Galada Power & Telecommunications Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018


01. The Company was declared sick by BIFR and vide its order dated 14.09.2007,BIFR confirmed its opinion for winding up in terms of section 20(1) of SICA. The Company preferred an appeal against the said order with the Hon'ble Andhara Pradesh High Court (erstwhile Combined)which stayed the order and further hearing is in progress.As the Management of the Company is of the view that an acceptable and viable rehabilitation package can be worked out since all term lenders except SASF/ Syndicate Bank have already agreed for financial reconstruction, the accompanying financial information have been prepared on a "going concern basis".

02. IDBI transferred to SASF the facilities availed by the Company together with all underlying security interests thereto and all of IDBI’s rights on 30.09.2004 . The Company pursued with SASF for negotiated settlement of dues which was approved for Rs. 1667 lakhs on 07.07.2014. As the repayment terms were not complied with by the Company , SASF revoked the one time settlement (OTS) sanction on 27.04.2016 and filed a recovery suit for Rs. 584,02,75,452 (dues as on 01.01.2017) in Debt Recovery Tribunal (DRT) and invoked the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 as amended (Sarfaesi Act) and took physical possession of 1.812 acres of land at Uppal and symbolic possession of all facilities including land at Silvassa on 13.6.2017. The Company filed an application before DRT challenging the recovery suit and action taken by SASF under Sarfaesi Act and also made a modified OTS proposal for Rs. 21 crores to SASF. On depositing of 10% upfront money amounting to Rs.2.10 crores , the application made by SASF to take physical possession of facilities at Silvassa was set aside by the Hon’ble District Collector .The application filed by the Company before DRT challenging the recovery suit and action taken by SASF under Sarfaesi Act has been dismissed by DRT vide its Order dated 12th November 2018 .Aggrieved by said dismissal Order the Company filed a writ petition with the Hon’ble High Court of Judicature at Hyderabad for the State of Telanagana and the State of Andhra Pradesh on 30.12.2018 wich is yet to be admitted by the Hon’ble High Court.

In the meantime, SASF has made an application before National Company Law Tribunal (NCLT), Hyderabad Bench to initiate corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016 claiming default by the company in repayment of dues amounting to Rs. 727,68,77,776/- (comprising inter alia, principal amounts, interest thereto and incidental expenses). The company has filed the counter praying for dismissal of the application and for a direction to be issued to SASF to honour their commitment of considering its OTS proposal. The hearing is scheduled to be on 18.02.2019 for arguments.

03. Edelweiss Asset Reconstruction Company (EARC) vide their letters dated 16.10.2018 has cancelled the Financial Assistance for non Payment of Dues invoking the provisions of the One Time Settlement (OTS) agreement with regard to Canara Bank and IIBI . As per the terms of the agreement, upon revocation of the OTS, repayments made till date shall stand forfeited and EARC will be entitled to recover total dues of Canara Bank and IIBI along with interest at contractual rates, further interest and other charges from the said date till the date of realisation after adjusting the amount forfeited. At the request of the Company EARC reinstated the Settlement vide their letter dated November 26,2018 ,Subject to the condition that this settlement shall automatically stand cancelled on admission of a petition voluntarily filed by the company or filed against the company by any Financial Creditor ,Operational Creditor before the National Company Law Tribunal (NCLT) under the provisions of Insolvency and Bankruptcy Code , 2016 and EARC shall be entitled to recover the total outstanding dues of Canara Bank and IIBI along with interest at contractual rates ,further interest and other charges from the said date till the date of realisation after adjusting amount forfeited.

04. Other Income of Rs.90 lakhs for the period ended 31.12.2018 includes profit of Rs.81 lakhs on sale of non-core assets .

05. Interest on Working Capital Loan from Syndicate Bank is not provided to the extent of Rs.29,703 lakhs up to 30.09.2018 and Rs.1,132 lakhs for the Quarter.

06. Interest on unpaid dividend is not provided to the extent of Rs.312 lakhs up to 30.09.2018 and Rs.3.50 lakhs for the Quarter.

07. Complaints received from the share-holders during the period under report: Nil.

08. No segmental reporting is required as the Company is exclusively engaged in the manufacture of Conductors and related products.

09. Provision for current Income Tax and Differed Tax, if any, will be considered at the year end.

10. Accounting policies declared by the Company in Annual Accounts for the year ended 31 st March, 2018 have been consistently followed.

11. Figures of previous year have been re-arranged wherever necessary with out any financial impact on the results.

12. The above Un-audited financial results were reviewed by the Audit Committee and approved and taken on record by the Board of Directors at their meetings held on 1st February, 2019.

Place : Hyderabad Devendra Galada

Date : 1st February, 2019 Executive Director