The Bangalore-based public sector undertaking HMT has significantly revised its accounts for the previous year. The listed company’s much-delayed mandatory filings of financial results for 2012-13 to the stock exchanges reveal the severe hit the company has taken, according to a news report published in The Hindu.

The filings reveal that the company made gross sales of Rs 100.95 crore in 2012-13, compared Rs 161.12 crore in the previous year, a 37 per cent fall. Net sales, after deducting excise paid on output, amounted to Rs 99.42 crore in 2012-13, compared to Rs 159.56 crore in the previous year. The company’s net loss went up from Rs 89.55 crore to Rs 145.38 crore, an increase of 77 per cent.

This comes two months after its Chairman and Managing Director (CMD) was suspended by the Department of Heavy Industry (DHI) for ‘fudging’ and ‘manipulating’ figures about the company’s performance.

The DHI also suspended three other senior officials at the Pinjore plant for the alleged irregularities.

The DHI has constituted a committee to conduct an ‘internal inquiry’ into the affair. A charge sheet on Sridhar will need to be filed within 90 days after he was served with the suspension notice, the newspaper reported.

Harbhajan Singh, joint secretary, ministry of heavy industries, has taken charge of the company for a three-month period on June 15. He has been on the board of HMT since January 2010.

Meanwhile, shareholders have filed complaints to the Securities and Exchange Board of India and the Karnataka Lokayukta seeking a probe.

Fudged figures

The company made no filings for the last quarter of 2012-13. This can be directly attributed to inflated figures of the sale of tractors, the only product it now manufactures, at its unit at Pinjore, near Chandigarh.

The company reported net sales of Rs 133.38 crore in the first nine months of the previous year (April-December, 2012), an increase of 36 per cent over the corresponding period of 2011-12. This implies that the company’s profits in the first nine months of the year were about one-third higher than in the full financial year. And, this has obviously to do with the inflated-sales of tractors that were reported during the period of S G Sridhar, the company’s former CMD.

An analysis of the company’s performance in the last three years shows that its gross loss ratio, which is the ratio of losses to sales, rose dramatically last year — from 11.49 per cent in 2010-11 and 15.78 per cent in 2011-12 to a whopping 73.64 per cent in 2012-13.

An internal inquiry initiated by the DHI revealed that the tractor production figures for 2012-13 were inflated by about 50 per cent and that sales had been overstated by more than 56 per cent. As a result, sales were reported at Rs 155.13 crore instead of Rs 99.41 crore, implying a difference of Rs 55.71 crore in value terms. Moreover, the DHI found that Sridhar was responsible for “misutilising” funds amounting to Rs 38 crore that was released by it to HMT specifically for working capital purposes