PCBL's profit before tax of Rs 2.87 crore for the year includes a total other income of Rs 5.67 crore. The company's statutory auditor, Price Waterhouse, in its report to shareholders has pointed out non-provisioning of year-end shortfalls in respect of certain debts, and loans and advances that are unascertainable.

In addition to this, PCBL, which has taken a long-term view of its fund exposure elsewhere, did not make provision for a Rs 29.72 crore dimunition in the value of its investments.

The company has called the annual general meeting of its sharehoders on March 22. The AGM, among other issues, will be adopt the audited accounts and declare a 10 per cent dividend.

PCBL, which has a 55 per cent share of the domestic carbon black market with a capacity that isthree per cent of total worldwide capacity, posted a 7.45 per cent rise in sales turnover to Rs 319.95 crore to September 30, 1998, from Rs 297.47 crore in the previous year.

The profit before tax dropped by 79.90 per cent to Rs 2.87 crore in 1997-98 from Rs 14.28 crore in the previous year. Commenting on the decline, the management has noted that a large part of the installed capacity was kept idle in the backdrop of the lacklustre automobile industry scenario and the Asian slowdown.

At the same time, raw material prices have gone up by 11 per cent and the rupee has also depreciated. The company has incurred a Rs 3.91 crore foreign exchange loss in respect of forward exchange contract, which will be accounted for in subsequent period.

PCBL, in its notes, has pointed out that there has been a year-end diminution worth Rs 29.72 crore, which has not been provided. Of this, the company has invested Rs 17 crore in its wholly-owned subsidiary PCBL Industrial Finance Ltd's equity, whose net worth has beencompleted eroded.

In fact, the company's dividend income from its investments in subsidiary is nil in 1997-98 against Rs 1 lakh in the previous year. The company's Rs 5.66 crore other income includes interest income of Rs 4.86 crore and dividend of Rs 21.21 lakh from investments in other companies.

PCBL Industrial Finance Ltd's year-end loss was Rs 7.22 crore for the year to March 30, 1998, and the total accumulated loss is Rs 40.87 crore. This loss figure does not consider a Rs 2.95 crore diminition in the value of its investments.

The company's interest expenditure has declined by 48.69 per cent to Rs 6.46 crore to March 31, 1998, against Rs 12.59 crore in the previous year. However, its loan component from the parent PCBL has gone up to Rs 61.85 crore in 1997-98 against Rs 50.08 crore in 1996-97.

This subsidiary has made a provision since an interest component of Rs 51.86 lakh which is due has been categorised as non-performing asset.

Another wholly-owned subsidiary, South Asia ElectricityHoldings Ltd, with a paid-up share capital of Rs 10.01 lakh, has run up an accumulated loss of Rs 12.56 crore as on March 31, 1998. Like PCBL Industrial Finance, South Asia's entire net worth has been wiped out.

Out of the other two wholly-owned subsidiaries, Transmission Holdings Ltd with a share capital of Rs 1.10 crore carried forward an accumulated loss of Rs 22.92 lakh for the year to April 30, 1998.

Carniwal Investments Ltd, the fourth wholly-owned subsidiary posted a loss of Rs 1.24 lakh for the year to May 31, 1998, and it carried forward a profit of Rs 4.23 lakh.

Bill dispute with Kerala

Phillips Carbon Black Ltd, whose stablemate CESC Ltd supplies power to Calcutta, has found itself at the receiving end of a billing dispute with the Kerala government.

Flagship CESC is facing the wrath of its consumers for tariff hikes. In a reversal of roles, Phillips Carbon Black has got into a dispute with the Kerala State Electricity Board over a bill for Rs 1.27 crore.

The bill is for addionalpower consumed. But the auditors have noted that the company has not made any provision as a final decision from the high court decision is pending.