United Spirits to report to BIFR, gets shareholders' nod
23 Jan 2016
Shareholders of United Spirits have voted in favour of the company being referred to the Bureau of Industrial and Financial Reconstruction (BIFR) as the company's net worth has eroded.
In a statement, the company, now owned by London-based Diageo, said that 99.9 per cent of the shareholders approved the resolution at an extraordinary general meeting held here on 22 January.
As per the 2014-15 annual results, USL made an operating profit of Rs154.26 crore but the net loss during the year resulting in erosion of net worth was due to certain exceptional and non-recurring items and not due to operational losses.
In accordance with the requirement of Section 23 of the Sick Industrial Companies (Special Provisions) Act, (SICA) 1985, the company should report to BIFR as its accumulated losses as of 31 March 2015, have resulted in erosion of more than 50 per cent of its peak net worth during the immediately preceding four financial years.
As per the audited annual accounts of the company for the financial year ended 31 March 2015, which were approved by the shareholders of the company at the 16th AGM held on 24 November 2015, the company's accumulated losses as at 31 March 2015, is 86 per cent of its peak net worth during the four financial years preceding the financial year ended 31 March 2015.
Accordingly, this EGM has been convened to consider and approve the report of the board of directors on such erosion and its causes, and the measures taken as per the relevant provisions of SICA.
