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Audit check on Eveready overdue loans

Calcutta, June 13: PricewaterhouseCoopers and S. B. Billimoria & Co, the two auditors of Eveready Industries India (EIIL), have raised questions on Rs 172.87 crore in some overdue loans and advances given out by the company.

The auditors say there are certain overdue loans and advances, interest and other recoverable items worth Rs 172.87 crore and a year-end decline in the value of quoted and unquoted investments to Rs 11.91 crore.

The auditors have observed that the company has set aside Rs 100 crore in provisions for contingencies, but available information and records do not help them to determine whether that is enough.

The company had made a provision of Rs 100 crore against these loans and advances in 2001-02.

The management maintains that these advances became overdue on account of the sluggish market conditions and the difficulties in liquidating the assets. The continuing sub-optimal market conditions, sedate capital market and poor monsoon during the year have retarded recovery efforts by the company.

Officials of the company said the management is still pursuing options for recovery of these loans or arranging security, pending repayment and is hopeful that an improvement in market conditions would result in repayments being made.

EIIL, the flagship company of B. M. Khaitan, has also sold out investments in shares and mutual funds to clean up its balance-sheet.

The company has sold out shares of ICICI Bank, HDFC Bank, State Bank of India and SBI Mutual Funds. The company has also offloaded its investments in SBI floating interest bonds.

“There were some junk investments in certain companies like Dakorji Properties, McNama Consultants, Gesco Corporation and others. The company thought it prudent to offload these investments to present a clean balance-sheet to its shareholders,” said a senior official of the company.

The company has interests in both tea and battery. In 2002-03, the company sold 10.76 million units of flashlights. The total production of batteries touched 1 billion. The company exports its batteries under the brand name ‘Lava’ to seven countries.

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