Total net realisation on sale of assets and "other income" for 1998-99 is Rs 89.92 crore. ICI India has recorded a profit before taxation of Rs 75.88 crore which indicates that in the absence of realisations from sale of assets and "other income" the company would have recorded a loss.

The directors have recommended a dividend of Rs 5.50 per share.

The company, that manufactures paints, explosives, acrylics and rubber chemicals among other things, has also not provided for Rs 17.97 crore contingent liabilities (sales tax, excise, customs etc) according to schedule 13 of the accounts.

Under the head "other income" the company recorded an inflow of Rs 39.32 crore in the profit and loss account. According to theprofit and loss account, inflows clubbed under "other income" include estimated insurance claims receivable, commission, provisions written back, income from investments, net realisation on sale of certain fixed assets and miscellaneous receipts.

Income from sale of assets (net of relevant expenses), clubbed under exceptional items, works out to Rs 50.60 crore according to schedule 18 to the profit and loss account.

Sale of assets include the sale of Animal Health Product brands (Rs 10.96 crore), sale of shares in Nalco Chemicals India Ltd and Zeneca ICI Agrochemicals Ltd (Rs 27.77 crore), and sale of flats in Mumbai (Rs 11.87 crore).

The net realisation of sale of assets have been set off against certain exceptional expenses, like VRS payments, Y2K compliance costs and costs of business reorganisation, to report a profit on exceptional items of Rs 26.48 crore in the profit and loss account.

The directors in their report to the shareholders have acknowledged "Margins were under pressure reflectingincreased competition from imports and lower demands in a slowing economy." The company has recorded an income of Rs 833.33 from sales and services which is a 17 per cent growth from the previous year's figure.

The financial results for 1998-99 are significant as ICI India is set to hive off its explosives business, worth Rs 160 crore as a joint venture with Australia-based explosives major Orica Ltd, where ICI India will hold a 51 per cent share. The new company will be called Indian Explosives Pvt Ltd.

Incidentally the "other income" figure for ICI India in 1997-98 was similar at Rs 39.74 crore. The company has recorded a profit after tax of Rs 61.38 crore which is a 22 per cent growth on the 1997-98 figure of Rs 50.51 crore.

However, operating profit of the company (including the income under other income) has dropped by 6.67 per cent in 1998-99. According to the directors report the operating profit for 1998-99 is Rs 101.12 crore while in 1997-98 it was Rs 108.33 crore.

The imports by ICI Indiawent up to Rs 93.16 crore in 1998-99 from Rs 57.14 crore in 1997-98. Imports under "other items" went up from Rs 5.07 crore to Rs 40.02 crore, according to schedule 19.

ICI India changes auditors

Lovelock & Lewes, who have been auditors of ICI India since the company's inception, will no longer audit the accounts of the company from the current financial year.

The directors have informed the shareholders that the company's accounts will henceforth be audited by BSR & Co, a firm of chartered accountants and a member of the KPMG Group.

However, Lovelock & Lewes will continue to audit the accounts of ICI India subsidiary Initiating Explosive Systems India Ltd.