1.  During the year as per the order dated 1/12/2010 issued by the
 Board for Industrial and Financial Reconstruction (BIFR) the Company
 has been ceased to be a sick industrial company under the provisions of
 Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) as in
 opinion of the Board the net worth of the company turned positive and
 its revival is sustainable and therefore discharged from the purview of
 SICA / BIFR.
 
 2.  Loans and Advances : -
 
 Advances recoverable in cash or in kind, include the following :
 
 a) the Company uses industrial alcohol as a raw material and has been
 paying sales-tax and vend fees on the same. During the year 1989-90, on
 25th October, 1989 in the matter of Synthetics & Chemicals Limited V/s.
 state of UP. and others industrial alcohol consumer, the Supremo Court
 held that payment of vend fee and sales tax on industrial alcohol,
 unfit for human consumption, is illegal and should not bo levied,
 prospectively. the company has accordingly, filed separate writ
 petition in the High Court of Gujarat, for stay of future recovery. the
 High Court granted an interim stay for the recovery, against which
 Government of Gujarat filed a special leave petition with respect to
 the sales tax matter but was unable to obtain a stay from the Supreme
 Court against the interim stay order granted by the High Court.
 
 In the year 1991-92 based on the judgement of Supreme Court in the
 matter of Synthetics & Chemicals Limited V/s. state of U.P. on
 sales-tax, Gujarat High Court vacated the interim stay obtained by the
 company on 22nd October 1991. Accordingly sales tax is being charged
 from 23rd October, 1991 by the suppliers of industrial alcohol in the
 state and the company paying the same. However, the company''s petition
 both in the matter of salos-tax and vend fees remains pending for
 disposal.
 
 Ponding disposal as aforementioned of the Company''s cases the Company
 had set-up as recoverable the amount of vend fees and sales-tax of Rs.
 15.91 lacs and 7.24 lacs respectively for the year 1989-90 and 1990-91.
 the Company has received refund of the entire amount against the vend
 fees before 31st March, 2003 leaving a balance of Rs. 7.24 lacs yet to
 bo received towards sales-tax. the company has considered the said
 amount under Loans & Advances as  Advances recoverable in cash or in
 kind.
 
 b) During the year 1991-92, a levy of 0.20 paise per bulk litre of
 industrial alcohol had been made by the proscribed authorities on
 purchase of alcohol as administration fees.
 
 the Company has paid a sum of Rs. 2.54 lacs up to 27th April, 1991
 under protest, which has been set up as recoverable as Loans and
 Advances, and filed a Special Civil Application for stay which was
 granted on 23rd April 1991, by the High Court. Accordingly no further
 sum up to 31st March 1992 was paid.
 
 During the year 1991-92, the said High Court, without prejudice to the
 rights and contentions of the parties, has ordered a reduced levy of 5
 paise per bulk litre.
 
 the company has also received a demand notice for Rs. 4.40 lacs for the
 period up to 10th June, 1992 towards administrative fees from the
 prescribed authorities.
 
 Adjustment, if any, to the cost of purchase of Alcohol will be made on
 the final disposal of the application.
 
 c) the company has paid Rs.1.52 lacs under protest towards excise duty
 for the period from January, 1992 to March, 1993 on the sale of waste
 acid which has been set up as recoverable as Loans and Advances since
 the company has disputed the classification and levy of Excise Duty.
 Adjustments, if any, will be made on the final disposal of the matter.
 
 3. During the financial year 2003-2004, pursuant to the BIFR order the
 partly paid up equity shares have been converted in to fully paid up
 equity shares based on the value of shares already paid and thereafter,
 all the fully paid up equity shares have been converted in to fresh
 fully paid up equity shares of Rs. 10 each after reducing the total
 number of shares by 90%. During the year the company has complied with
 the procedures prescribed in the listing agreements with the stock
 exchanges including issue of fresh equity share certificates in lieu of
 old equity share certificates.
 
 4.  Contingent liability not provided for on account of:
 
                                          31-03-2011      31-03-2010
 
 i)   Excise Duty disputed by the 
      Company pending disposal             16,62,494       16,62,494
 
 ii)  Drainage charges disputed 
      by the Company pending 
      disposal                              8,80,975        8,80,975
 
 iii) Back wages and reinstatement 
      demand made by certain 
      dismissed at Ankleshwar             Amount not      Amount not
      factory, pending adjudication.   Ascertainable   Ascertainable
 
 
 5.  the Company is primarily engaged in business of manufacturing of
 Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries &
 Chemicals. Since the inherent nature of activities as a whole are
 governed by the same set of risk and returns these have been grouped as
 a single segment, the results of which are reflected in the financial
 statements. the said treatment is in accordance with the Accounting
 standard - 17 on ''Segment Reporting''issued by the Institute of
 Chartered Accountants of India.
 
 6.  Related Party Disclosures (a) Relationship:
 
 i.    Key Management Personnel:
 
       Manish Navnitlal Patel - Managing Director (Also controls 
       majority of voting powers of the Company)
 
 ii.   Relatives of Key Management Personnel :
 
       Devika Navnitlal Patel (Mother), Hem Manish Patel (Wife), 
       Bela Sandip Jhaveri (Sister), Chaula Navnitlal Patel 
      (Sister) and Hemangini Sameer Sinha (Sister)
 
 iii.  Enterprises over which key management personnel alongwith
       relatives is able to exercise significant influence:
 
       Gujarat Alcohol and Allied Chemicals Pvt. Ltd., 
       Shree Maulikarjun Trade Invest Pvt. Ltd., 
       Shree Bhuvanakaram Trade Invest Pvt. Ltd., Shree
       Vishvamurte Trade Invest Pvt. Ltd., 
       Shree Suprinit Trade Invest Pvt. Ltd., Mahalaxmi Trading 
       Agency, Chandramani Chemicals and Prakruti Enterprise.
 
 7. Net Deferred Tax Assets, mainly representing past losses and
 unabsorbed depreciation, have not been recognized following the
 principles of prudence due to uncertainty of the quantum of future
 profits in terms of Accounting standard - 22 for ''Taxes on Income''
 issued by the Institute of Chartered Accountants of India.