Income from non-manufacturing items (classified as other income) of 1000 companies rose by 13.7 per cent to Rs 16,409 crore in 1997-98 from Rs 14,431 crore in 1996-97.
However, total income managed only a 6.9 per cent increase to Rs 5,18,700 crore in 1997-98 from Rs 4,85,218 crore in 1996-97.
The ratio of other income to total income rose marginally from 2.97 per cent to 3.16 per cent.
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This study attempts to determine the trend of other income to total income for companies spanning 105 sectors during 1997-98 and 1996-97.
Of the 1000 companies selected, the top 10, according to other income in 1997-98, were Indian Oil (Rs 1,364 crore),ONGC (Rs 725 crore),SAIL (Rs 534 crore), Gas Authority of India (Rs 662 crore), BHEL (Rs 564 crore), Bajaj Auto (Rs 356 crore), Reliance Industries (Rs 336 crore), HPCL (Rs 335 crore),Videsh Sanchar Nigam (Rs 311 crore) and BPCL (Rs 221 crore).
A rather recent phenomenon, other income has started constituting a significant portion of companies' net profit.
Other income largely consists of interest income, export incentive, dividend, and profits through sale of fixed assets.
Of the aggregate other income, interest income accounted for Rs 6,752 crore (41.2 per cent), export incentive income was Rs 675 crore (4.1 per cent), dividend income constituted (4.1 per cent) and income by way of profit on sale of assets and others amounted to Rs 299 crore (1.8 per cent) and Rs 8015 crore(48.9 per cent), respectively.
However, last year, interest income was Rs 6,357 crore (44.1 per cent), export incentive income fetched Rs 399 crore (2.8 per cent), dividend income was at Rs 901 crore (6.3 per cent ), profit on sale of assets, and others stood at Rs 349 crore (2.4 per cent) and Rs 6,425 crore (44.5 per cent), respectively.
The top 10 firms, according to other income to total income ratio during 1997-98, were Fujitsu ICIM (33.88 per cent), Fuller India(21.66 per cent), Bharat Hotels (19.60 per cent), NEPC India (19.36 per cent), Sandur Manganese (18.93 per cent), Max India (17.18 per cent), United Breweries (17.04 per cent), Kothari Industrial Corporation (16.97 per cent), Indian Organic(16.17 per cent) and Punjab Communications (14.07 per cent).
Fujitsu ICIM, a computer manufacturing firm, had a sizeable non-operational income arising out of the transfer of the software business to its subsidiary, International Computers India (ICIL). The divestment of 25.1% of the company's holding in the arm, and other sundry items contributed Rs 47.11 crore.
This enabled Fujitsu ICIM to increase other income to total income ratio significantly during 1997-98.
Among the firms under consideration, 514 reported a fall in the ratio of other income to total income, while 485 firms had a higher ratio in 1997-98.
A prominent drop was witnessed in the case of Assam Company (13.78 per cent in 1996-97 to 1.58 per cent in 1997-98), George Williamson (12.63 per cent to 2.19 per cent), Rajesh Exports (11.26 per cent to 0.53 per cent), Essar Oil(39.33 per cent to 8.59 per cent), KCP(26.84 per cent to 6.30 per cent) and DCM (22.90 per cent to 6.23 per cent).
Interest income of Assam Company significantly declined by 40.8 per cent to Rs 603 lakh in 1997-98 from Rs 1019 lakh in 1996-97. Improvement was noticed in the case of Fujitsu ICIM (8.53 per cent in 1996-97 to 33.88 per cent in 1997-98), Fuller India (4.22 per cent to 21.66 per cent), Kothari Industrial Corporation (2.62 per cent to 16.97 per cent), STI India (1.88 per cent to 13.85 per cent) and Mather & Platt (1.15 per cent to 9.46 per cent).
Kothari Industrial Corporation made a profit of Rs 29.94 crore during 1997-98 after selling one of its coffee estates. Among the ratio of other income to total income for 105 industries during 1997-98, the top five industries are cables-telephone(11.07 per cent), breweries/distilleries (6.88 per cent), hotels (6.71 per cent), oil drilling (6.54 per cent) and electrical equipment (general) (6.22 per cent).
Other income of seven cables-telephone companies rose by 44.60 per cent to Rs 215.30 crore in 1997-98 from Rs 148.89 crore.
An enhancement in the ratio can be seen in the case of car firms (1.46 per cent in 1996-97 to 4.01 per cent in 1997-98), cable-power(1.30 per cent to 3.66 per cent), computer hardware (2.32 per cent to 4.42 per cent) and dyes & dyes intermediates (3.80 per cent to 6.20 per cent).
A decline occurred in the case of 11 pesticides companies (4.30 per cent in 1996-97 to 3.61 per cent in 1997-98), plastics (3.43 per cent to 2.59 per cent)and tea/coffee (5.63 per cent to 3.68 per cent).
Among the tea companies a noticeable drop is evident in the case of George Williamson.
The firm's other income fell by 80 per cent to Rs 3.72 crore in 1997-98 from Rs 18.67 crore in 1996-97.