Ackruti City reported its consolidated results today, a month after it reported its standalone results. The real estate company’s operating income fell by 82% to Rs 40.9 crore during the June 2009 quarter, but lower operating expenditure and an increase in its inventory (unsold flats) ensured it still made profits during the quarter.
The company’s total expenditure during the quarter was negative, at about Rs 6 crore. This phenomenon occurred because while it was completing work on its existing projects, it may have spent very little on newer projects. Since it recognises revenues only when 40% of the project work is done, the work would reflect as work in progress. This accounting policy is being changed from the September’09 quarter, when it will recognise income when 25% of the work is done and upon receiving 10% of the sale consideration. That will give a boost to its operating results, even if it is a cosmetic one at that.
A negative operating expenditure meant the company’s operating profit was higher than its income, at Rs 46.9 crore. But higher interest costs, lower other income and tax all contributed to its net profit falling to Rs 6.63 crore in the June 2009 quarter, compared to Rs 171 crore in the corresponding previous period.