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.
|