In fact, the company has suffered a net loss of Rs 99.50 crore during the six-month period ended March 1998 against a net loss of 67.02 crore for previous period of 18 months ended September 1997. This was mainly on account of interest costs, non-realisable/recoverable inventories and receivables.

It may be recalled that a report was made by the company to the Board for Industrial & Financial Reconstruction (BIFR) consequent upon erosion of more than that 50 per cent of the net worth in September 1997. As a result of further losses in 1997-98, the company's net worth stands completely eroded. The company, will, therefore, be obliged to be referred to the BIFR forinitiation of necessary steps for revival.

According to the balance sheet, the company, which has a capital base of Rs 12.71 crore, has outstanding loan (including secured and unsecured) to the tune of Rs 228.64 crore, mostly taken from institutions and banks. Of which deposits from public including interest accrued and due amounted to Rs 38.78 crore. The directors have stated that the fixed deposits which the company had collected during 1996 (under its Alday Cash Bonds Scheme around Rs 32 crore) have fallen due for repayment. However, it maintained that ``the company was constrained from repaying these deposits in view of its adverse liquidity position.''

``Owing to the company's failure to repay the public deposits mobilised, the brand image of the company took a severe beating in the market place. This has resulted in a steep fall in the prescriptions of the licensed brands and in an overall decline in the value of company's brands,'' the directors report of the company said.

The directors haveclaimed that the company had been consistently growing at 25 per cent every year till 1996. ``To encash business opportunities and to maintain the tempo of growth, it was necessary for the company to invest on product introduction, technologies, facility upgradation etc in quick succession. The company had, therefore, to depend on high-cost private borrowings during 1994 through 1996,'' it said.

The company's profitability could not be maintained due to overall setback to the bulk drug industry. ``Thus the interest and repayment burden of these high cost borrowings had their telling effect on the liquidity and profitability,'' it further said on high interest burden and borrowings.

Moreover, during the period ended March 1998, the company's products were rejected by customers on account of poor quality, irregular operations of and stoppage of production at four of the company's plants and resulted in deterioration in the quality of sensitive raw material unfit for further processing.