Rough and Tough Tyres Limited

Company profile:Rough and Tough tyres Limited (RTTL) is in the business of rubber tyres
production.
The company faced financial crisis on account of continued losses
resulting into its inability to pay its loans. As the situation did not
improve, the then promoters of the company approached MRF Limited
for bailout & induction of capital in the Company trough interest free
unsecured advance. RTTL started incurring cash losses since beginning
and ultimately in the financial year ended on 31.03.2013, the Net worth
of RTTL was fully eroded. Accumulated losses of RTTL stood at Rs.
1939.88 lacs as per the audited statement of accounts for the year
ended 31.03.2013, as against its net worth of Rs. 1742.18 lacs.
The company has also suffered a lot due to labour unrest and
absenteeism. The technology used by RTTL is also obsolete and there is
a sudden increase in demand of motorcycle tyres. The above factors
have led to a market share erosion of RTTL. It was also noted that the
company lacks in operational efficiency front.
Suggest a corporate restructuring scheme for the company.
The financials of the company are as follows:
Balance sheet
All are in Lakhs
SOURCES OF FUNDS

31.3.1
0 31.3.11

31.3.12

31.3.13

Share Capital
Reserve & Surplus

1715.82
26.36

1715.82
26.36

1715.82
26.36

Profit & Loss A/c

Secured Loans

1360.96
199.62

1658.32
99.62

1651.24
NIL

1294.72
1875.5
6

1219.2
1402.6
6

1275.52
1366.4
6

1715.8
2
26.36
1939.8
8
NIL
1331.8
4
1134.
14

1485.9
0.5
17.66

1345.7
4
0.5
16.58

Unsecured Loans
Total

31.3.14

1715.8
2
26.36
1900.9
4
NIL
1219.1
8
1060.4
2
1327.9
4
0.5
39.28

31.03.15

1715.82
26.36
1810.78
NIL
1218.40
1149.8

Applications of
funds
Fixed Assets
Investments
Inventories

1777.76
0.5
19.82

1627.88
0.5
18.84

FINSTRUCT 2015

1380
0.5
51.82

Sundry Debtors
Cash & Bank
Balances
Loans & Advances
Less : Current liabilities
Total

83.78
23.58
46.24
76.12
1875.5
6

NIL

NIL

NIL

30.8
56.34
331.7
1402.6
6

29.82
51.7
219.12
1366.4
6

36.56
57.26
322.5
1134.
14

8.92

25.28

136.38
254.86
707.48
1060.4
2

158.82
147.68
614.3
1149.8

Income Statement:
Year ending
Net Sales
% growth
Other Income
Total
Expenditure
Purchases/Raw
Material
consumed
Stores, & Packing
Materials
Power & Fuel
Employees
Other Expenses
EBIDTA
Less : Interest
Less :
Depreciation
Add: Extra
Ordinary items
Less
Provision/Paymen
t of tax
Profit/(Loss)
After taxation
Add: Brought
forward from
previous year
Balance carried
to Balance Sheet

31.3.1
31.3.1
31.3.1 31.3.1 31.3.1 31.03.
0
1
2
3
4
15
885.16
285.98 1079.2 522.64 1367.9 1765.88
nil
-1.36
5.54
-1.04
3.24
0.58
10.38
0.88
1
0.96
148.3
21.92
895.54
286.86 1080.2
523.6 1516.2
1787.8

8.08

10.12

27.94

84.46

34.26

18.58

48.1
250.66
348.88
55.9
183.92
98.9

14.36
106.98
174.12
37.54
-56.26
88.98

50.62
304.5
361.84
106.34
228.96
78.96

19.98
200.78
225.7
66.98
-74.3
72.82

60.84
416.5
418.34
333.7
252.56
nil

62.62
559.86
536.24
380.38
230.12
nil

151.72

151.46

142.1

141.14

213.62

139.96

nil

nil

nil

nil

nil

nil

nil

nil

0.84

0.66

0.82

0.38

-67.56

-297.36

-1293.4

1360.96

1360.96

1658.32

7.08
1658.3
2
1651.2
4

-288.64
1651.2
4
1939.8
8

FINSTRUCT 2015

38.94
1939.8
8
1900.9
4

90.16
1900.94
1810.78