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Bharat Starch Industries
BSE: 524750|ISIN: INE030D01013|SECTOR: Miscellaneous
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Bharat Starch Industries is not traded in the last 30 days
Bharat Starch Industries is not listed on NSE
Notes to Accounts Year End : Mar '01
SECURED LOANS
 
 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
 company.
 
 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
 hire-purchase.
 
 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.
 
 FIXED ASSETS
 
 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
 company.
 
 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.
 
 OTHER NOTES
 
 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
 below.
 
 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 :
 
                                                             Rs.
 
 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
 
                                                  2,04,29,57,074
 Less:
 
 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 
 becoming effective)
 
                                                  2,04,29,57,074
 
 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
 respectively.
 
 (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
 necessary.
 
 (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 :
 16,83,63,102)
 
 (d) Indemnity Bond Countersigned Rs. 2,29,46,141 (1999-2000 : Rs.
 2,25,84,479).
 
 (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
 assessed afresh.
 
 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.
Source : Dion Global Solutions Limited
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