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,
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 &
2. CONTINGENT LIABILITIES (Rs. IN LACS):
As at As at
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
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
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
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
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.