MUMBAI, June 18: The net profit of Associated Cement Companies (ACC) has dropped sharply to Rs 76.92 crore during the year ended March 1997 from Rs 226.78 crore last year. The directors have recommended a dividend of 30 % (on the expanded capital of Rs 137 crore arising out of the 3:5 bonus issue) against 70 % paid last year on lower capital.

The overall income for the year at Rs 2,527.26 crore (Rs 2,422.83 crore) was higher by 4.30 % over the previous year. The profit before depreciation, interest, extraordinary items and tax was lower at Rs 286.56 crore against Rs 445.51 crore in the previous year. The gross profit dropped to Rs 168.27 crore from Rs 347.42 crore.

The provision for interest is at Rs 118.29 crore (Rs 98.09 crore), depreciation is at Rs 79.35 crore (Rs 63.18 crore) and taxation is at Rs 12 crore (Rs 59.50 crore). After certain adjustments, the amount available for appropriation amounted to Rs 111.85 crore against Rs 240.51 crore.

The dividend will absorb Rs 41.10 crore (Rs 58.24 crore). This along with applicable tax payable will work out to a pay-out of 60 % of the profit for the year.

According to the management, the company's business was adversely affected due to very difficult market conditions. Further, unprecedented cost increases in the major inputs such as coal, power as well as increase in cost of transportation exerted considerable pressure on operating margins even though the impact of this was partly offset by improvement in operational efficiencies including costs. The absence of income from sale of investments, the lower dividend income from Unit Trust of India and other income also contributed to the reduction in profits.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.