Rubber Chemicals Ltd

Rubber Chemical Ltd. By Group - 5

Analysis Outcome for the Company  Delay in import license reason is fake.

Even if you had got it late, why didn’t the promoter not complete the project?  This is either fictitious or lots of money is held up by way of receivables either of which is bad!!  Other income has increased. This is the main reason why profit has increased and not because of sales!!

Reasons for Cost Overrun  East Germany going Capitalist  Transition to Dow Chemicals as the provider for    

technical knowledge Pre Op Exp increase is more than Capital Cost. Implies that no project has been happening after 1992!! No other expense has increased except Pre op expenditure Since more debt has come, net worth of the company has become negative. Promoter has no incentive to continue the project since all cash inflow will go towards servicing the debt.

 Project has been completed by 1992, as

increase in preliminary is more than increase in land &building and plant & machinery cost  No increase in tangible assets  Turnover declined in 1995, current assets increases absorbed by receivables why?  Market is bad  Company showing fictitious asset

 Interest getting capitalized – increase in    

cost Term loan is shown in current liabilities No money left for completion of project From 96 CA decreased and then we see project capital cost increasing So got term loan but used for other purpose – Diversion of funds

 Loan – Diverted to other person – That person put in as equity  Sales went down because there is no working capital and not because of market condition  BIFR – said project is unviable  NCA negative after 96

IGPL  Concentrate on view of project:  

Should we finance or not finance Reasons