Lumax Automotive Systems today said Board for Industrial and Financial Reconstruction (BIFR) has registered its application to declare the auto component maker a sick enterprise. The company had first approached the BIFR under the provisions of the Sick Industrial Companies Act on November 24 last year. "The BIFR has registered the application made by the company under the provisions of Sick Industrial Companies Act(SICA),1985," Lumax Automotive Systems said in a regulatory filing.
Under the SICA, if the accumulated losses of a company, at the end of any fiscal year have resulted in erosion of 50 per cent or more of its peak net worth during the preceding four fiscal years, such a firm is required to report to BIFR. Having done so, such a company is protected from lenders who cannot take legal recourse to recover loans. For the second quarter of this fiscal, the company had reported net sales of Rs 6.86 crore compared to Rs 18.01 crore for the same period of previous fiscal.
The company's net loss for the second quarter stood at Rs 14.23 crore as against Rs 10.22 lakh during the year-ago period. Shares of Lumax Automotive Systems today ended 5.21 per cent down at Rs 40 apiece on BSE.
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