Who s to Blame for Deficits

Who's to Blame for Deficits?
Hansavivek ROHTAS INDUSTRIES' results for 1976-77 show a net deficit of Rs 29 lakhs which, after providing for arrears of depreciations for 1975-76, increased to Rs 151 lakhs. This, however, was reduced to Rs 115 lakhs by taking into account the previous year's surplus of Rs 36 lakhs. This outcome occurred despite higher production of paper and boards and cement. The directors say that, with additional production capacity coming into being, the market for duplex board continued to be sluggish. The average realisation on the company's products declined by about Rs 250 per tonne. The coating plant was virtually closed for want of base paper which could not be produced because of the operation of the Paper (Control of Production) Order. The machine installed at heavy cost had to be kept idle and the labour could not be laid off. The royalty on bamboo was revised upwards by Rs 50. The unhelpful policy of the state government on the leasing of bamboo areas further affected the availability of raw material at competitive cost. Demand for MG varieties has picked up in the current year. Profitability of the paper division is dependent on the level of demand for duplex boards. Efforts are being made to step up export of duplex boards to Pakistan and other countries. The rag plant, which went into production during the year, has ensured improved supplies of pulp to the paper factory. The financial institutions have accepted in principle the financing of the company's project for expansion of paper production to the extent of Rs 7.07 crores