annual report 2011-12 - Heavy Engineering Corporation Limited

ANNUAL REPORT 2011-12
NOTE NO. 29
NOTES ON ACCOUNTS
1. (i) The accounts of the company have been prepared based on “going concern – basis”. Due to prolonged suffering of losses coupled with huge
negative net worth, the company was declared sick and was referred to BIFR on 24.2.1992. BIFR sanctioned a rehabilitation package on
26.8.96 and the same was approved by Govt. of India on 7.2.1997. Subsequently BIFR declared that the scheme had failed and ordered for
winding up of the company on 6.7.2004.
(ii) Against the aforesaid winding up order, the company filed a writ petition No. 4513/04 on 18.8.04 before the Hon’ble High Court of Jharkhand
for quashing/staying the winding up order. Hon’ble High Court of Jharkhand gave opportunity to Govt. of India, Govt. of Jharkhand and HEC to
submit proposals for revival of HEC through affidavits before the Hon’ble Court. Thereafter a number of hearings were held between 9.9.2004
to 13.11.2009 and ultimately Hon’ble High Court of Jharkhand vide order dated 13.11.2009 gave direction to the Govt. of India, Govt. of
Jharkhand and the HEC Ltd. and other concerned parties to act in terms of Revival package approved by Hon’ble Court and dropped the
winding up proceeding being CP No. 5 of 2004 with WP( c) No. 4513 of 2004 with hope and wish that past will not be repeated and HEC,
the Nations pride and mother of Industries would fulfill its object of serving the nation.
During the pendency of this proceeding before Hon’ble High Court of Jharkhand the following Revival Packages had been approved by Govt.
of India and Govt. of Jharkhand. The details of such proposals and present status of implementation are as follows:-
A. Status of Revival package approved by Govt. of India
(Recommended by BRPSE on 7.10.2005 and approved by Govt. of India on 15.12.2005)
Assistance approved by Govt. of India
Status of Implementation
a) Conversion of plan loan of ` 15.27 crores as on 31.3.2005 in to equity. Implemented in March, 2006
b) Waiver of non-plan loan and interest on plan and non-plan loan as on 31.3.2005 of ` 1101.02
crores.
Implemented in March, 2006
c) To provide non-plan loan of ` 102 crores, in the form of Non Plan loan of ` 92.03 crores, plan
loan of ` 4.985 crores which will be repaid by the company in three years and also ` 4.985 crores
as equity.
Implemented in March, 2006
(Sl.No. a,b,c was approved by Hon’ble High Court of Jharkhand on 13.7.2006)
d) To mobilise resources (approx. ` 330.00 crores) by transferring residential and non-residential
buildings already on rent with the state government to the Jharkhand Government, settlement of
residences on long term lease with the occupant employees and ex-employees of the company,
settlement of commercial and institutional areas and privatization of schools and hospital.
B. Revival Scheme approved by Govt. of India in September – 2008
Company generated ` 85.44 crores from long
term lease of residential quarters
a) Conversion of Plan Loan (` 5.825 crores) and Non Plan Loan
(`102.21 crores) into Equity.
b) Conversion of outstanding interest of ` 44.81 crores up to
18.9.2008 into Equity
c) Enhancing the Govt. guarantee from ` 150 crores to ` 253
crores for meeting working capital.
d) To settle the liability of ` 79.06 crores of CISF by transferring
commensurate amount of land of the company to the CISF.
Implemented in March,2009
Implemented in March,2009
Implemented in March,2009
158 acres of land has been transferred to CISF in March, 2009 for liquidation of dues
of ` 79.06 crores. In addition, Waiver of the interest and penal interest on CISF dues
amounting to ` 37.91 crores and freezing of interest and penal interest amount after
31-7-2008 was approved by Govt. of India in Sept-08 and implemented
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