MCFL posts Rs 5.78 cr loss in Q4; EY finds 'irregularities'

Company reported losses due to provisions made for outstanding dues from its Vijay Mallya-led promoter firm UBHL

Fertiliser firm MCFL plunged into losses in the January-March quarter of 2015-16 year due to provisions made for outstanding dues from its Vijay Mallya-led promoter firm United Breweries (Holdings) Ltd (UBHL).

The fertiliser firm reported a net loss of Rs 5.78 crore for the quarter ended on March 31, 2016, against a net profit of Rs 34.05 crore for the same quarter in 2014-15.

The company in a filing to the BSE said that EY in its investigation has found "irregularities" and "mismanagement" in the company's transactions related to advances to UBHL and investments into Bangalore Beverages Ltd.

Pursuant to the directions of the Audit Committee at its meeting held on March 9, 2016, MCFL had engaged EY LLP to carry out forensic investigation into investments of Rs 200 crore in Bangalore Beverages Limited, and advances made to United Breweries (Holdings) Limited.

MCFL was yet to recover a sum of Rs 16.68 crore from UBHL as of March 31, 2016.

"The company is taking necessary legal advice in connection with the findings of EY," the filing said.

According to the filing, net sales of MCFL rose to Rs 752.34 crore in the January-March quarter of 2015-16, from Rs 666.24 crore in the same period in 2014-15.

The company run into losses due to an exceptional provision of Rs 16.68 crore "for amount recoverable from United Breweries (Holdings) Limited", the filing said.

Also, expenses of the firm rose to Rs 701.47 crore in the last quarter of 2015-16, from Rs 595.53 crore in the year ago period.

For 2015-16 fiscal, the company reported a net loss of Rs 240.12 crore.

The income from operations rose to Rs 3,000.31 crore in 2015-16 from Rs 2,576.87 crore in the previous fiscal.

Shares of the company today closed at Rs 45.45 apiece down by 2.68%.