The DRS envisages the company's net worth turning positive in 2001-02 and its accumulated losses to be wiped out in 2002-03, a recent BIFR order says.

"The entire funding of this DRS will be done via promoters' contribution, which will be obtained in the form of interest-free unsecured loans," it says.

Under the rehabilitation package, Allahabad Bank has been designated as the monitoring agency and EPL has been asked to submit half-yearly progress reports to the monitoring agency, the financial institutions as well as the board, it adds.

As per the scheme, a new barrel would be imported for the company's plant from Germany at Rs 30 lakh.

Also, a separate feeder line is being drawn up specifically for extrusions pvt ltd to ensure uninterrupted power supply to the production units, it says.

To ensure smooth and timelyimplementation of the rehabilitation scheme, EPL has entered into an agreement with the labour union to ensure long-term industrial harmony and productivity besides appointing qualified and experienced technicians for the factory, the order says.

These measures assume significance since the reasons for sickness of the company which the BIFR order states includes delay in obtaining power from the West Bengal State Electricity Board (WBSEB); poor qulaity of power, labour unrest, high turnover of technical personnel and shortage of working capital.

EPL is engaged in manufacturing plastic film laminates including HDPE and LDPE. During fiscal 1999-2000, the working capital requirements of EPL are expected to be Rs 70 lakh.

"This is well within the limit sanctioned by Allahabad Bank," the BIFR order says.

It adds, though, that the requirement for bank finance is estimated at Rs 172 lakh from 2000-01 onwards and "EPL will have to arrange for working capital accommodation from Allahabad Bank for futureoperations".

"The additional margin money required for the purpose will have to be arranged by the promoters from their competitors," it says.

Among the reliefs and concessions, the board has offered in the draft rehabilitation scheme directives to Allahabad Bank.

This includes waiving all liquidated damages and penal interest accrued up to March 31 1999; charge interest on loans with retrospective effect and to fund unpaid interest on term loans up to March 31 this year.

On the part of the sick company's promoters, the BIFR directive says, besides bringing in the fresh Rs 47 lakh for financing the entire project cost in the first year, they will take care of any other contingent liabilities not disclosed or known at the time of the sanctioning of the DRS scheme by the bench.

"Any shortfall in projection as regards profitability or cash flow should be met by infusion of additional interest free funds, not by diversion of working capital," the order says.

On the issue of EPL's profitabilityprojections, the order says these projections are based upon the assumption that capacity utilisation of the company's manufacturing plant would improve to 16 per cent from 7 per cent in the first year of rehabilitation.