NEW DELHI, June 25: Shaw Wallace & Company has reported a meagre net profit of Rs 5.21 lakh on a turnover of Rs 762 crore for the year ended June 1996. The board of directors which met here on Wednesday did not recommend any dividend.

However, the profit before interest, depreciation and tax rose by 17 per cent to Rs 51.40 crore over the annualised figure for the previous year.The company had a turnover of Rs 1038 crore with a net profit of Rs 2.19 crore for the 15-month period ended June 1995.

A company press release issued here after the board meeting stated that the small profit was a result of the high interest charges which the company had to bear due to the outstanding debts.

The board admitted that the interest liabilities on account of inter-corporate deposits and other debts has put the company in "dire straits".

The company claimed that its core business of liquor and beer fared exceptionally well but the poor profitability of the non-core businesses of agro-chemicals, gelatines and consumer products resulted in a drag on the bottomline.

Sale of liquor rose 11.5 per cent to 78.75 lakh cases while beer sales climbed 19 per cent to 78.20 lakh dozen over the annualised figure for the previous years.

Shaw Wallace claimed that the financial profit would have been better if it had been allowed to go ahead with divestment of non-core businesses and the Colombo-based subsidiary Shaw Wallace and Hedges Ltd. The disinvestment process had been stalled due to a petition filed by the Shaw Wallace Employees Federation in the High Court.

The company said it had decided to repay public deposits which had become due on a priority basis out of the monthly profits. "The management is committed to the earliest possible liquidation of all debt and other outstanding liabilities. However, the pace at which the financial revival plan involving disinvestment is allowed to proceed will determine the speed at which Shaw Wallace is able to discharge its outstanding liabilities," a company spokesman said.

The release added that the directors are confident that with strong operational surpluses in the core business of liquor, beer, sale of certain businesses and investments and fresh infusion of funds, it should be possible to pay off debts over a period of time and restore the financial health of the company.

The blueprint of the financial plan has been approved by the board of directors which will be developed into a fully operational plan by a merchant banker to be appointed soon. In the meantime, the courts are being approached to give some time for the repayment of liabilities.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.