Calcutta, Aug. 29: S. R. Batliboi & Co has raised questions over the Rs 80.94-crore loss reported by Hindustan Motors in 2003-04. According to the auditor, the figure should have been Rs 172.52 crore.
The auditor said the company has not provided for a part of gratuity liability amounting to Rs 20.96 crore and future monthly compensation of Rs 15.31 crore to the employees under VRS.
S. R. Batliboi has also pointed out that the company has not accounted for the doubtful debts aggregating to Rs 9.15 crore. The auditor has failed to express any opinion on the recognition of the deferred tax asset (net) of Rs 41.28 crore.
The inclusive method of accounting followed by Hindustan Motors and a consideration of Cenvat element on inputs included in closing stock of finished goods for the purpose of excise duty provision has resulted into a net increase in loss by Rs 1.63 crore.
However, even though the auditor has raised questions, the corporate debt restructuring (CDR) cell, led by ICICI Bank, has cleared the package of Hindustan Motors.
The salient features of the CDR package are lowering the interest rate and rescheduling the repayment period.
The interest rate on loan liability has been reduced to 10.25 per cent per annum. The CDR cell has also approved the proposal of converting a portion of the term loan, amounting to Rs 18 crore, to preferential shares with an option of converting it into equity, subject to shareholders’ approval.
At present, the promoters’ shareholding in the company is 29.36 per cent. About 51 per cent of the shares are held by the public. The remaining are held by mutual funds, UTI, banks, foreign institutional investors and private corporate bodies.
The CDR cell has allowed the company a moratorium on interest payment for three years, beginning April 2004.
The company’s total debt burden is to the tune of Rs 300 crore. The total interest payout is Rs 55.35 crore. Officials said the exercise will enable the company to save Rs 12 crore annually.