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Notes to Accounts of GSL Nova Petrochemicals Ltd.

Mar 31, 2014

1.1 The company has issued only One class of shares referred to as Equity shares having face value of Rs.5/-. Each Holder of One share is entitled to One vote per share.

1.2 In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

1.3 Under a scheme of the demerger, total paid up capital of the company was reduced to Rs.13,50,00,000/- as against original paid up capital of Rs.27,00,00,000/- by reducing the face value of share from Rs.10 per share to Rs.5/- per share.

2.1 Security :

@ Term Loans under consortium finance are secured by first charge on Fixed Assets (through mortgage/hypothecation of all immovable & movable assets), both present & future; subject to prior charge in favour of banker/other on specified assets for working capital loans/other loans and secured by second charge on book debt & stocks and further secured by personal guarantee of Promoter Directors & Corporate Gurantee of Promoter''s Group Companies.

2.2 Interest:

In respect of Term Loans under consortium finance the company is liable to pay fixed interest @10.75% p.a. and in case of Funded

Interest Term Loan (FITL) interest Shall be payable @9.75% p.a on monthly basis.

2.3 Default in payment of Interest & Installments:

The Company has not paid total amount of Principal of Rs.350,426,887/- as on 31st March, 2014 ( Previous year Rs 377,706,735/-) and total interest of Rs.1,13,795,419/- to various banks as on 31st March, 2014 (Previous year Rs 68,067,857/-).

2.4 The Company has defaulted in payment of principal and interest for the whole year and hence the entire trem loan is due for payment as per the terms of sanction.

2.5 Compound interest, penal interest & liquidated damages have not been considered on all borrowings, amount of which is unascertainable, pending confirmation / reconciliation.

3 Deferred Tax

The company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the income tax act. However, as a matter of prudence, the company is not recognising the deffered tax asset as provided in the Accounting Standard-22 issued by the Institute of Chartered Accountant of India.

3.1 Security :

@ Working Capital Loans under consortium finance are secured by First Charge on Book Debts and Stocks, and second charge on fixed assets and further secured by personal guarantee of the Promoter Directors and Corporate Guarantee of Promoter''s Group Companies.

3.2 Default in payment of Interest & Cash Credit:

@ The Company has not paid total amount of Principal of cash Credit Rs. 235,817,211/- as on 31st March, 2014 ( Previous year Rs 235,835,862/-) and total interest of Rs.95,454,215/- to various banks as on 31st March, 2014 (Previous year Rs 51,376,999/-).

3.3 @ Company has defaulted in payment of interest and Short term bank borrowing Accounts not renewed and hence it is due for payment on demand.

4.1 Default in payment of Interest on Term Loans & Working Capital Loans:

The Details in respect of the Defaults made by the Company in payment of Interest on Term Loan & Interest on Cash Credit has been given in Note No.4.4 & Note No. 7.2 respectively.

5. CONTINGENT LIABILITIES:

Particulars 2013-14 2012-13 (Rs.in Lacs) (Rs.in Lacs)

a) Letters of Credit Outstanding Nil Nil

b) Income Tax demands disputed in appeal by the Company/ Income Tax Authorities 23.67 234.72 (Against which the Company has paid amount of Rs.6,23,979/-)

c) Bank Guarantee Nil 1.63

d) Value Added Tax demands disputed in appeal by the Company 14.69 14.69 (Against which the Company has paid amount of Rs.12,00,000/- )

e) Excise Duty demands disputed in appeal by the Company/ Excise Authorities 2364.92 2128.10 (Against which the Company has paid amount of Rs.400,736/-)

f) Textile Cess Demands disputed pending with Textiles Committee, 50.90 50.90 Government of India, Ministry of Textiles.

g) Service Tax demand disputed in appeal by the Company/Authority 41.96 41.96 (Against which the Company has paid amount of Rs.503,046/-)

h) Claims not acknowledged as debts by the company. 469.12 469.12

i) Show Cause Notices received from various authorities 28.87 38.64

j) Employees Demands pending before Labour Courts Amount not Amount not ascertainable ascertainable

k) In respect of restructured Debts under CDR mechanisum, the banks will have right Amount not Amount not to recompense in respect of waivers/sacrifice made by them under CDR restructuring ascertainable ascertainable

6. Debtors includes Rs. 2,642/- (Previous Year Rs. Nil) due from private companies in which some of the directors are interested as directors.

7. Based on the principles for determination of segments given in Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the company has identified its business segment as primary segment. "Others" represents income from Trading of Cloth. There is no reportable secondary segment as none of the conditions as laid down for determining the geographical segments are satisfied.

8. Related Party Disclosures

a) Key Management Personnel

Sr. No. Name Designation

1 Shri Shyam Gupta Chairman

2 Shri Sunilkumar Gupta Managing Director

b) List of Other Related Parties with whom transactions have taken place during the year

Sr. No. Name

1 Gupta Dying and Printing Mills Pvt. Ltd.

2 Gupta Synthetics Limited

3 Shubhlaxmi Dying and Print Mills P. Ltd

4 Poly Coat India Pvt. Ltd

5 Ellora Syntex Pvt. Ltd

6 Sharp Synthetics Pvt. Ltd

7 Basant Bahar Properties Pvt Ltd

8 Millennium Infosoft Pvt. Ltd.

9. The amount of Exchange Difference

Debited to Profit and Loss Account Rs. Nil/- (Previous Year debited to Profit and Loss Account Rs. 26,780/-)

10. Impairment of Asset

During the year, the company has impaired it''s all assets to the tune of Rs. Nil (Previous Year Rs. Nil)

11. Borrowing costs attributable to the acquisition or construction of Qualifying Assets amounting to Rs. Nil (Previous Year Rs. Nil) is capitalized by the company

12. Balances of Debtors, Creditors and Advances etc. are subject to confirmation and reconciliation wherever required.

13. Figures of the previous year have been regrouped and/or rearranged wherever necessary.

14. In the opinion of the board, Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business.

Note : Previous year''s figures have been shown in brackets.


Mar 31, 2013

1. Debtors includes final (Previous Year Rs. 10,800,924/-) due from private companies in which some of the directors are interested as directors.

2. Based on the principles for determination of segments given in Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the company has identified its business segment as primary segment. "Others" represents income from Trading of Cloth & Chemical. There is no reportable secondary segment as none of the conditions as laid down for determining the geographical segments are satisfied.

3. Related Party Disclosures

a) Key Management Personnel

Sr. No. Name Designation

1 Shri Shyam Gupta Chairman

2 Shri Sunilkumar Gupta Managing Director

b) List of Other Related Parties with whom transactions have taken place during the year Sr. No. Name

1 Gupta Dying and Printing Mills Pvt. Ltd.

2 Gupta Synthetics Limited

3 ShubhLaxmi Dying and Print Mills P. Ltd

4 Poly Coat India Pvt. Ltd

5 Ellora Syntex Pvt. Ltd

6 Sharp Synthetics Pvt. Ltd

7 Basant Bahar Properties Pvt Ltd

8 Nandan Dyeing Prints Povt. Ltd.

9 Aviva Power 8i Projects Pvt Ltd

10 Millennium Infosoft Pvt. Ltd.

11 Gupta Tex Print Pvt. Ltd.

12 Numech Synthetics Ltd.

13 Micro Filament Pvt Ltd

4. The amount of Exchange Difference

Debited to Profit and Loss Account Rs. 26,780/- (Previous Year debited to Profit and Loss Account Rs. 3,51,387/-)

5. Impairment of Asset

During the year, the company has impaired it''s all assets to the tune of Rs. Nil (Previous Year Rs.Nil)

6. Borrowing costs attributable to the acquisition or construction of Qualifying Assets amounting to Rs. Nil (Previous Year Rs.Nil) is capitalized by the company

7. Balances of Debtors, Creditors and Advances etc. are subject to confirmation and reconciliation wherever required.

8. Figures of the previous year have been regrouped and/or rearranged wherever necessary.

9. In the opinion of the board, Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business.

Note : Previous year''s figures have been shown in brackets.


Mar 31, 2010

1. Pursuant to the scheme of Arrangement for Demerger(the Scheme),as approved by the Honble Gujarat High Court on 27th August,2009(being effective from the date of filling of order with the Registrar of Companies),the Unit-II situated at Survey Number 395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad is demerged as a going concern w.e.f.1st April,2007,being the appointed date. In terms of the scheme, the assets and liabilities relatable to the demerged undertaking have been transferred at value appearing in the books of accounts as on the closure of business on 31st March, 2007. Accordingly, net asset of Rs.2018 Lacs were transferred to the resulting entity.

2. CONTINGENT LIABILITIES:



2009-2010 2008-2009 (Rs. in Lacs) (Rs. in Lacs)

a) Letters of Credit Outstanding 1684.34 1588.85

b) Income Tax demands disputed in appeal by the Company/ Income Tax Authorities 272.60 272.60 (Against which the Company has paid amount of Rs.20 Lacs)

c) Disputed demand of Custom Duty Nil Nil

d) Excise Duty demands disputed in appeal by the Company/ Excise Authorities 2994.21 2741.61 (Against which the Company has paid amount of Rs. 202.77 Lacs)

e) Textile Cess Demands disputed pending with Textiles Committee, Government of India, 50.90 50.90 Ministry of Textiles.

f) Service Tax demand disputed in appeal by the Company/Authority 42.75 Nil

g) Claims not acknowledged as debts by the company 1.12 1.12 h) Show Cause Notices received from various authorities 169.53 158.66

i) Employees Demands pending before Labour Courts Amount not Amount not ascertainable ascertainable



3. The Company has pending export obligation to be fulfilled during the specified period in lieu of items imported under concessional / nil rate of custom duty. The Liability towards custom duty payable and interest thereon in respect of unfulfilled export obligation as on 31st March 2010 is Rs. 694.75 Lacs (Previous Year Rs. 1326.32 Lacs).

4. Debtors includes Rs. 343.82 lacs (Previous Year Rs.379.22 Lacs) due from private companies in which some of the directors are interested as directors and Rs. Nil (Previous Year Rs. Nil) due from firms in which some of the directors are interested as partners.

5. Loans and Advances includes Rs. Nil Lacs (Previous Year Rs. Nil) due from private companies in which some of the directors are interested as directors and Rs. Nil (Previous Year Rs. Nil) due from firms in which some of the directors are interested as partners.

6. Secured loans where repayments are stipulated include Rs. 413.00 Lacs (Previous year Rs. 272.40 Lacs) repayable within a period of one year.

7. Unsecured loans where repayments are stipulated include Rs. Nil (Previous year Rs. Nil) repayable within a period of one year.

8. Traveling, Conveyance & Vehicle Expenses include Directors Traveling Rs. 12.30 Lacs (Previous Year Rs. 10.01 Lacs).

9. Maximum debit balance in Non Schedule Bank during the year is Rs. 0.01 Lacs (Previous year Rs. 0.04 Lacs).

10. Exceptional items consist of amount written back on account settlement of some of the loans of Rs.79.88 Lacs (Previous year Rs. Nil Lacs) and interest thereon Rs.26.20 lacs (Previous year Rs. Nil Lacs).

11. Based on the principles for determination of segments given in Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the activities of the Company revolve around the main business and as such there is no separate reportable business or Geographical Segment.

*Note: Pursuant to the scheme of Demerger, the company issued and allotted 2,70,00,000 equity shares to the share holders of Nova Petrochemicals Ltd. in the ratio of one equity share of face value of Rs.5 each fully paid up in the company for every one equity share of Rs.10 each fully paid up held by the shareholders of Nova Petrochemicals Ltd, which have been considered as issued on the first day of the year for calculating Weighted average number of shares.

12. Related Party Disclosures

a) Key Management Personnel

Sr. No. Name Designation

1 Shri Shyam Gupta Chairman

2 Shri Sunilkumar Gupta Managing Director

3 Shri Ved Prakash Chiripal Director**

4 Shri Jyoti Prasad Chiripal Chairman** **

Resigned w.e.f. 5th October, 2009. Pursuant to scheme of demerger (the Scheme).

b) List of Other Related Parties with whom transactions have taken place during the year

Sr. No. Name Sr. No. Name

1 Gupta Dying and Printing Mills Pvt. Ltd. 2 Gupta Synthetics Limited

3 ShubhLaxmi Dying and Print Mills P. Ltd 4 Poly Coat India Pvt. Ltd

5 Aviva Industries Ltd 6 Ellora Syntex Pvt. Ltd

7 Sharp Synthetics Pvt. Ltd 8 CIL-Nova Pertochemicals Ltd

9 Basant Bahar Properties Pvt Ltd 10 Vishal Fabrics Pvt Ltd

13. The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However as a matter of prudence, the company is not recognizing the deferred tax asset as provided in the Accounting Standard 22 issued by The Institute of Chartered Accountant of India.

14. The amount of Exchange Difference

Credited to Profit and Loss Account Rs. 2.54 Lacs (Previous Year Debited to Profit & Loss Account Rs. 51.55 Lacs)

15. The Gross Block of Fixed Asset includes Rs.3369.62 Lacs (Previous Year Rs.Nil Lacs) on account of revaluation of Freehold Land Carried out on 31/03/2010.

16. Based on the information available with the company following is the details of parties to the extent to which they could be identified as Small Scale and ancillary undertakings.

a) Sundry Creditors include Rs.94.19 Lacs (Previous year Rs. 117.57 Lacs) due to Small Scale and ancillary concerns.

b) The undertakings to whom amounts outstanding for more than 30 days as on 31st March, 2010, in respect of Small Scale and ancillary concerns where such dues exceed Rs. One Lac are as under:

Akshat Trader, Anushree Paper Packs Pvt. Ltd., Arjun Packaging,Flexi Bond Industries, Nirmal Tubes & Containers P. Ltd., Pooja Paper Craft, Pooja Plastic Ind., Rajhans Trader, Wonder packaging, Wimpack, Jagdishwar packaging.

17. Balance in Current Account with Scheduled Banks includes Rs. 3.31 Lacs (Previous Year Rs. 4.66 Lacs) in the unpaid dividend account with various banks.

18. The Company has not received information from vendor regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid/payable under this act have been not given.

19. Sundry Debtors are Secured to the extent of Rs. 25.33 Lacs (Previous Year Rs. 8.24 Lacs)

20. Information pursuant to provision of paragraphs 3 and 4 of part II of Schedule VI Companies Act, 1956. (As certified by Directors):

21. Balances of Debtors, Creditors, Advances etc. are subject to confirmation and reconciliation wherever required.

22. Figures of the previous year have been regrouped and/or rearranged wherever necessary.

23. In the opinion of the board, Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business.

Note : Previous years figures have been shown in brackets.

 
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