The Hindu Business Line : SPIC posts higher operating loss in H1

SOUTHERN Petrochemical Industries Corporation (SPIC) has reported a higher operating loss in the first half of the current year. The company's net loss after interest and depreciation but before `exceptional item' of income stood at Rs 84.94 crore compared with Rs 79.54 crore in the same period last year.

However, in the second quarter of the current year, the company was able to pare its net loss (before `exceptional item') to Rs 33.94 crore from Rs 66.22 crore in the same quarter last year.

An `exceptional item' of Rs 212.54 crore, which represents the net gain on restructuring of its floating rate notes, enabled the company to report a net profit of Rs 178.59 crore in the quarter under review.

However, the auditors have, once again, made a number of qualifications, pointing out instances where the company has not drawn up its accounts in according to good accounting practices.

For example, they have noted that SPIC had taken into account an interest relief of Rs 18.27 crore from two lenders who are yet to confirm their consent for reduction of interest rate. SPIC has "explained" that in its view the two lenders "would give consent".

The auditors have reiterated their qualification that no provision has been made for investments in, loans to and receivables due from "certain promoted companies" although "in our opinion, the possibility of full recovery is remote".

Turnover for the quarter ended September was higher at Rs 570.27 crore compared with Rs 394.55 crore in the same quarter last year. Cost of raw material consumed as a proportion of sales went up to 57 per cent (45 per cent).

The company has also not made any `provision for taxation' although it has reported a net profit for the quarter.