The Hindu Business Line : Kesoram Textile Mills referred to BIFR

Mr S.K. Parik, Director of the company, told Business Line on Tuesday that the reference was made last week based on the annual report of the company for 2003-04 and in terms of provisions of the Sick Industrial Companies (Special Provisions Act), 1985.

The mill, located on the outskirts of the city, has been under "suspension of work" for over five years. The net worth of the company, at Rs 10.53 crore, comprising share capital of Rs 10.46 crore and reserves worth Rs 7.31 lakh, stands completely eroded as on March 31, 2004. The accumulated loss stood at Rs 18.72 crore as on March 31, 2004.

The audited balance sheet of the company for 2003-04 showed a loss of Rs 2.13 crore, including a provision of Rs 84 lakh for depreciation. The combined secured and unsecured loans stood at Rs 9.63 crore. Among the assets, the factory land (11.18 lakh sq.ft area) carries a book value of just Rs 9.25 lakh.

The company's completion of five years of incorporation coincided with end of the financial year to March 31, 2004, which is relevant for reference to the BIFR under SICA.

According to Mr N.G. Khaitan, Chairman of the company, as the labour problem could not be resolved, the plant and machinery of the mill were rendered almost junk.

According to him, there are around 1,000 workers still on the mill's rolls, a section of whom continues to be "hostile and rigid" in their stance over reopening of the factory and revival of the company.

According to the auditors R.K. Duggar & Co: "The company is still in the process of compiling records to show full particulars, including quantitative details and situation of its fixed assets by obtaining the necessary information from the records of Kesoram Industries Ltd (B.K. Birla group flagship) from whom such assets have been acquired pursuant to a scheme of arrangement.

"The fixed assets were physically verified by the management at the end of the year (2003-04), but discrepancies, if any, will be evident only after the records are compiled."