1. Cash Credit and Working Capital Demand Loans along with guarantees
(including guarantees given for Deferred Sales Tax liability) and
letters of credit facilities given by the Banks are secured by
Hypothecation of Finished Goods, Semi-Finished Goods, Consumable
Stores, Raw Material, Investments and Book Debts at Baroda, Yamunanagar
& Pondicherry Factories and second charge on block of assets of the
2. Rupee Term loan from bank is secured by equitable charge on
immovable properties of Yamunanagar Plant both present and future on
pari-passu basis with financial institutions and by first charge of
whole of the movable properties of Yamunanagar Plant including movable
Plant and Machinery, Machinery Spares, Tools & Accessories and other
movables, both present and future (save and except books debts) subject
to prior charges in favour of the Company's bankers on stock of raw
material, finished and semi finished goods, consumable stores etc.
3. Foreign Currency Term Loan from bank is secured by the Guarantee of
another bank. Deferred Payment Guarantee represent repayment of
instalments of principal & payment of interest on the said Foreign
Currency Term Loan by the guarantor bank.
4. Foreign Currency Term Loans from foreign Financial Corporations
along with Guarantee (including deferred payment guarantee) given by
Bank for the Foreign Currency Term Loan are secured by an equitable
mortgage of immovable properties of the company and a first charge on
pari-passu basis on all the Company's movable and immovable properties
both present and future, subject to prior charges created/to be created
in favour of Company's bankers on current assets for securing borrowing
for working capital requirement.
5. The Term Loan from foreign financial corporations and deferred
payment guarantee for foreign currency term loan are also secured by
corporate guarantee of another company, which has subsequent to the
period been received by relevant lenders.
6. a) 2,50,000, 18.5% Non-convertible Debentures of Rs. 100/- each are
repayable by January' 2004, as per the revised repayment schedule
specified by the debenture holders.
b) The Debentures are secured by first charge over all Fixed Assets and
Second pari-passu charge over all working capital assets of the
Company, both present and future, wherever situated, subject to prior
charges created/to be created in favour of Company's bankers on current
assets for securing borrowing for working capital requirement.
The above charges rank pari-passu with charges created/to be created by
the Company in favour of other term lending institutions/banks.
7. Deferred Payment Liability is secured against the assets taken on
8. Deferred sales tax liability includes Rs. 10790550 of interest free
loan secured by Bank Guarantee.
9. The amount falling due for repayment within a year is Rs. 4,229.69
lacs (1999-2000 Rs.1,827.47 lacs), after considering the settlement
agreement with Financial Institutions/Foreign Financial
Corporations/Banks for restructuring of the company and reschedulement
of term loans and Non-Convertible Debentures.
10. Pursuant to the one time settlement agreements/arrangements with
secured lenders i.e. ICICI, AFIC, CDC, PNB, and OBC and subsequent to
settlement of outstanding dues, the charges on the assets of the
Company for respective loans have been vacated subsequent to the
balance sheet date.
1. Plant & Machinery and Office Equipment includes Rs. 16,37,852
(1999-2000 :Rs. 16,37,852 ) and Rs. 1,76,548 (1999-2000 :Rs. 1,76,548)
on account of assets acquired on Hire Purchase.
2. Title deeds for Freehold Land, Building and Vehicles acquired
pursuant to acquisition of Pondicherry Starch Unit, w.e.f.1.4.95, are
in the process of being registered/transferred in the name of the
3. Additions to Fixed Assets includes additions to Research &
Development Assets Nil (1999-2000 Rs. Nil) and total Depreciation
charged during the year on Research and Development Assets Rs. 55,370
(1999-2000 : Rs. 1,66,110)
4. Additions and Sales to Fixed Assets includes Rs. Nil(1999-2000 : Rs.
7,41,521) and Rs. 2,40,303 (1999-2000 : Rs.14,71,581) respectively on
account of settlement with the suppliers of capital equipment and
modvat reconciliation, respectively.
5. Plant and Machinery includes land of Rs. 11.26 lacs acquired for
Borewell Pumps at Citric Acid plant which is in the process of being
transferred in the name of the Company.
6. Additions/sales to Plant & Machinery include exchange fluctuation on
term loans amounting to Rs. 23,58,572 (1999-2000 : Rs. 7,73,86,534) and
Rs. Nil (1999-2000 Rs. 13,69,471) respectively.
7. Additions to Plant & Machinery includes Rs. Nil (1999-2000 Rs.
56,94,526) of capital spares relating to Citric Acid plant, capitalised
pursuant to revised AS-2 issued by the Institute of Chartered
Accountants of India.
1. (a) The Citric acid plant at Baroda stopped production in June'98 on
account of numerous technical problems faced,which made commercial
production infeasible. Consequently the Board of Directors have been
negotiating with lenders and promoters for a restructuring package for
the last three years to enable company's businesses to continue. The
Board of Directors have now negotiated the restructuring plan with
Financial Institutions/Banks/unsecured lenders and Promoters and have
therefore approved scheme of reorganisation of the company as indicated
Accordingly, the Company has settled the total outstanding dues, of
ICICI Limited at the period end and has subsequent to the, period end
settled the total outstanding dues of Commonwealth Development
Corporation (CDC), Asian Finance Investment Corporation Limited(AFIC),
Punjab National Bank(PNB) and Oriental Bank of Commerce (OBC) all
lenders of Citric Acid Project and an unsecured lender by way of one
time settlement agreement with the said secured lenders. The financial
effect of the said settlement agreements/arrangement has been
considered while preparing these accounts. Accordingly, provisions on
account of accrued interest and principal waived amounting to Rs.
8,008.77 lacs relating to the Citric Acid Project, have been written
back and reduced from the accumulated Capital work in progress of the
Citric Acid Project.
Consequently the expenditure accumulated under Capital work in progress
in respect of Citric Acid Project from May 1, 1997 to March 31, 2001,
including Preliminary expenses, advances received, capital expenditure,
Deferred Revenue expenditure and expenditure incurred on
Cornwet Milling Complex aggregating to Rs. 14,68,38,631 [including Rs.
5,11,75,826(1999-2000 : 33,99,77,475) incurred during the period] after
netting-off sales proceeds, other income, expenses recovered and
liabilities no longer required written back aggregating to Rs.
41,38,69,818 [including Rs. 12,31,24,604 (1999-2000 : 49,73,317) earned
during the period] and after accounting for adjustment on account of
one time settlement with financial institutions/banks/unsecured lenders
of Rs. 80,08,76,900 as detailed below, relating to the Citric Acid
Project have been written off during the period.
Pursuant to the scheme, the Citric business of the company including
properties, investments, loans and advances, rights & powers together
with all liabilities including contingent liabilities and obligations
will be demerged and vested with BBCL with effect from the close of
business of 31st March, 2001and the residual Company will be
amalgamated with English Indian Clays Limited (EICL), with effect from
1st April, 2001. The effect of demerger of Citric business, on the
scheme becoming effective will be as follows :
Decrease in vlaue of Fixed Assets 1,97,78,52,929
(Including Capital Work in Progress)
Decrease in Inventories 75,22,667
Decrease in Debtors 4,57,117
Decrease in Cash & Bank 2,40,125
Decrease in Other Current Assets 21,865
Decrease in Loans and Advances 5,68,62,371
Decrease in Secured Loans 18,49,35,906
Decrease in Unsecured Loans 1,48,45,658
Decrease in Current Liabilities 6,80,77,005
Advances towards settlement of loans 64,00,00,000
Decrease in Provisions 7,17,258
Loss on demerger of Citric Business 1,13,43,81,247
(to be accounted for on the scheme
With effect from the appointed date
(i) The company shall be deemed to have been carrying on and to be
carrying on all the operations and activities related to the Citric
Business for and on behalf of BBCL respectively.
(ii) All profits accruing to the Citric Business of the Company
including taxes, thereof or losses arising or incurred by its relating
to the Citric business of the Company, shall for all purposes be
treated as the profits, taxes, or losses, as the case may be of BBCL
(b) Pending approval of the scheme of reorganisation/restructuring and
settlement agreements/arrangements, no provision for depreciation on
Plant & Machinery (including depreciation for the period on Research &
Development amounting to Rs. 29.23 lacs (1999-2000 : Rs. 26.31 Lacs)
and building capitalised on April 30, 1997 and subsequent
additions/agreements thereof, interest on Customer deposits and, amount
overdue to Small Scale Industrial units for Citric Acid Project all of
the above aggregating to Rs. 3,829.47 Lacs, has been considered
(c) The Company has received claims from suppliers of capital equipment
for the Citric Acid
Project. The Company has reconciled/is in the process of negotiating
and reconciling its accounts with these suppliers. Accordingly
liabilities amounting to Rs. 2,11,56,085 has been written back during
the period and any additional liability arising on account of these
settlements/reconciliation will be accounted for by the BBCL once the
aforesaid scheme of arrangement become effective of the Citric
business. Some of the suppliers have filed winding-up petition against
the Company on account of non-payment of their dues.
(d) Considering the loss arising demerger of Citric Business as
indicated above, the accumulated losses would exceed the net worth of
the Company as at March 31, 2001. However, these accounts have been
prepared on a going concern basis as the Company is in the process of
filing a scheme of arrangement with the Hon'ble High Courts of Gujarat,
Kerala and Delhi, to divest the Citric business and to amalgamate the
residual Company with English Indian Clays Limited (EICL).
2. Contingent Liabilities:
(a) Bills and cheques discounted amount to Rs. 15,28,278 (1999-2000 Rs.
18,94,481), since realised.
(b) Bank guarantees given to Excise, Sales-Tax Authorities and local
authorities, market cess/fees matters (net of Provision made) against
export matters Rs. 5,00,000 (1999-2000 : Rs. 21,52,669).
(c) Guarantees given by the Banks to customs authorities/DGFT against
fulfilment of export obligations Rs. 16,87,14,742 (1999 - 2000 :
(d) Indemnity Bond Countersigned Rs. 2,29,46,141 (1999-2000 : Rs.
(e) Claims against the company not acknowledged as debts amount to the
extent ascertainble amounts to :
i. Rs. 56,57,871 (1999-2000 : Rs. 56,57,871) in respect of Export
transactions, against which the Company has filed a counter claim of
Rs. 81,77,208 (1999-2000 : Rs. 81,77,208).
ii. Rs. 15,49,795 net of provision made (1999-2000 : Rs. 20,05,795) on
account of rent, water-cess and property-tax.
iii. Rs. 80,67,938 excluding interest (1999-2000 : Rs. 78,79,798) in
respect of Sales-tax Demands and Rs. 1,88,140 (1999-2000 : Rs 1,88,140)
in respect of Income-tax demands.
iv. Rs. 2,01,33,158 in respect of Customs Duty on imports relating to
Citric Acid Project, against which the company had obtained a stay
order and now the case has been referred back to the Tribunal to be
v. Other various matters, the final liability against which, if any, is
not currently ascertainable.
3. Estimated amount of Contracts (net of advances) remaining to be
executed on Capital Account and not provided for Rs. 2,49,98,137
(1999-2000 : Rs. 2,36,51,987).
4. Future obligations, for the rentals under the. finance lease
arrangement, for vehicles and Plant & Machinery amount to Rs. 62,400
(1999-2000 : Rs. 1,09,417).
5. Considering the break-up value of the investments held by the
Company, there is an apparent shortfall of Rs. 15.21 lacs (1999-2000 :
Rs. 14.98 lacs) on a net assets value basis in the carrying value of
Company's investments. However, the above shortfall has been considered
as temporary and hence no provision has been made in this regard.
6. Based on the information available with the Company, the amounts due
to Small Scale Industrial Undertakings, are as disclosed in Schedule 12
and the names of Small Scale Industrial Undertak- ings to whom the
Company owes a sum exceeding Rs. 1 lakh as on March 31, 2001 are
provided in the attached Annexure.
7. No provision for income-tax has been made for the period October
2000 to March 2001 as there is an estimated assessable loss for the
year ending March 31, 2001. Amount of provision for the year represents
shortfall in provision on assessment of earlier years.
8. Previous period figures have been re-grouped/recast, wherever
necessary to conform to the current period classification. The figures
of the current Period are not comparable with the previous period as
current period figures are for 6 months as against previous period
figures of 18 months.