Notes to Accounts of Gupta Synthetics Ltd.

Mar 31, 2015

1. The Company has been in losses and as on year ended 31st March, 2015 the accumulated losses of the Company has exceeded its entire net worth, making it a 'Sick Industrial Company' as per the definition of Sick Industrial Companies (Special Provisions) Act, 1985.

The Company had filed reference under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 with the Board of Financial and Industrial Reconstruction on 18.04.2012 and said reference was registered on 26.04.2012.

Further the company was declared a 'sick industrial company' under Section 3(1)(o) of Sick Industrial Companies (Special Provisions) Act, 1985 on its hearing dated 29.05.2013 and appointed Industrial Development Bank of India (IDBI) as the Operating Agency u/s. 17(3) of the Act to prepare a rehabilitation scheme for the company.

However as per the order dated 04.08.2015 the Bench of Board for Industrial and Financial Reconstruction held on 01.07.2015 that the case stands abated in terms of third proviso of sub-section(1) of Section 15 of SICA,1985. And further stated that all the creditors including statutory authorities are at liberty to recover their dues, in accordance with law.

2. CONTINGENT LIABILITIES (Rs. IN LACS):

As at As at 31.03.2015 31.03.2014

Bank Guarantees Nil 41.68

Claims against the company not acknowledged as debt* 521.99 521.99

Gratuity 60.72 31.71

*Note: The company has been legally advised that the demands raised are likely to be either deleted or substantially reduced and accordingly no provision has been made.

# The company has provided for gratuity of employee at Dadra Plant during the year.

3. The company is engaged in manufacturing Partially Oriented Yarn (POY), Fully Drawn Yarn (FDY) Polyester Texturised Yarn, Polyester Draw Twisted Yarn, Polyester Twisted Yarn and Nylon Yarn.

4. Previous Year's Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

5. Trade Receivables, Trade Payables, Advances from customers, Deposits with Banks, Unsecured Short Term Borrowings and Long Term & Short Term Loans and Advances are subject to confirmation.

6. Interest Receivable comprised of Interest Subsidy under Technology Upgradation Fund Scheme. During the earlier year 2010-11 the Company had credited the interest receivable from the bank as interest subsidy under the Technology Upgradation Fund Scheme amounting to Rs. 863.24 Lacs. Against the said amount the Company had received interest subsidy of Rs. 71.72 Lacs during the financial year 2011-12 and thereafter has not received any interest subsidy. Therefore as on 31.03.2015, interest subsidy to be received is ' 791.52 Lacs i.e. same as the balance receivable as on 31.03.2014. The calculation of interest subsidy receivable is based on statements provided to us. The balance is subject to confirmation from the bank.

7. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai, and State Bank Of Saurashtra Mumbai are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs. 500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC is secured by way of hypothecation of Motor Cars.

8. The balances with Term Loans and Cash Credit Account of State Bank of India, ING Vysya Bank Ltd and Oriental Bank of Commerce and Term Loan of Industrial Development Bank of India are subject to confirmation from the respective banks.

9. The Company holds investment in 1135800 equity shares of GSL Nova Petrochemicals Ltd. and 350500 equity shares of CIL Nova Petrochemical Ltd. out of which 323000 shares of GSL Nova Petrochemicals were pledged against the loan obtained by GSL Nova Petrochemicals Ltd. and 161500 Shares of CIL Nova Petrochemical Ltd were pledged against the loan obtained by CIL Nova Petrochemical Ltd.

10. LOSS OF STOCK IN FIRE:

On account of fire occurred in the company's factory premises on 30.06.2008 stock were destroyed. According to the Company, the estimated loss due to fire was Rs. 2051.51 Lacs. The company had made a claim with its insurer New India Assurance Co. Ltd. The insurer New India Assurance Co. Ltd. vide its letter dated 09.12.2009 repudiated liability for any claim. The company made detailed submission on 16.12.2009 pointing out that the reasons given by the insurer for repudiating claim were not germane and correct. The solicitor of the company wrote to the insurer for providing copies of papers on which the insurer relied. The company also made application under Right to Information Act 2005 on 07.12.2009. The insurer did not provide all the papers and therefore company again wrote to the insurer on 11.08.2010 that all the papers should be provided by the insurer. On non receipt of the required papers company approached the grievance redressal officer IRDA Hyderabad. By letter dated 14.06.2010 IRDA merely reproduced what insurance company had informed them without their comments. Being aggrieved the company filed complaint under Section 21(A)(1) of Consumer Protection Act 1986 before the National Consumer Disputes Redressal Commission New Delhi on 08.12.2010 and the matter is pending before them.

On the basis of above mentioned facts, upto the year ended on 31 March 2011, the company had separately mentioned the value of destroyed goods amounting to Rs. 2051.51 Lacs, which is claimed by the company from Insurance company.

During the financial year 2011-12 the company had removed the amount of loss of stock in fire, by crediting the said amount as income under the head 'Claim Receivable on Loss of Stock on fire' and debiting the said amount as 'Claim Receivable from Insurance Company'.

For the stock destroyed in fire the Company had amount receivable of Rs. 111.42 Lacs as excise duty credit from Central Excise Department. During the financial year 2011-12 the company had credited the 'Balance with Central Excise Authority' and debited 'Excise Receivable for Stock Lost in Fire from Insurance Company' by Rs. 111.42 Lacs based on the order dated 20.01.2012 received from Commissioner Central Excise, Customs and Service Tax, Vapi.

Consequently, as on 31.03.2012 the 'Claim Receivable on Loss of Stock on fire' is standing at Rs. 2162.93 Lacs in the balance sheet, which is being carried forward as on 31.03.2015 as well.

11. WRITE OFF AMOUNT OF TERM LOAN BY BANK :

The ING Vysya Bank Ltd., have written off Rs. 18,14,90,530.05 in Term Loan Account during FY 2013-14. The company have written a letter to the Bank to know the reason for the said writing off. The company has not received any explanations about the same and therefore said amount is not written off by the company in its books of account and therefore the balance outstanding in the name of ING Vysya Bank Ltd is shown higher by that amount Rs. 18,14,90,530.05 and correspondingly the Profit & Loss Account balance in Balance Sheet show the loss figure higher by the amount '18,14,90,530.05.

The Standard Chartered Bank have written off Rs. 20,29,76,713.71 in Term Loan Account during FY 2013-14. The company have written a letter to the Bank to know the reason for the said writing off. The company has not received any explanations about the same and therefore said amount is not written off by the company in its books of account and therefore the balance outstanding in the name Standard Chartered Bank is shown higher by that amount Rs.20,29,76,713.71 and correspondingly the Profit & Loss Account balance in Balance Sheet show the loss figure higher by the amount Rs. 20,29,76,713.71.

12. The Oriental Bank of Commerce have issued a letter No. CN/5501/GUPTA/2166/2014 dated 01.04.2014 stating that the bank have assigned all our banking accounts with the bank to M/s. Edelweiss Asset Reconstruction Company Ltd. And have requested us to address all the corresponding in future to M/s. Edelweiss Asset Reconstruction Company Ltd.

13. RELATED PARTY DISCLOSURES:

I. List of related parties and relationships:

Enterprises over which Key Managerial personnel and relative of such personnel are able to exercise significant influence

Sr. No. Name of the such Related Parties

1. Nandkishore O. Gupta

2. Umadevi M. Gupta

3. Prakash N. Gupta

4. Mohan N. Gupta

5. Sharp Synthetics Pvt. Ltd.

6. Blue Chip Builders Pvt. Ltd.

7. Evergreen Synthetics Pvt. Ltd.

8. Sterlite Synthetics Pvt. Ltd.

9. GSL Nova Petrochemicals Pvt. Ltd.

---

Mar 31, 2014

1. The Company has been in losses and as on year ended 31st March, 2014 the accumulated losses of the Company has exceeded its entire net worth, making it a ''Sick Industrial Company'' as per the definition of Sick Industri al Companies (Special Provisions) Act, 1985.

The Company had filed reference under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 with the Board of Financial and Industrial Reconstruction on 18.04.2012 and said reference was registered on 26.04.2012.

Further the company has been declared a ''sick industrial company'' under Section 3(1)(o) of Sick Industrial Companies (Special Provisions) Act, 1985 on its hearing dated 29.05.2013.

The matter is yet pending before the Bench of Board for Industrial and Financial Reconstruction. The company has appeared before the Bench on all the hearing date till date.The next schedule date for hearing is on 14.10.2014.

2. DISCLOSURES PERTAINING TO SHARE CAPITAL:

a. Details of Equity Shareholders holding more than 5 per cent shares in the company:

c. Details for the period of five years immediately preceding the date as at which the Balance Sheet is prepared:

Aggregate number and class of shares allotted as fully paid up pursuant to contract without payment being received in cash

Aggregate number and class of Aggregate number shares allotted as fully paid up and class of shares by way of bonus shares bought back

d. Forfeiture of share application money:

During the year the company has not forfeited any shares application money.

3. CONTINGENT LIABILITIES (Rs IN LACS): As at As at 31.03.2014 31.03.2013

Bank Guarantees 41.68 129.18

Claims against the company not 521.99 521.99 acknowledged as debt

Gratuity 31.71 30.68

*Note: The company has been legally advised that the demands raised are likely to be either deleted or substantially reduced and accordingly no provision has been made.

4. The company is engaged in manufacturing Partially Oriented Yarn (POY), Fully Drawn Yam (FDY) Polyester Texturised Yarn, Polyester Draw Twisted Yarn, Polyester Twisted Yarn and Nylon Yarn.

5. The details of amounts outstanding to Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) based on the available information with the company are as under (Rs. In lacs):

6. Previous Year''s Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

7. Trade Receivables, Trade Payables, Advances from customers, Deposits with Banks, Unsecured Short Term Borrowings and Long Term & Short Term Loans and Advances are subject to confirmation.

8. Interest Receivable comprised of Interest Subsidy under Technology Upgradation Fund Scheme. During the earlier year 2010-11 the Company had credited the interest receivable from the bank as interest subsidy under the Technology Upgradation Fund Scheme amounting to Rs. 863.24 Lacs. Against the said amount the Company had received interest subsidy of Rs. 71.72 Lacs during the financial year 2011-12 and thereafter has not received any interest subsidy. Therefore as on 31.03.2014, interest subsidy to be received is Rs. 791.52 Lacs i.e. same as the balance receivable as on 31.03.2013. The calculation of interest subsidy receivable is based on statements provided to us. The balance is subject to confirmation from the bank.

9. Following items are included under the head "Auditors Remuneration" :

Above details are compiled based on the latest sanction letters of respective banks produced before us by the management.

36. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai, and State Bank Of Saurashtra Mumbai are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs.500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC is secured by way of hypothecation of Motor Cars.

10. Following bank accounts are classified as Non-Performing Assets and the interest expenses for these banks are estimated by the company at the interest rate prescribed by the bank in sanction letters and are debited to the Profit & Loss Statement during the year, since these banks have not provided Bank Statements to the company. Only Oriental Bank of Commerce provided bank statement up to 30.06.2013 only.

Above interest is estimated at the rate of ten per cent per annum on the amount outstanding in books of accounts since the date of continuing default in repayment.

(*Note: Out of three term loan accounts of ING Vysya Bank, the bank has provided statement for just one term loan account in FY 2013-14 and interest charge by the bank is Rs. 5.48 lacs only. As per the precedent the company is suppose to pass an interest entry of approx. Rs.188.02 lacs at 10% interest rate per annum on outstanding balance in the books of accounts. Therefore balance estimated interest of Rs.182.54 lacs (Rs. 188.02 - Rs.5.48 lacs) is passed in the books by the company. )

11. During the year, Industrial Development Bank of India, Standard Chartered Bank and Oriental Bank of Commerce, charge up to 30.06.2013, have charged higher interest rate on Term Loan and Cash Credit facilities in comparison to the interest rates prescribed by the banks in their respective sanction letters. Therefore, the company has credited Rs.465.20 Lacs to Interest Expenses account.

12. The balances with Term Loans and Cash Credit Account of State Bank of India, ING Vysya Bank Ltd and Oriental Bank of Commerce and Term Loan of Industrial Development Bank of India are subject to confirmation from the respective banks.

13. EARNINGS PER SHARE (EPS):

The earnings per equity share computed as per the requirement of Accounting Standard 20 "Earnings Per Share" is as under (Amount inRs.):

14. The Company holds investment in 1135800 equity shares of GSL Nova Petrochemicals Ltd. and 350500 equity shares of CIL Nova Petrochemical Ltd. out of which 323000 shares of GSL Nova Petrochemicals were pledged against the loan obtained by GSL Nova Petrochemicals Ltd. and 161500 Shares of CIL Nova Petrochemical Ltd were pledged against the loan obtained by CIL Nova Petrochemical Ltd.

15. LOSS OF STOCK IN FIRE:

On account of fire occurred in the company''s factory premises on 30.06.2008 stock were destroyed. According to the Company, the estimated loss due to fire was Rs.2051.51 Lacs. The company had made a claim with its insurer New India Assurance Co. Ltd. The insurer New India Assurance Co. Ltd. vide its letter dated 09.12.2009 repudiated liability for any claim. The company made detailed submission on 16.12.2009 pointing out that the reasons given by the insurer for repudiating claim were not germane and correct. The solicitor of the company wrote to the insurer for providing copies of papers on which the insurer relied. The company also made application under Right to Information Act 2005 on 07.12.2009. The insurer did not provide all the papers and therefore company again wrote to the insurer on 11.08.2010 that all the papers should be provided by the insurer. On non receipt of the required papers company approached the grievance redressal officer IRDA Hyderabad. By letter dated 14.06.2010 IRDA merely reproduced what insurance company had informed them without their comments. Being aggrieved the company filed complaint under Section 21(A)(1) of Consumer Protection Act 1986 before the National Consumer Disputes Redressal Commission New Delhi on 08.12.2010 and the matter is pending before them.

On the basis of abovementioned facts, upto the year ended on 31 March 2011, the company had separately mentioned the value of destroyed goods amounting to Rs.2051.51 Lacs, which is claimed by the company from Insurance company.

During the financial year 2011-12 the company had removed the amount of loss of stock in fire, by crediting the said amount as income under the head ''Claim Receivable on Loss of Stock on fire'' and debiting the said amount as ''Claim Receivable from Insurance Company''.

For the stock destroyed in fire the Company had amount receivable of Rs. 111.42 Lacs as excise duty credit from Central Excise Department. During the financial year 2011-12 the company had credited the ''Balance with Central Excise Authority'' and debited ''Excise Receivable for Stock Lost in Fire from Insurance Company'' by Rs.111.42 Lacs based on the order dated 20.01.2012 received from Commissioner Central Excise, Customs and Service Tax, Vapi. Consequently, as on 31.03.2014 the ''Claim Receivable on Loss of Stock on fire'' is Rs.2162.93 Lacs in the balance sheet.

17. WRITE OFF AMOUNT OF TERM LOAN BY BANK :

The ING Vysya Bank Ltd., have written off Rs.18,14,90,530.05 in Term Loan Account during FY 2013-14. The company have written a letter to the Bank to know the reason for the said writing off. The company has not received any explanations about the same and therefore said amount is not written off by the company in its books of account and therefore the balance outstanding in the name of ING Vysya Bank Ltd is shown higher by that amount Rs.18,14,90,530.05 and correspondingly the Profit & Loss Account balance in Balance Sheet show the loss figure higher by the amount Rs.18,14,90,530.05.

The Standard Chartered Bank have written off Rs.20,29,76,713.71 in Term Loan Account during FY 2013-14. The company have written a letter to the Bank to know the reason for the said writing off. The company has not received any explanations about the same and therefore said amount is not written off by the company in its books of account and therefore the balance outstanding in the name of Standard Chartered Bank is shown higher by that amount Rs.20,29,76,713.71 and correspondingly the Profit & Loss Account balance in Balance Sheet show the loss figure higher by the amount Rs.20,29,76,713.71.

18. Followings are the pending disputed cases against the company:

Cases

SBI Global Factors Limited v/s Gupta Synthetics Limited.:

Brief Summary

The Company has taken unsecured loan of 1500 Lacs in 2007- 08 and ''744 Lacs (principal Amount) plus interest was outstanding against the same due to adverse market conditions. SBI Global Factors Limited (a Unsecured Creditors) has filed winding up petition in 2010 against this outstanding and against this company has paid 545 Lacs up to February 2012. The matter is pending before Bombay High Court.

Standard Chartered Bank v/s Gupta Synthetics Limited

Standard Chartered Bank (a Secured Creditor) has filed recovery application against the company in DRT-I (Mumbai) for the amount of Rs.1436.62 Lacs.

State Bank of India

v/s Gupta Synthetics Limited.

State Bank of India (a Secured Creditor) has filed recovery application against company in DRT-I (Mumbai) for the amount of 4287.76 Lacs.

Indian Overseas Bank

v/s Gupta Synthetics Limited.:

Indian Overseas Bank (a unsecured Creditor) has filed recovery application against company DRT-II (Ahmedabad) for the amount of 422.23 Lacs.

Indo Rama Synthetics (I) Limited v/s Gupta Synthetics Limited.

Gupta Synthetics Limited has filed application in Delhi High Court against the order of Sole arbitrator. For a dispute of '' 17.05 lacs was outstanding against various supplies plus Interest and other Charges with Indo Rama Synthetics (I) Limited.

Desai Construction Private Limited v/s Gupta Synthetics Limited.

Desai Construction Pvt. Ltd. has filed application in The Arbitral Tribunal amount for 195.89 Lacs & Company has Counter Claimed vide is reply dated 30.11.2007 for 38.39 Lacs on the complainant.

ING Vysya Bank Ltd.

v/s Gupta Synthetics Limited.

ING Vysya Bank Ltd. has filed recovery application against the company in DRT-I (Mumbai) for the amount of Rs.4268.01 Lacs.

The company has replied to the bankers against the above notice.

19. The Oriental Bank of Commerce have issued a letter No. CN/5501/GUPTA/2166/2014 dated 01.04.2014 stating that the bank have assigned all our banking accounts with the bank to M/s. Edelweiss Asset Reconstruction Company Ltd. And have requested us to address all the corresponding in future to M/s. Edelweiss Asset Reconstruction Company Ltd.

20. In the Financial year 2013-2014 depreciation as per Companies Act is more than the depreciation as per Income-Tax Act. Deferred Tax Asset will arise as follows.

21. RELATED PARTY DISCLOSURES:

I List of related parties and relationships:

Enterprises over which Key Managerial personnel and relative of such personnel are able to exercise significant influence

Sr. No. Name of the such Related Parties

1. Nandkishore O. Gupta

2. Umadevi M. Gupta

3. Prakash N. Gupta

4. Mohan N. Gupta

5. Sharp Synthetics Pvt. Ltd.

6. Blue Chip Builders Pvt. Ltd.

7. Evergreen Synthetics Pvt. Ltd.

8. Sterlite Synthetics Pvt. Ltd.

9. GSL Nova Petrochemicals Pvt. Ltd.

II Transactions during the year with related parties (Rs.In lacs):

Above information regarding related parties have been determined to the extent such parties have been identified on the basis of information and explanations given to us by the company.

The above Cash Flow Statement has been completed from and is based on the audited accounts of M/s. Gupta Synthetics Limited for the year ended 31st March, 2014 reported upon by us on 12th August, 2014. According to the informations and explanations given, the aforesaid Cash Flow Statement has been prepared pursuant to Clause 32 of Listing Agreement with Stock exchanges and the reallocations required for purpose are as made by the Company.

---

Mar 31, 2013

1. The Company has been in losses and as on year ended 31st March, 2013 the accumulated losses of the Company has exceeded its entire net worth, making it a ''Sick Industrial Company'' as per the definition of Sick Industrial Companies (Special Provisions) Act, 1985.

The Company had filed reference under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 with the Board of Financial and Industrial Reconstruction on 18.04.2012 and said reference was registered on 26.04.2012.

Further the company has been declared a ''sick industrial company'' under Section 3(1)(o) of Sick Industrial Companies (Special Provisions) Act, 1985 on its hearing dated 29.05.2013.

2. CONTINGENT LIABILITIES (Rs. IN LACS):

As at As at 31.03.2013 31.03.2012

Bank Guarantees 129.18 229.18

Claims against the company not acknowledged as debt * 521.99 551.21

Gratuity 30.68 29.31

* Note: The company has been legally advised that the demands raised are likely to be either deleted or substantially reduced and accordingly no provision has been made.

3. The company is engaged in manufacturing Partially Oriented Yarn (POY), Fully Drawn Yarn (FDY) Polyester Texturised Yarn, Polyester Draw Twisted Yarn, Polyester Twisted Yarn and Nylon Yarn. During the financial year the company is engaged in trading of fabric and nylon.

4. The details of amounts outstanding to Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) based on the available information with the company are as under (Rs. In lacs):

5. Previous Year''s Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

6. Trade Receivables, Trade Payables, Advances from customers, Deposits with Banks, Unsecured Short Term Borrowings and Long Term & Short Term Loans and Advances are subject to confirmation.

7. Interest Receivable comprised of Interest Subsidy under Technology Upgradation Fund Scheme. During the earlier year 2010-11 the Company had credited the interest receivable from the bank as interest subsidy under the Technology Upgradation Fund Scheme amounting to Rs. 863.24 Lacs. Against the said amount the Company had received interest subsidy of Rs. 71.72 Lacs during the financial year 2011-12 and thereafter have not received any interest subsidy. Therefore as on 31.03.2013, interest subsidy to be received is Rs. 791.52 Lacs i.e. same as the balance receivable as on 31.03.2012. The calculation of interest subsidy receivable is based on statements provided to us. The balance is subject to confirmation from the bank.

8. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai, and State Bank Of Saurashtra Mumbai are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs. 500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC is secured by way of hypothecation of Motor Cars.

9. Following bank accounts are classified as Non-Performing Assets and the interest expenses for these banks are estimated by the company at the interest rate prescribed by the bank in sanction letters and are debited to the Profit & Loss Statement during the year, since these banks have not provided Bank Statements to the company:

10. During the year, Oriental Bank of Commerce, Industrial Development Bank of India and Standard Chartered Bank have charged higher interest rate on term loan and cash credit facilities in comparison to the interest rates prescribed by the banks in their respective sanction letters. Therefore, the company has credited Rs. 482.92 Lacs to Interest expenses account.

11. The balances with Term Loans and Cash Credit Account of State Bank of India and ING Vysya Bank Ltd. and Term Loan of Industrial Development Bank of India are subject to confirmation from the respective banks.

12. The Company holds investment in 1135800 equity shares of GSL Nova Petrochemicals Ltd. and 701000 CIL Nova Petrochemical Ltd. out of which 323000 shares of both the companies were pledged against the loan obtained by GSL Nova Petrochemicals Ltd. and CIL Nova Petrochemical Ltd.

13. LOSS OF STOCK IN FIRE:

On account of fire occurred in the company''s factory premises on 30.06.2008 stock were destroyed. According to the Company, the estimated loss due to fire was Rs. 2051.51 Lacs. The company had made a claim with its insurer New India Assurance Co. Ltd. The insurer New India Assurance Co. Ltd. vide its letter dated 09.12.2009 repudiated liability for any claim. The company made detailed submission on 16.12.2009 pointing out that the reasons given by the insurer for repudiating claim were not germane and correct. The solicitor of the company wrote to the insurer for providing copies of papers on which the insurer relied. The company also made application under Right to Information Act 2005 on 07.12.2009. The insurer did not provide all the papers and therefore company again wrote to the insurer on 11.08.2010 that all the papers should be provided by the insurer. On non receipt of the required papers company approached the grievance redressal officer IRDA Hyderabad. By letter dated 14.06.2010 IRDA merely reproduced what insurance company had informed them without their comments. Being aggrieved the company filed complaint under Section 21(A)(1) of Consumer Protection Act 1986 before the National Consumer Disputes Redressal Commission New Delhi on 08.12.2010 and the matter is pending before them.

On the basis of abovementioned facts, upto the year ended on 31 March 2011, the company had separately mentioned the value of destroyed goods amounting to Rs. 2051.51 Lacs, which is claimed by the company from Insurance company.

During the financial year 2011-12 the company had removed the amount of loss of stock in fire, by crediting the said amount as income under the head ''Claim Receivable on Loss of Stock on fire'' and debiting the said amount as ''Claim Receivable from Insurance Company''.

For the stock destroyed in fire the Company had amount receivable of Rs. 111.42 Lacs as excise duty credit from Central Excise Department. During the financial year 2011-12 the company had credited the ''Balance with Central Excise Authority'' and debited ''Excise Receivable for Stock Lost in Fire from Insurance Company'' by Rs. 111.42 Lacs based on the order dated 20.01.2012 received from Commissioner Central Excise, Customs and Service Tax, Vapi.

Consequently, as on 31.03.2013 the ''Claim Receivable on Loss of Stock on fire'' is Rs. 2162.93 Lacs in the balance sheet.

14. RELATED PARTY DISCLOSURES:

I. List of related parties and relationships:

Enterprises over which Key Managerial personnel and relative of such personnel are able to exercise significant influence

Sr. No. Name of the such Related Parties

1. Kshitij Mohan Gupta

2. Mohan N. Gupta HUF

3. Neetadevi P. Gupta

4. Nandkishore O. Gupta

5. Prakash N. Gupta HUF

6. Umadevi M. Gupta

7. Gaurav P. Gupta

8. Jatin P. Gupta

9. Prakash N. Gupta

10. Mohan N. Gupta

11. Sharp Synthetics Pvt. Ltd.

12. Blue Chip Builders Pvt. Ltd.

13. Evergreen Synthetics Pvt. Ltd.

14. Sterlite Synthetics Pvt. Ltd.

15. GSL Nova Petrochemicals Pvt. Ltd.

---

Mar 31, 2012

1. The Company has been in losses and as on year ended 31st March, 2012, the accumulated losses of the Company had exceeded 100% of its net worth, making it a potentially Sick Company.

The Company will be required to file reference with the Board of Financial and Industrial Reconstruction as per the provisions of Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985

a. Details for the period of five years immediately preceding the date as at which the Balance Sheet is prepared:

b. Forfeiture of share application money:

During the year the company has forfeited shares application money of Rs. 300.44 Lacs and transferred the same to 'Capital Reserve' in Reserve & Surplus.

2. CONTINGENT LIABILITIES (Rs. IN LACS):

As at As at 31.03.2012 31.03.2011

Bank Guarantees 229.18 229.18

Claims against the company not acknowledged as debt * 551.21 0.80

Gratuity 29.31 28.81

* The company has been legally advised that the demands raised are likely to be either deleted or substantially reduced and accordingly no provision has been made.

3. The company is engaged in manufacturing Partially Oriented Yarn (POY), Fully Drawn Yarn (FDY) Polyester Texturised Yarn, Polyester Draw Twisted Yarn, Polyester Twisted Yarn and Nylon Yarn. During the financial year the company is engaged in trading of fabric and nylon.

4. The details of amounts outstanding to Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) based on the available information with the company are as under (Rs. In lacs):

5. During the earlier years quantitative details of production comprised of excisable production from all departments and quantitative details of sales comprised of clearances made without payment of duty and with duty were reported.

However during the year quantitative details of production comprised of excisable production meant for sale and quantitative details of sales comprised of clearances with duty is reported.

6. Previous Year's Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

7. Trade Receivables, Trade Payables, Deposits with Banks, Unsecured Short Term Borrowings and Long Term & Short Term Loans and Advances are subject to confirmation.

8. Interest Receivable comprised of Interest Subsidy under Technology Upgradation Fund Scheme. During the earlier year 2010-11 the Company had credited the interest receivable from the bank as interest subsidy under the Technology Upgradation Fund Scheme amounting to Rs. 863.24 Lacs. Against the said amount the Company has received interest subsidy of Rs. 71.72 Lacs during the current year, therefore interest subsidy yet to be received is Rs. 791.52 Lacs. The calculation of interest subsidy receivable is based on statements provided to us. The balance is subject to confirmation from the bank.

Above details are compiled based on the latest sanction letters of respective banks produced before us by the management.

9. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai, and State Bank Of Saurashtra Mumbai are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs. 500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC is secured by way of hypothecation of Motor Cars.

10. The company has defaulted in repayment of dues towards their Term Loan Accounts with State Bank of India, ING Vysya Bank Ltd., Industrial Development Bank of India and Oriental Bank of Commerce. Details of overdue amounts are tabulated below (Rs. In lacs):

Above interest is estimated at the rate of ten per cent per annum on the amount outstanding in books of accounts since the date of continuing default in repayment.

11. During the current year it was identified that in earlier years banks had charged higher interest rate on term loan and cash credit facilities in comparison to the interest rates prescribed by the banks in their sanction letters after restructuring. Therefore, the company has credited Rs. 359.46 Lacs towards the excess interest charged by banks in earlier years.

12. The balances with SBI Term Loans and Cash Credit Account and IDBI Term Loan and Cash Credit Accounts are subject to confirmation from the respective banks.

13. The Company holds investment in 1135800 equity shares of GSL Nova Petrochemicals Ltd. and 701000 CIL Nova Petrochemical Ltd. out of which 323000 shares of both the companies were pledged against the loan obtained by GSL Nova Petrochemicals Ltd. and CIL Nova Petrochemical Ltd.

14. LOSS OF STOCK IN FIRE:

On account of fire occurred in the company's factory premises on 30.06.2008 stock were destroyed. According to the Company, the estimated loss due to fire was Rs. 2051.51 Lacs. The company had made a claim with its insurer New India Assurance Co. Ltd. The insurer New India Assurance Co. Ltd. vide its letter dated 09.12.2009 repudiated liability for any claim. The company made detailed submission on 16.12.2009 pointing out that the reasons given by the insurer for repudiating claim were not germane and correct. The solicitor of the company wrote to the insurer for providing copies of papers on which the insurer relied. The company also made application under Right to Information Act 2005 on 07.12.2009. The insurer did not provide all the papers and therefore company again wrote to the insurer on 11.08.2010 that all the papers should be provided by the insurer. On non receipt of the required papers company approached the grievance redressal officer IRDA Hyderabad. By letter dated 14.06.2010 IRDA merely reproduced what insurance company had informed them without their comments. Being aggrieved the company filed complaint under Section 21(A)(1) of Consumer Protection Act 1986 before the National Consumer Disputes Redressal Commission New Delhi on 08.12.2010 and the matter is pending before them.

On the basis of abovementioned facts, upto the year ended on 31 March 2011, the company had separately mentioned the value of destroyed goods amounting to Rs. 2051.51 Lacs, which is claimed by the company from Insurance company.

During the year the company has removed the amount of loss of stock in fire, by crediting the said amount as income under the head 'Claim Receivable on Loss of Stock on fire' and debiting the said amount as 'Claim Receivable from Insurance Company'.

For the stock destroyed in fire the Company had amount receivable ofRs. 111.42 Lacs as excise duty credit from Central Excise Department. During the year the company has credited the 'Balance with Central Excise Authority' and debited 'Excise Receivable for Stock Lost in Fire from Insurance Company' by Rs.111.42 Lacs based on the order dated 20.01.2012 received from Commissioner Central Excise, Customs and Service Tax, Vapi.

15. RELATED PARTY DISCLOSURES:

I. List of related parties and relationships:

Enterprises over which Key Managerial personnel and relative of such personnel are able to exercise significant influence

Sr. No. Name of the such Related Parties

1. Kshitij Mohan Gupta

2. Mohan N. Gupta HUF

3. Neetadevi P. Gupta

4. Nandkishore 0. Gupta

5. Prakash N. Gupta HUF

6. Umadevi M. Gupta

7. Gaurav P. Gupta

8. Jatin P. Gupta

9. Prakash N. Gupta

10. Mohan N. Gupta

11. Sharp Synthetics Pvt. Ltd.

12. Blue Chip Builders Pvt. Ltd.

13. Evergreen Synthetics Pvt. Ltd.

14. Sterlite Synthetics Pvt. Ltd.

15. GSL Nova Petrochemicals Pvt. Ltd.

Above information regarding related parties have been determined to the extent such parties have been identified on the basis of information and explanations given to us by the company.

*Note: Opening stock of finished goods comprised of stock Lost in fire.

---

Mar 31, 2011

1. Contingent Liabilities

(Rs in lacs)

Current Year Previous Year 31.03.2011 31.03.2010

Bank Guarantees 229.18 229.18

OTHER NOTES :

2. Previous Year's Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

3. Debtors, Creditors, Unsecured Loans and deposits with banks are subject to confirmation.

4. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai, and State Bank Of Saurashtra Mumbai are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs 500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC is secured by way of hypothecation of Motor Cars financed by them respectively.

5. The company has credited the interest receivable from the bank as interest subsidy under the TUF Scheme amounting to Rs 863.24 lacs. The calculation of interest subsidy receivable is based on statements received. The balance is subject to confirmation from the Bank.

6. The balances with SBI Term Loans and Cash Credit Account and IDBI Term Loan and Cash Credit Accounts are subject to confirmation from the respective banks.

7. The company has defaulted in repayment of dues towards their Term Loan Accounts with State Bank of India, ING Vysya Bank Ltd., Industrial Development Bank of India and Oriental Bank of Commerce. Details of overdue amounts are tabulated below:

8. Loss of stock:

On account of fire occurred in the Company factory premises on 30.06.2008 stock were destroyed. As per the company, estimated the loss due to fire was Rs 20.51 crore. The company had made a claim with its insurer, New India Assurance Co. Ltd. The insurer New India Assurance Co. Ltd. vide its letter dated 09.12.2009 repudiated liability for any claim. The company made detailed submission on 16.12.2009 pointing out that the reasons given by the insurer for repudiating claim were not germane and correct. The solicitor of the company wrote to the insurer for providing copies of papers on which the insurer relied. The company also made application under Right to Information Act, 2005 on 07.12.2009. The insurer did not provide all the papers and therefore company again wrote to the insurer that all the papers are to be provided by the insurer on 11.08.2010 on non receipt of the required papers company approached the grievance redressal officer IRDA Hyderabad. By letter dated 14.06.2010 IRDA merely reproduced what insurance company had informed them without their comments. Being aggrieved the company filed complaint under section 21(A)(1) of Consumer Protection Act, 1986 before the National Consumer Disputes Redressal Commission New Delhi on 08.12.2010 and the matter is pending before them.

On the basis of above facts the company has separately mentioned the value damaged goods amounting to Rs 20.51 crore which are claimed by the company from Insurer.

9. The company had invested in 918400 equity share of GSL Nova Petrochemicals Ltd. and CIL Nova Petrochemical Ltd. each, out of which 323000 shares of both the companies were pledged against the loan obtained by GSL Nova Petrochemicals Ltd. and CIL Nova Petrochemical Ltd.

10. In the Financial year 2010-2011 Depreciation as per Companies Act is less than as per Income-Tax Act. Deferred Tax liabilities will arise as follows.

11. Additional information pursuant to paragraph 3, 4C and 4D of Part - II of Schedule VI of the Companies Act, 1956.

A. LICENSED CAPACITY :

The Company was not required to obtain any license under Industrial Regulation Act, and therefore, the details relating to Licensed Capacity are not applicable.

---

Mar 31, 2010

1. Contingent Liabilities (in lacs)

Current Year Previous Year

31.03.2010 31.03.2009

Bank Guarantees Rs.. 229.18 Rs.. 229.00

OTHER NOTES :

2. Previous Years Figures have been recasted and regrouped wherever considered necessary to make them comparable with those of current year.

3. Debtors, Creditors, Unsecured Loans and deposits with banks are subject to confirmation.

4. Working Capital Facilities, Term loan as well as Working Capital from Oriental bank of Commerce Mumbai, ING Vysya Bank Mumbai, State Bank of India Mumbai, Industrial Development bank of India Mumbai, Standard Chartered Bank Mumbai and State Bank Of Saurashtra Mumbai and short term loan for working capital for Rs.. 500 lacs from ING Vysya Bank Limited on stand alone basis for Silvassa Projects are secured by way of hypothecation of Stock, Book Debts, Equitable Mortgage of Factory Land and Building, Plant and Machinery and personal guarantee of all the Promoter Directors.

An unsecured loan from Indian Overseas Bank, Baroda for Rs.. 500 Lacs has been sanctioned and availed, secured by the personal guarantee of Directors of the Company only.

Term loan from HDFC and ICICI Bank is secured by way of hypothecation of Motor Cars financed by them respectively.

5. Additional information pursuant to paragraph 3, 4C and 4D of Part - II of Schedule VI of the Companies Act, 1956.

A. LICENSED CAPACITY :

The Company was not required to obtain any license under Industrial Regulation Act, and therefore, the details relating to Licensed Capacity are not applicable.

6. Based on our audit procedures and according to the information and explanation given to us, the company has defaulted in repayment of dues towards their Term Loan Accounts with State Bank of India aggregating to Rs..1752.36 lacs (including interest) and has defaulted in repayment of dues towards their Term Loan Accounts with IDBI Bank aggregating to Rs.. 1680 lacs (including interest).

7. Information pursuant to Part IV of Schedule VI of the the Companies Act, 1956 : Balance Sheet Abstract and Companys General Business Profile