i) Term Loan from RIICO
The company has availed project terms loan of Rs. 3800.00 lacs from
RIICO i.e. 828.95 lacs against Land and 281.25 lacs swapping of term
loan from Axis Bank & balance Rs. 2689.80 lacs for building and Plant &
Machinery stands. Disbursed Rs.3513.16 Lacs upto 31.03.2013. Secured by
way of equitable mortgage / hypothecation of fixed assets present &
future of the company by pari-passu first charge (in terms of
Intercreditor and Security Sharing Agreement executed with DEG, Germany
on 19.12.2008) & guaranteed by Managing Director and secured by
pari-passu second charge on current assets present & future.
ii) External Commercial Borrowing (ECB) from DEG, Germany
The Company has executed ECB Loan Agreements viz Loan Agreement - I dt.
18.12.2007 for US $ 8 Mn. [FC Expenditure] and other Loan Agreement ?
II dt. 07.07.2008 for US $ 4 Mn. (stands disbursed on 11.02.2009)
[Rupee Expenditure] with M/s. Deutsche Infestations- und
Entwicklungsgesellschaft mbh, Federal Republic of Germany, for capacity
expansion & modernization. The above Loan is secured by first ranking
mortgage on the present and future immovable assets and first ranking
hypothecation on all present and future movable assets (other than
current assets and stocks).
iii) Term Loan from ICICI Bank Ltd.
Secured by hypothecation of specific assets purchased there against and
guaranteed by Managing Director. Secured by an exclusive charge by way
of hypothecation on all movable properties under the Sponsored Research
& Development program of World Bank (SPREAD) under the agreement dated
6th August, 2003.
iv) Working Capital Loans from banks
Secured by hypothecation of stock of finished goods, semi finished
goods raw material, consumable stores and book debts of the company.
These securities rank pari-passu in favour of various banks viz. State
Bank of Travancore, Canara Bank, Central Bank of India, State Bank of
India, DBS Bank & Exim Bank. Secured by second charge by way of
equitable mortgage of fixed assets and guaranteed by Managing Director.
b) Non fund based limits Assets charged with Bank also cover security
for these limits.
II. UNSECURED LOANS
a) Ministry of Science and Technology under the aegis of CSIR, has
approved a Project under ''NMITLI'' scheme on 30.03.2008 and had
sanctioned unsecured soft loan of Rs. 1503.55 lacs @ 3% rate of
interest out of which Rs. 1493.35 lacs stands disbursed.
The company has complied with the requirement of accounting standard ?
15 on "Employees Benefits" as issued by ICAI, by making a provision for
the post-retirement benefits (i.e. Gratuity and leave encashment)
taking into consideration the provision of the payment of Gratuity Act,
1972 and the age & other terms and conditions of employment. However,
the actuarial valuation for the same has not been done.
III. CURRENT ASSETS, LOANS AND ADVANCES
i) Basis of quantitative particulars given below under item XIV is as
1) Production figures have been ascertained on the basis of production
report summaries. The opening and closing balances of finished goods
are based on stock records and physically verified inventories. Sales
quantities have been furnished on the basis of sales invoices.
2) The quantities of different classes of raw materials and components
consumed have been derived by posting in a separate ledger, the opening
quantities & purchases and deducting there from the closing stock. The
quantities for different items have not been ascertained from stock
cards. The Company is still to introduce a procedure for correlation of
materials consumed with production.
3) Stock of semi - finished, raw material and finished goods includes
slow moving and non-moving stock of Rs. 1.0 - lacs (1.85 lacs). In the
opinion of the Management, no reduction is considered necessary in the
value of the stocks.
4) Semi - finished goods have been ascertained on the basis of physical
5) Finished Goods comprise of varied specifications and include a
number of components. In the absence of a scientific system of costing
in vogue, value of closing stock is worked out, as in the past, by
reducing from the selling price, an appropriate margin towards profit &
6) In the opinion of the Board and to the best of their knowledge and
belief, Value of realization of current assets, loans and advances in
the ordinary course of business would not be less than the amount at
which they are stated in the balance sheet. Balance of personal
accounts are subject to confirmation for the respective parties.
7) The Balances of Sundry Creditors and Sundry Debtors are subject to
8) Materials which were re-shipped to India related to consignment
supplied to CAPSI USA for Navistar Inc, USA left unattended due to
non-payment of duty and other ''charges. There are also losses due to
discernment of OIB Bank USA. The Company Could not arrange funds from
Banks as per Restructuring package to lift these Materials which
subsequently got auctioned or damaged. The Company has suffered huge
Losses to the extent of Rs. 26.54 Crore on this account.
9) Company has incurred huge expenditure in developing frictionless
Clutches with the help of leading Technology institutions of the
Country under the aegis of CSIR. But due to shifting of existing R & D
facility and still construction and other allied works at Bhiwadi and
it is not possible for the Company to re-establish or replicate the old
set-up of Research and product development facilities at Biwadi so
easily seeing the current financial health of the Company as hiring of
Competent professionals, retrieval of data for research Work and to
start each activity pursuant to research & development will be a
onerous task. The Company at present is not in a position to harness
these benefits which might otherwise have been beneficial for the
Company in long run. As such keeping the Current capitalized value of
Research & Development expenditure in the form of intangible assets
does not make any sense and need to be suitably written off . The total
amount comes to Rs. 16.58 Crore
10)The Company has been able to deposit current deducted Provident Fund
Dues/ESI with respect to employees of the Company.