MODERN INSULATORS Share price

Modern Insulators Ltd. (hereinafter referred to as MIL) wasincorporated as a Public Limited Company on 1st May 1982and the certificate for Commencement of Business from theRegistrar of Companies Rajasthan at Jaipur was obtainedon 15th May 1982.MIL promoted in the Joint Sector by Shri H.S.Ranka andRajasthan State Industrial Development and InvestmentCorporation Limited (RIICO) is engaged in the manufactureof various types of High Tension (HT) Insulators upto 400KV with an installed capacity of 5000 tonnes per annumproducing Sectional and Post Insulators Solid CoreInsulators for Railways and Bushings for TransformersApparatus Insulators Solid Core Insulators including LongRod and Line Post Insulators at Abu Road District Sirohiin Rajasthan in technical collaboration with Siemens AGGermany.The project was set up at a cost of Rs.3310 lakhs with anoverrun in cost of Rs.680 lakhs due to adverse exchangefluctuation and additional provision of expenditure anddelay of about 2 years which was financed by term loansfrom institutions/banks aggregating Rs.2155 lakhs CentralSubsidy of Rs.25 lakhs funded interest of Rs.261 lakhs andequity share capital of Rs.869 lakhs includingoversubscription of Rs. 119 lakhs.Since inception MIL had been facing technical problemsresulting in high degree of rejections at various stages ofmanufacture. With a view to helping MIL to overcome itsresultant liquidity problems and stabilise operations on aviable footing the institutions have been extendingreliefs in the past by way of interest deferments andreschedulement of principal repayments. However despitegrant of reliefs / concessions from time to time therewas no appreciable improvement in the performance of MILand it continued to incur losses. Based on the auditedaccounts for the year ended 30th April 1991 a referencewas made to BIFR under Sec. 15 (ii) of the Sick IndustrialCompanies (Special Provisions ) Act 1985 (SICA) on thebasis of which it was registered with BIFR. However basedon another reference made to BIFR on the basis of itsaudited accounts for the period ended 31.10.1992 whichindicated positive Net Worth the case was deregisteredwith BIFR.MIL has since overcome the technical problems faced in thepast and improved its capacity utilisation. However due toliquidity constraints MIL again approached theinstitutions with revival proposal in August 1994envisaging expansion in installed capacity to 6000 tpa anda package of reliefs/concessions. Institutions and Banksagreed to provide reliefs and concessions in respect ofterm loans by way of waiver of penal interest liquidateddamages compound interest and also 50% of the simpleinterest outstanding as on 28.2.1993 and accepting paymentof balance simple interest in 3 instalments payable by June1996 besides revision of repayment schedules at netdocument rates to be paid during the years 1997-98 to2002-03 as also certain reliefs in respect of workingcapital facilities subject to certain terms and conditionsas per details given elsewhere in the LOF including thewaiver of outstanding royalty dues and appointment of JointManaging Director by Siemens AG Germany and promotersraising funds by way of Rights Issue aggregating Rs. 1304lakhs for part financing the scheme.