MUMBAI, July 2: The Modern group of companies have incurred a whopping loss of Rs 180 crore during the year ended March 1998 due to heavy interest burden and the crisis facing the textile sector. The audited financial results of five Modern group companies released on June 30, 1998 clearly indicate that all the modern group companies are in the red as only one out of the five group companies (Modern Insulators) has made a gross profit of Rs 31.61 lakh while all of them have made net losses.The heavy losses incurred by the Modern group also put at stake the huge institutional loans and bank borrowings of the group which went on an expansion spree with institutional borrowings and public issues. The group has incurred huge losses in spite of concessions received from the consortium of banks and financial institutions which waived interest charges on huge loans taken by the group and restructured the loan repayment schedule.Of the five Modern group companies, the largest loss is incurred by Modern Syntex(India) Ltd to the tune of Rs 86.33 crore as against Rs 5.18 crore net profit made last year. While the company's net sales amounted to Rs 450.87 crore as against Rs 518.03 crore last year, the interest expenditure due to heavvy borrowing increased sharply to Rs 60.30 crore from Rs 27.79 crore. The company even made a gross loss of Rs 53.61 crore. The second largest loss-making group company is Modern Denim Ltd which incurred a net loss of Rs 38.56 crore as against Rs 55 lakh net profit made during 1997. While the company's net sales came down from Rs 116.33 crore to Rs 96.11 crore, the interest expenses of Rs 31.30 crore as against Rs 18.79 crore last year. The company's total expenses have in fact came down from Rs 103.30 crore to Rs 86.93 crore.Modern Terry Towels Ltd made a net loss of Rs 28.49 crore for the year ended March 1998 as against Rs 21.13 lakh profit last year. In the case of this company also the interest expenses of Rs 22.67 crores as against Rs 14.58 crore contributed to the loss. Thenet sales of the company also came down from Rs 116.33 crore to Rs 94.26 crore.Modern Threads India Ltd too made a net loss of Rs 25.30 crore as against Rs 44 lakh profit last year. In this case also the interest expenditure of Rs 28.34 crore as against Rs 19.33 crore last year also contributed to the loss. Modern Insulators Ltd too has incurred a loss of Rs 2.67 crore as against Rs 95 lakh profit made last year.The huge loss is in spite of the companies not making any provision for taxation. The combined losses can partially wipe out the company's networth. In the case of Modern Syntex Ltd, the net loss of Rs 86.33 crore is against a networth of around Rs 270 crore.The Modern group has been facing pressure from institutional creditors to repay the huge borrowing made to finance an expansion spree.
