The company said that profitability was adversely affected due to the continuing economic slowdown, demand recession, and labour unrest. A stay-in strike caused a lockout at the pulp and paper division, which lasted for 68 days. It also said that it had appointed Anderson Consulting, the world's largest management consultancy, to carry out a strategic performance review which will be available in the next four to five months.

The profit share from Birla Tyres, a closely-heldfirm managed by four Birla companies, was higher at Rs 20.04 crore, against the previous fiscal's Rs 13.09 crore. The other income of Rs 51.59 crore includes profits of Rs 8.68 crore from the sale of ships. Net interest for the fiscal rose marginally to Rs 197.6 crore, from Rs 190.37 crore in 1997-98. Depreciation remained almost flat at Rs 148.82 crore, compared with Rs 145.57 crore in the previous fiscal. The company's exports during the period stood at Rs 435 crore, which was about 22 per cent of the net sales. It said that since February, cement offtake and prices had improved.

Its bagasse paper plant has now achieved optimum capacity utilisation and the paper market has shown some signs of recovery. In textiles, the company said that marginally cheaper imported cotton should help to improve margins. Generation at the two 15mw captive power plants at Century Cement and Maihar Cement divisions have stabilised, and has enabled the company to overcome the power crisis to a large extent. Meanwhile, CenturyTextiles has approached its consortium of bankers and sought approval from the government to pay dividend out of its general reserves.

The company posted whopping losses for two consecutive years--Rs 85.18 crore in 1997-98 and Rs 93 crore in the last fiscal--necessitating dividend payout to shareholders out of its reserves. The board of directors has recommended a dividend of Rs 0.60 per share, against Re 1 a share in the previous fiscal. The company's free reserves have dipped sharply to Rs 747.73 crore in 1998-99, compared with Rs 862.14 crore in the previous year. It has an equity base of Rs 93.04 crore.

Insight

Century Textiles' financial performance for the year 1997-98 has not been much to speak about. The company has posted a higher loss during the year despite a higher share of profits from Birla Tyres. In spite of the losses, the company has been paying dividends from its general reserves. This only results in a deterioration of its net asset value but the company appears to beoptimistic about the future. Besides, there are no plans to put up any new projects. The stock markets, too, appear to have taken a positive view and its shares have appreciated by almost 100 per cent in the last 30 days.

--Sarad Saraf