand notice from the authorities.