The Hindu Business Line : SPIC posts Rs 31.83-cr cash profit

SOUTHERN Petrochemical Industries Corporation has reported a cash profit of Rs 31.83 crore for the year 2003-04, but the auditors have raised a few objections to the final statements, as they have done in the two earlier years.

One of the audit qualifications is that the company has recognised as income Rs 105.73 crore, due from a subsidiary company, SPIC Petrochemicals. SPIC has been trying to get a "strategic investor" on board the subsidiary for over three years, but so far its efforts have not yielded fruit.

SPIC has said in a press release that, "there has been a turnaround reduction in loss, now down to Rs 9.41 crore from Rs 375.69 crore in 2002-03."

The release says that the performance of the company was primarily driven by higher production, and improved liquidity following the implementation of a debt-restructuring scheme by financial institutions.

Turnover has declined to Rs 1,488.89 crore from Rs 1,616.72 crore previously.

The effect of the debt restructure is seen in the interest costs, which were about Rs 49 crore for the year, compared to Rs 178 crore previously.

SPIC has also given loans and advances to some companies promoted by it, amounting to Rs 249 crore. "In view of the poor operating performance of these companies, the possibility of full recovery is remote," the auditors have said.

SPIC has made no provision in its books against these loans "in view of the long-term involvement with these companies."

The footnote to the results statement mentions that the promoters have brought in about Rs 20 crore on March 31, 2004, as equity contribution required under the debt-restructuring scheme.

Q1 net loss up: Meanwhile, the company has reported a jump in its net loss for the first quarter of the current year — to Rs 51 crore from Rs 13 crore in the same period last year.

Turnover rose to Rs 330.60 crore from Rs 267.28 crore in Q1 last year. The company has said that the ammonia and urea plants were "stopped for turnaround maintenance" from March 25 to April 24.

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