TaxTMI 
TaxTMI 
2019 (4) TMI 1797
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....g to this Applicant a Revised Resolution Plan was submitted on 28.08.2018 by improving the offer from Rs. 3,63,59,177/- to Rs. 4,10,59,179/-. Thereafter, on 05.10.2018 again a Revised Fourth Resolution Plan was submitted with an offer of Rs. 5,53,34,004/-. From the side of the R.P. it was insisted to improve Corporate Insolvency Resolution Process costs and also to make provision of claims of Customs Department. As a consequence on 25.10.2018 earlier offer was revised to Rs. 5,67,09,545/. Even after the said revision to the shock of the Resolution Applicant it was informed by R.P. on 06.11.2018 that the final decision of Approval of Resolution Plan of another entity had been conveyed. This Resolution Applicant has therefore, moved this Application that the other Resolution Plan be rejected because natural justice not granted to this Applicant and that his Final Resolution Plan be accepted. 2.1 Be that as it was, the latest development is that the Resolution Plan of one Mr. Ajay Nair is no more in existence being allowed to be Withdrawn, as a consequence the only Resolution Plan for due consideration is of Osian India (Mr. Sandeep Mehta Proprietor). The R.P. has therefore, moved on....
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....7,400 Other Current Asset 12,544,623 10,231,535 411,469 Less: Current Liabilities & Provision 55,732,186 50,690,093 31,269,288 41,945,733 37,238,920 34,148,896 OSIAN (INDIA) (B) PROFIT & LOSS A/C FOR THE YEAR ENDED 31-03-2018, 31-03-2017 & 31.03.2016 PARTICULARS 31.03.2018 31.03.2017 31.03.2016 Unaudited (Rs) Audited (Rs) Audited (Rs) INCOME: - Sales Turnover 153,519,025* 196,587,571 151,471,056 Total Income 153,519,025 196,587,571 151,471,056 EXPENDITURE: - Cost of Goods sold 129,484,940 176,977,426 135,417,807 Administrative Expenses 6,545,151 11,959,704 8,588,687 Selling Expenses 4,052,663 2,546,448 2,340,093 Financial Expenses 82,152 12,936 423,873 Depreciation 152,000 173,683 207,283 Total Expenditure 140,316,905 191,670,197 146,977,743 NET PROFIT BEFORE TAX 13,202,120 4,917,374 4,493,313 Tax 3,300,530 1,228,827 1,141,318 NET PROFIT AFTER TAX 9,901,590 3,688,547 3,351,995 *Net of taxes value (C) Executive summary ♦ The amount proposed to be paid will be a one time payment to all the proposed settlers within a period of 45 days * from the date of approv....
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....erection of PVC plant and bringing it to the working condition will incur additional cost of approx Rs. 25 lakhs. Further it is not feasible to run PVC Plant as PVC Stabilizer has an over capacity in India and looking into health and environment hazard and new norms which are put in place to phase out lead based PVC Stabilizer. ♦ Other estimated cost of Rs. 53.72 Lakhs to bring plant to a proper running condition. (D) For itemised expenses table is given below. Sl No. Particulars Estimated Amount 1 Fabrication of Existing Plant (Repair & safety), wiring PLC, Part Automation 47,00,000/- 2 Erection of PVC Stabilizer Plant with modification (Reduced capacity) 25,00,000/- 3 Cleaning & demarcation of equipments and facility 8,26,000/- 4 Safety Audit & Safety Measures (Since 1999) 2,13,000/- 5 Sanitation and Hygienic Measures (Under Swatch Bharat & Defection free environment) 98,000/- 6 Debottlenecking of Existing paint dryers plant 32,00,000/- 7 Health audit of workers 85,000/- 8 Renewal of licence (Explosive, Solvent Handling) Post December 2018 1,50,000/- 9 Refurbishment of Existing Lab 8,00,000/- Total additional expense to run....
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....dues Assistant Commissioner of Sales Tax (JAG-VAT-D-008) 23,213,315 22,192,393 1,375,000 Commissioner of Customs, JNCH, Nhava Sheva - 2,157,809 111,000 ESIC Employees Contribution 19,427 Claims not submitted 19,427 ESIC Employers Contribution 53,661 53,661 Provident Fund Employees 1,285,288 1,285,288 Provident Fund Employers 2,689,494 Profession Tax Payable 583,163 TDS Payable 5,473,626 Local Body Tax Jalgoan 2,421,218 Water Charges Payable 358,785 Vat Payable - AMPL 1,751,603 Property Tax Payable 250,058 Power Charges Payable 767,111 - sub-total 38,866,749 24,350,202 2,844,376 Non-Government dues Trade Payables (Advance Oleochem) 9,581,908 10,927,775 6,000,000 Trade Payables (irregular accounts) - 7 No. 1,918,092.16 Claims not submitted Trade Payables (small accounts-74 Nos.) 2,800,000 Trade Payables (regular accounts) 4,100,000 Trade Payables (Balance accounts) 17,886,843 Trade Payables (Ba....
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....r. Sandeep Mehta will act as the Managing Director and technical Director with vast experience in the industries will be hired for the Company. Mr. Sandeep Mehta who is heading the operations at Osian India has in-depth knowledge of the chemicals manufactured by and is in the Aryavart Chemicals Private Limited has been dealing with. Mr. Sandeep Mehta credibility in the market place and first hand knowledge on the same line of business will help the Company to procure materials on credit at lower rate and recover from the losses. (I) Regulation 37(1) Implementation strategy Regulation 37.(1) Measures for implementing of the Resolution Plan Resolution plan offered by the Mr. Sandeep Mehta (a) transfer of all or part of the assets of the corporate debtor to one or more persons; NCLT will transfer all the assets in the books of Corporate Debtor clean of any charge on passing the order. (b) sale of all or part of the assets whether subject to any security interest or not; NCLT will give us clear title of all the assets in the books which are subject to lien or on which any security charge is created on passing the order. Any asset sales initiated by old promoters in last 2 years ....
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....and State Governments and other authorities." Necessary approvals for running the plant or transfer of ownership of plant will be done by NCLT Electricity NOC, Water Works NOC Required for reconnection, Necessary amendment in MIDC shall be done in our favour by NCLT This will be subject to the limitation of the statutory liabilities accepted to be settled by us in the Resolution Plan. (J) Regulation 38 Resolution Plan Regulation 38. Resolution plan. Resolution plan offered by Mr. Sandeep Mehta (1) A resolution plan shall identify specific sources of funds that will be used to pay the - The following are the Sources of Funds Bank Balances (as on date of the submission of proposal) Rs. 4,64,00,000/- Fixed Deposits with Bank Rs. 1,40,00,000/- Total Rs. 6,04,00,000/- Bank Certificate and Fixed Deposit Certificate attached. (a) insolvency resolution process costs and provide that the insolvency resolution process costs will be paid in priority to any other creditors; Insolvency resolution process costs will be paid in total and on priority to any other creditors. Mr. Sandeep Mehta has adequate funds in the bank and/or adequate sources of fund to pay off ....
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....esses the cause of default The following are the reasons identified by us as the reason of default ♦ Poor Raw material selection and price of procurement being very high making it uncompetitive in the markets and hence supplies were made to B class customers. ♦ Inefficiency of Plant and Management to ramp-up capacities against the expenses incurred. ♦ Excess back office manpower. ♦ Not changing according to the change in PVC Stabiliser industry. ♦ Inappropriate selection of Raw materials specifically to PVC Stabiliser industry. ♦ Excess ideal capacity of PVC stabiliser plant. ♦ Inadequate knowledge of Metal and Metal oxide trading and its trend. ♦ High cost of debt funds leading to interest burden. ♦ Complete erosion of credibility in the market of Directors over past 10 years. ♦ Bottlenecks in the plant. ♦ Under utilisation of the existing workforce. ♦ Over dependence on couple of customers ♦ Low turnover as compared to expenses ♦ Poor planning of production ....
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....d recover from the losses (K) Regulation 39 - Approval of the resolution Plan (1) A prospective resolution applicant has submit an (a) affidavit of eligibility under section 29A Affidavit of eligibility under section 29A attached. (b) undertaking to provide additional funds under regulation 38(1) Bank Certificate and Fixed Deposit Certificate attached for validating the sources of Funds. Certificate of Net worth Attached. (c) undertaking by the resolution applicant that every information and records provided in connection to resolution plan is true and correct. If false information is given applicant shall be ineligible in the CIRP process, forfieture of refundable deposit and attract penal action under the code. Undertaking duly signed with the detailed resolution plan above. (8) New Management of CD may make an application to AA seeking assistance of local district administration for implementation of the resolution plan. Necessary approvals for running the plant or transfer of ownership of plant will be done by NCLT within a reasonable period for us to commence operations. Further NCLT will give appropriate standing directions to all the authorities involved i....
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....tificate for Net worth of Mr. Sandeep Mehta and Mrs Anita Sandeep Mehta. (4) Photographs of the existing state of the Factory which were captured during the Plant visit. (N) Other Key Concerns ♦ Fabrication of the machinery to remove the damages to be carried to the plant and machinery and maintenance of the factory building to bring the factory to proper condition and improve the quality of finished goods. ♦ Assessment of New range of Chemicals that can be manufactured ♦ Removing dependency on the single customer and finding new buyers and market. ♦ Erection of PVC plant with reduces capacity and alternate feedstock and bringing it to the working condition to add the line of business ♦ Maintaining the labour workforce with health and hygiene conditions ♦ Pumping in adequate additional working capital required to complete orders in hand if any and procure Raw Materials at competitive price ♦ Automation of plant ♦ Complete cleaning & Maintenance ♦ Shifting of back operation to site for reducing cost ♦ Fire safety Audit ♦ Structural Audit ♦ Health audit of workforce ♦ All Statut....
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....ethodical scrutiny of Financial Statement is expected before concurring with approval of the CoC. Per contra, absence of recording of subjective satisfaction may lead to situation that, being sanctioned without judicial analysis, thus may either not be sustainable in the eyes of law, or may not yield desired results. There are no two views, and must not be, that this I & B Code provides greater accountability both on the Insolvency Professional, as also on CoC, mainly comprise of lender Banks. Their approval of a Resolution Plan ought to be judged with due diligence. To sum up, in our humble interpretation the recording of an analytical 'satisfaction' is a condition precedent before granting of approval. 7. To sum up the above discussion, the Resolution Plan as approved by the Committee of Creditors is by and large hereby sanctioned by this Order in view of the recent judgment of the apex court in K Sashidhar v. Indian Overseas Bank [2019] 152 SCL 312. The Hon'ble Supreme Court in the said order has made clear that the role of CoC is quite vital for deciding the fate of the company It has been held that the Adjudicating authority is not required to go into the mer....