The Hindu Business Line : Provisions to ITC make Agro Tech incur loss

FOLLOWING the provisions made to ITC Ltd as a part of the settlement agreement entered into for the Mantralayam unit, Agro Tech Foods Ltd (ATFL), the Hyderabad-based Rs 1,114-crore player into the business of branded foods and bulk and processed commodities, has suffered losses for the fiscal year ended March 31, 2003.

According to the audited financial results taken on record by the ATFL board, the company incurred a net loss of Rs 12.5 crore for the fiscal under review as against a net profit of Rs 1.6 crore in the previous fiscal on sales turnovers of Rs 1,113.6 crore and Rs 894.8 crore, respectively.

As per the settlement agreement that resolved matters involving the licensing arrangement of Mantralayam unit, ATFL was required to pay Rs 43 crore to ITC spread over five years.

According to the ATFL wholetime Director, Mr Tushar Chudgar, this settlement amount was amortised on the basis of the enduring benefits expected in the future due to decentralisation of manufacturing operations. Accordingly, the corresponding settlement cost for the year under review and other non-recurring and non-operational costs, including loss on disposal of assets, arising out the said settlement have been charged as an extraordinary item during the fiscal under review.

The company provided Rs 13.9 crore towards extraordinary items during 2002-03.

For the fiscal under review, it incurred an expenditure of Rs 1,109.1 crore (Rs 889.5 crore) and provided Rs 7.9 crore towards interest and finance charges (Rs 3.8 crore), Rs 1.1 crore towards depreciation (Rs 7.3 crore) and availed a benefit of Rs 30 lakh towards deferred taxation as against a provision of Rs 90 lakh made in the previous fiscal.

Reserves which were at Rs 57.6 crore at the end of March 2002, declined to Rs 45.1 crore as on March 31, 2003 on an equity base of Rs 24.4 crore.

During the year under review, Sundrop volumes increased and a new variant, Sundrop Heart, was launched in select markets during the last quarter of fiscal, Mr Tushar Chudgar said.

The company's business was classified into two segments - branded foods and bulk and processed commodities.

According to ATFL, its branded foods segment includes products sold under the brands of Sundrop, Crystal, Rath, Sudham, Healthy World and Act-II. As against this, bulk and processed commodities segment includes oils and grains procured, processed and distributed by the Commodity Sourcing and Exports and the Seed Buying operations.

The export turnover for the fiscal under review rose substantially to Rs 85.8 crore (Rs 8.8 crore).

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