Haldia Petrochemicals Board to convene meeting to notify Board for Industrial and Financial Reconstruction?

03-May-13

A source in the company said the HPL board of directors will convene a meeting soon to notify the Board for Industrial and Financial Reconstruction (BIFR), known as graveyard of industrial units, as reported by Times Of India. The move comes after a 50% erosion of the company's peak net worth in the last four years of reference. A company is declared a sick unit once 100% of its net worth is eroded, while it is notified as a potential sick unit in case of 50% erosion. With a turnover of Rs 10,000 crore just a few years ago, HPL was Bengal's third-largest company after Coal India and ITC. It reported a net worth of Rs 500 crore in the financial year ended March 31, 2013 — less than 30% of the peak net worth of the petrochem giant in the preceding four financial years. According to the Companies Act, 1956, when 50% or more of a company's peak net worth during the immediately preceding four financial years is eroded at the end of any financial year, the board of directors is required to intimate BIFR by filing a mandatory reference within 60 days from the finalization of the audited annual accounts. HPL had a net worth of Rs 2,347 crore in 2009-10, Rs 2,097 crore in 2010-11 and Rs 1,479 crore in 2011-12.