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| What led to sudden loss of Rs 26 cr in JK Cements? | | Govt seeks fresh probe | | Peerzada Ummer
Early Times Report
srinagar, Aug 30: The Jammu and Kashmir government has initiated a probe afresh into the alleged misappropriation of funds in JK Cements, which has suffered losses up to Rs 27 crore.
The initial inspections conducted in this regard reveal that though the company had earned profit of Rs 4.35 cr during the financial year 2011-12, it has suffered huge losses during the previous financial year.
Documents available with Early Times divulge that by the end of 2015, the company had suffered loss of more than Rs 26 cr due to less production, increase in power tarrif, rising cost of fuel and increase in the administrative expenditure.
However, the inspection report while taking a dig at the company's management has mentioned that despite refund of the central excise duty of more than Rs 37 cr till 2015 and assured captive market of the cement, the company had failed to maintain and increase its profitability.
"Due to loss, the return on capital employed became negative at 25.07 percent during 2015-15 from positive 3.90 per cent during 2010-11," reads the report.
Those privy to this development said the company had authorised share capital of Rs 60 cr and the paid-up capital of Rs 14.99 cr as on March 31, 2015 wholly contributed by the state government.
Furthermore, the state government had contributed Rs 35.32 cr towards the share capital. Also, loan of Rs 62.47 cr was obtained from the state government and Jammu and Kashmir Bank till the financial year 2015.
While elaborating over the losses, the report available with the state government reveals that inventories which stood at Rs 26.25 cr as on March 2011 rose to Rs 40.99 cr till 2015 as a result of which the inventory sale ratio rose from 32 percent to 5 percent. It not only resulted in chaos within the company but also resulted in the blockade of funds to the large extent.
The report reveals further that in the company, the capital contribution increased from Rs 41 cr to Rs 50 cr for the implementation of the cement grinding packing unit at Samba which had not been completed despite delay of about two years.
"The secure loans increased to the whooping more than Rs 53 cr due to part repayment of term loans availed at new plant at Khrew, availing of term loan for the Samba project and also the cash credit facility of Rs 20 cr," reads the inspection report.
Meanwhile, sources within the government reveal that the accounts of the company are likely to be scrutinised soon. It was also learnt that the loopholes, which caused such a huge loss, will be identified to ensure the company does not incur more losses in the future. |
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