Alok Industries Results Analysis 2020

Audited Financial Results (Standalone and Consolidated) for the Quarter and Year ended March 31, 2020. 

1. The eligible portion of admitted financial debt amounting  to RS 22,682.60 Crore has been assigned to JM Financial Asset Reconstruction Company Limited.
2. Reliance Industries Limited (RIL) has infused Rs 250 crore into the company against issuance of 83,33,33,333 equity shares, and Rs 250 core into the Company against issuance of 250,00,00,000, 9% Optionally convertible preference shares of face value of Rs 1 each.
3. Reduction of existing share capital- The company’s paid up equity share capital stands reduced, without any pay out to the shareholders, by reducing the face value of each issued and outstanding equity share of the company from Rs 10 to Rs 1. Accordingly, the resultant issued and paid up capital amount to Rs 221.08 crore as against Rs. 1377.34 crore as of the end of the last quarter.
4. The financial creditors have invoked the pledge on 13,59,11,844 equity shares and transferred the said shares to JM Financial Asset Reconstruction Company Limited acting as Trustees for JMFRC March 2018 Trust.
5. JM Financial Asset Reconstruction Company Limited has further assigned an amount of Rs 5000 crore from out of its assigned debt to Reliance Industries Limited. The Company has obtained in principle approval from the stock exchanges for allotments of 275,46,00,000 equity shares to Reliance Industries Limited and JM Financial Asset Reconstruction Company Limited (acting a Trustees for JMFARC-March-2018-Trust) arising out of conversion of a part of their respective assigned debt such that they will hold in aggregate an equity stake not exceeding 75% in the company.
6. As of the insolvency commencement date the company had an amount of Rs 11,623.94 crore receivables from trading debtors on account of sale of fabric (“Outstanding Trading Dues”). These Outstanding Trading dues have been fully provided for in earlier years. As per the approved Resolution Plan, receipts against these Outstanding Trading Dues are to be deposited in a designated escrow account (“Escrow Account”) to be opened in the name of the company for the sole benefit of the Financial Creditors. The Company has treated these Outstanding Trading Dues and its provision accordingly in its books of accounts.
7. Certain Creditors of the Company have filed petitions at different Forums, inter alia, praying for certain reliefs and the same are pending adjudication.
8. The Company’s current level of Operations, at about 30% of the capacity, is not an Indication of the future performance of the Company. The approved Resolution Plan for the company is yet to be fully implemented and the new management has not yet taken over. The new management is expected to set strategy and develop a business plan post which reliable projections of availability of future cash flows of the company and those supporting the carrying value of Property, Plant and Equipment will be available. Accordingly, Impairment testing under Ind AS has not been performed while presenting these results.
9. As per the approved Resolution Plan, the debt assigned to JM Financial Asset Reconstruction Company Limited does not carry any Interest for the first eight years from the Closing date (as defined in the approved Resolution Plan.)
10. Exceptional Income on account of gains recognized in accordance with the approved resolution plan comprises of :-
1. Extinguishment of Operational Creditors (including the Central Government, State Government or Local authority) as per the terms of Approved Resolution Plan – Rs 938.97 Crore.
2. Write-back of non-assignable loans of financial creditors – Rs 1093.51 Crore.
3. Extinguishment of Other Current and Non- current liability – Rs. 20.06 Crore.