Sales for the quarter, however, increased by 13.39 per cent to Rs 61.54 crores as against Rs 54.27 crores in the coresponding period of the previous year.

During the quarter, 124 employees have left the company after opting for the VRS, subsequent to the closure of the chemical production division at the Taloja factory. The proportionate share of the VRS expenses for this quarter has been debited accordingly, the company said.

Significantly, analysts expect the company to record net savings of approximately Rs 3.2 crores per annum following the closure of the Taloja chemicals unit. Besides, the outlook for the restof the year could improve significantly if the National Pharmaceutical Pricing Authority (NPPA) clears E Merck's application seeking a 15 per cent to 18 per cent increase in the prices of vitamin E, analysts added.

Total expenditure and interest for the period stood at Rs 57.47 crores and Rs 99.39 lakhs, while depreciation was higher at Rs 1.70 crores. Provision for taxation was Rs 65.02 lakhs and has been taken based on anticipated profits for the current year. Other income almost doubled to Rs 1.02 crores from Rs 52.06 lakhs in the previous year.

The company is in the process of achieving Y2K compliance in all the computerised and embedded systems. The company does not envisage any serious threat to its business activities due to the Y2K problem. The total cost of the Y2K compliance plan will be Rs 40lakhs. The company also has contingency plans in the event of a system breakdown/ failure due to the Y2K problem.