All the above loans are secured against hypothecation of Stock of Raw
Material, Stock in Process, Finished Goods, Book Debts, Spares &
Receivables of the Company ranking pari-passu.
TERM LOAN From IFCI
Interest on term loan - IFCI Above loan is secured against all movable
assets of the Company except Book Debts & stock hypothecated with the
banks for the working capital limits. Also secured against mortgage by
deposit of title deeds in respect of company's land admeasuring 5.78
acres situated at 24, Dharuhera Industrial Estate, Distt. Rewari,
Haryana and 4 acres of plot situated at NH-8, Narshingpur together with
all building structures and sheds constructed and all the plant &
machinery and furniture & fittings attached thereto.
1. The Company has been declared as a Sick Industrial Company by the
Board for Industrial & Financial Reconstruction (BIFR), on a reference
made to it by the Company during the year. Since the Company is
hopeful of acceptance of its revival proposal being finalised by the
Operating Agency for consideration of BIFR, it has prepared its
accounts on a going concern basis.
2. Contingent liabilities exists in respect of :
Claims not acknowledged as debts -
(i) Interest and loss that may arise due to exchange rate difference on
settlement of claim made by Mobil Sales as referred to in A9 above.
i) Interest that may become payable on passing of orders by Appropriate
Courts on the claims lodged by some of the loan creditors.
ii) Amount deducted by customers as commission or on account of rate
difference etc. to the extent not recognised by the Company (Amounts
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. Nil.
4. Balance in the accounts of many sundry creditors, other creditors
and loans & advances including the ones reflected under capital work in
progress being unconfirmed are subject to adjustment on reconciliation.
The company had undertaken an exercise to reconcile the Sundry Debtors
balances and see their recoverability. Accordingly, the company wrote
off debts amounting to Rs. 7854519/- and provided Rs. 19142713/-
towards doubtful debts last year besides adjusting for rate
differences, discounts etc., Rs. 15,25,58,147/- under the head prior
period expenses since they related to earlier years. The Company has
made a further provision of Rs. 4,32,787/- towards doubtful debts this
year. The remaining adjustments, if any would be made in the accounts
on completion of that exercise.
5. No provision has been made in the accounts for interest payable (Rs.
53,28,683/-) on most of the accounts listed under Inter Corporate
Deposits, Bills Discounted and Deferred Payment creditors in view of
the exercise undertaken by the Company to renegotiate the agreed terms
6. Since the Company has not been able to obtain the required
information to work out the book value of its investment in Equity
Shares of M/s Mishan Flora Ltd., the same is reflected at cost.
7. On 25/04/1997, in terms of a resolution passed at Shareholders Extra
Ordinary General Meeting held on 29/01/1997, the Company has allotted
to the promoters, on preferential basis, 30,00,000 equity shares of Rs.
10/- each at a premium of Rs. 2/- per share, and 3,24,480 optional
tradeable warrant of Rs. 240/ - each, Rs. 48/- called and paid up,
entitling them to apply, within 18 months from its date of allotment,
for minimum of five and maximum upto twenty equity shares of the
Company per warrant at such price, terms and conditions to be decided
by the Board of Directors as per then prevailing SEBI or relevant
guidelines. The promoters have since exercised the option for
allotment of five Equity shares per warrant. These 30,00,000 equity
share's and the 1622400 equity shares allotted on exercise of option
are not transferable for a period of 5 years from the respective dates