Fruit & Vegetable (MDFVPL), a unit of National Dairy Development Board, has lost its ‘AAA’ credit rating because of the hit it has taken for provisions in its account book for deposits placed with default-hit IL&FS. It had to make a impairment provision of Rs 190.85 crore from the investments in IL&FS in the form of unsecured short-term inter-corporate deposits. Further in 2018-19, it reported a negative profit after taxes, of Rs 91.8 crore due to the burden of provisions.
The previous year had shown a (positive) PAT of nearly Rs 37 crore. Taking this into account, CARE Ratings
has revised its grading to ‘AA+’. The revision factors in the weakness in MDFVPL’s internal control systems which led to the IL&FS deposit, it said. The amount had to be fully provided for in the accounts for FY19 on the default by IL&FS, leading to a 35 per cent erosion of its net worth, CARE said.