CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA … · 2 table of contents sr. no particulars page...

1

CIL NOVA PETROCHEMICALS LIMITED

(FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY)

INFROMATION MEMORANDUM (WITH UPDATED INFORMATION AS ON 31.03.2011) CIL Nova Petrochemicals Limited was originally incorporated on December 17, 2003 under the Companies Act,

1956 as Nova Polyyarn Limited. The Honourable High Court of Gujarat at Ahmedabad by its order dated August

27, 2009 has approved the scheme of arrangement in the nature of demerger amongst Nova Petrochemicals

Limited (New name GSL Nova Petrochemicals Limited and Nova Polyyarn Limited (New name CIL Nova

Petrochemicals Limited) and their respective share holders and creditors. Pursuant to the scheme the name of

the Company was change from Nova Polyyarn Limited to CIL Nova Petrochemicals Limited.

////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// Registered Office: Survey No.396 (P), 395/4 (P),Moraiya Village,Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad 382210 Corporate Office: Chiripal House, Shivranjani Cross Roads, Satellite, Ahmedabad-380 015 Tel: + 91 79 26734660 Fax: + 91 79 26768656 Contact Person: Mr. Ved Prakash Chiripal, Director & Compliance Officer Email: [email protected] Website: www.chiripalgroup.com

2

TABLE OF CONTENTS

Sr. No

Particulars Page Nos.

I DEFINITIONS, ABBREVIATIONS AND INDUSTRY RELATED TERMS 3 -9

II DETAILS OF CHANGE OF NAME, CHANGE OF OBJECT AND CHANGE 10 - 10

III CAPITAL STRUCTURE 11 - 12

IV SHAREHOLDING PATTERN 13 - 17

V LIST OF 10 LARGEST SHARE-HOLDERS 18 - 19

VI DETAILS OF PROMOTERS 20 - 22

VII BUSINESS & ITS MANAGEMENT, CORPORATE MATTERS. 23 - 34

VIII REASONS FOR THE SCHEME 35 - 52

IX FINANCIAL STATEMENT OF LAST 3 YEARS 53 - 113

X LATEST FINANCIAL AS ON 30.09.2009 114 - 114

XI DETAILS OF GROUP COMPANIES 115 - 119

XII OUTSTANDING LITIGATIONS 120 - 164

XIII SHARE PRICE INFORMATION OF LISTED COMPANY 165 - 165

XIV OTHER INFORMATION 166 - 202

XV DECLARATION 203 - 203

3

SECTION I – DEFINITIONS AND ABBREVIATIONS

In the Information Memorandum, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this Section.

CONVENTIONAL AND GENERAL TERMS

Term Description Act or Companies Act The Companies Act, 1956 and amendments thereto

Allotment Allotment of Shares pursuant to Scheme Appointed Date 1st April, 2007 Beneficial Owner / Beneficiary Account Such persons whose name is registered as Beneficial Owner with

Depositories BIFR Board for Industrial and Financial Reconstruction as referred in

SICA Act, 1985 Chairman Shri Jyoti Prasad D. Chiripal, a resident of India Client ID Demat Account number allocated by DP Demat Account An Account opened by the investor with DP for keeping shares in

dematerialization form Demerged Company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals

Limited) existing listed Company on ASE, BSE & NSE Designated Stock Exchange The designated stock exchange shall be the Bombay Stock

Exchange Limited Depositories Act The Depositories Act, 1996 as amended from time to time Depository A depository registered with SEBI under the SEBI (Depositories and

participants) Regulations, 1996, at present NSDL & CDSL Depository Participant / DP A depository participant as defined under the Depositories Act,

1996 DP ID Depository Participant’s Identification Number

Equity Share(s) or Share(s) Means the Equity Share of the Company having a face value of Rs.5/- unless otherwise specified in the context thereof

Equity Shareholder Means a holder of Equity Shares FEMA Foreign Exchange Management Act, 1999 read with rules and

regulations thereunder and amendments thereto FII / FIIs A Foreign Institutional Investor as defined under SEBI (Foreign

Institutional Investors) Regulations, 1995, as amended from time to time registered with SEBI under applicable laws in India

FIPB Foreign Investment Promotion Board FVCI Foreign Venture Capital Investor registered under the Securities

and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000

Income Tax Act / I.T. Act The Income Tax Act, 1961, as amended from time to time Income Tax Rules / I.T. Rules The Income Tax Rules, 1962, as amended from time to time Indian GAAP Generally Accepted Accounting Principles in India Industrial Policy The industrial policy and guidelines issued thereunder by the

Ministry of Industry, Government of India, from time to time Investor(s) Shall mean the holder(s) of Equity Shares of the Company as on

the Record Date. Issue Issue of Shares pursuant to Scheme Non Resident A person resident outside India, as defined under FEMA and

includes NRIs and FIIs

4

Non Resident India / NRI A person resident outside India, as defined under FEMA who is a citizen of India or a person of Indian Origin specified under FEMA (Deposit Regulations), 2000, as amended from time to time

Overseas Corporate Body / OCB A company, partnership firm, society and/or other corporate body owned directly or indirectly to the extent of atleast 60% by NRIs including overseas Trusts in which not less than 60% of the beneficial interest is irrevocably held by NRIs directly or indirectly and which was in existence on October 3, 2003 and immediately before such date was eligible to undertake transactions pursuant to the general permission granted to OCBs under FEMA. OCBs are not allowed to participate in this Issue

Record Date Thursday, 22nd October, 2009

ROC Registrar of Companies, State of Gujarat, Office at Ahmedabad under Ministry of Corporate Affairs, GOI

SCRA Securities Contracts (Regulation) Act, 1956, as amended from time to time

SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time

SEBI The Securities and Exchange Board of India constituted under the SEBI Act

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 as amended from time to time rescinded since 26.09.2009

SEBI (ICDR Regulation) The Securities & Exchange Board of India (Issue of Capital & Disclosure) Regulation 2009 as amended from time to time

SEBI (Circular) The Securities & Exchange Board of India circular no. SEBI / CFD / SCRR / 01 / 2009 / 03 / 09 dated September 3, 2009.

Scheme or Scheme of Arrangement or Scheme of Arrangement of Demerger or Demerger Scheme or Scheme of Demerger

Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 amongst GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited), and their respective shareholders and creditors, sanctioned by the High Court Gujarat at Ahmedabad vide its order dated 27th August, 2009, the copy of which is issued on 18th September, 2009.

SICA Sick Industrial Companies (Special Provision Act, 1985 Stock Exchange(s) Shall refer to the BSE, NSE and ASEwhere the Equity Shares of the

demerged Company are presently listed Takeover Code The SEBI (Substantial Acquisition of Shares and Takeover)

Regulations, 1997 and amendments thereto Wealth Tax Act The Wealth Tax Act, 1957 and amendments thereto

5

COMPANY RELATED TERMS AND INDUSTRY RELATED TERMS

Term Description "CIL Nova” or “CIL Nova Petrochemicals Limited”or “the Company” or“our Company” or “Issuer Company” or“we” or “us” or “our”

Nova Polyyarn Limited, CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited), a public limited company incorporated under the provisions of the Companies Act, 1956, having its registered office at Survey No.396 (P), 395/4 (P), Moraiya Village, Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad 382210.

Articles / Articles of Association / AoA Articles of Association of our Company Auditors The statutory auditors of our Company, M/s. J. T. Shah &

Company,Chartered Accountants, Ahmedabad. Board/ Board of Directors Board of Directors of our Company CDR Corporate Debt Restructuring under RBI Notification Chiripal Family Family Members and relatives of the present promoters of the

company Corporate Office of our Company Chiripal House, Shivranjani Cross Roads, Satellite, Ahmedabad-380 015 Director(s) Director(s) of our company, unless otherwise specified DTY Draw Twisted Yarn FDY Fully Drawn Yarn Gupta Family Family Members and relatives of the present promoters of GSL Nova

Petrochemicals Limited Memorandum / Memorandum of Association / MoA

The Memorandum of Association of our Company

MW Mega Watt POY Partially Oriented Yarn or Partially Oriented Polyester Filament Yarn Promoter Directors 1. Mr. Vedprakash DChiripal 2. Mr. Jyotiprasad D Chiripal Promoter Group Unless the context otherwise requires, refers to those Individuals /

companies / entities mentioned in the chapter titled “Our Promoter Group” of the Information Memorandum

Promoter(s) 1. Mr. Vedprakash D Chiripal 2. Mr. Jyotiprasad D Chiripal

Registered Office of our Company Survey No.396 (P), 395/4 (P), Moraiya Village, Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad 382210

TPA Tonnes Per Annum

6

ABBREVIATIONS

Abbreviation Full Form A/c Account AGM Annual General Meeting AS Accounting Standards as issued by the Institute of Chartered Accountants of India AY Assessment Year BIFR Board for Industrial and Financial ReconstructionCAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited CIN Company Identification Number DIN Director Identification Number DIPP Department of Industrial Policy and Promotion DP Depository Participant DP ID Depository Participant’s Identity EBIDTA Earnings Before Interest, Tax, Depreciation and Amortisation ECS Electronic Clearing System EGM Extraordinary General Meeting ELECTRONIC TRANSFER Credit of shares in the Demat Account of Investor by DP

EPS Earnings per share FCNR Account Foreign Currency Non Resident Account FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 FITL Funded Interest Term Loan

FVCI Foreign Venture Capital Investor registered under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000

GDP Gross Domestic Product GIR Number General Index Registry Number GoI/Government Government of India HUF Hindu Undivided Family I.T. Act The Income Tax Act, 1961, as amended from time to time Indian GAAP Generally Accepted Accounting Principles in India IPO Initial Public Offering ISIN International Security identification Number allotted by DP KMP Key Managerial Personnel LC Letters of credit Mn / mn Million MOU Memorandum of Understanding MICR Magnetic Ink Character Recognition NA Not Applicable NAV Net Asset Value NCCD National Calamity Contingent Duty NH National Highway NOC No Objection Certificate NEFT National Electronic Fund Transfer NR Non-resident NRE Account Non Resident External Account NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited. P/E Ratio Price/Earnings Ratio PAN Permanent Account Number PAT Profit after Tax PBDIT/ EBIDTA Profit before Depreciation, Amortisation ,Interest and Tax

7

PBT Profit before Tax RBI The Reserve Bank of India RONW Return on Net Worth RTGS Real Time Gross Settlement SIA Secretariat for Industrial Assistance SUPREME COURT `1 The Hon’ble Supreme Court of India TIN Tax payers Identification Number T/L Term Loan TRS Transaction Requisition Slip WCTL Working Capital Term Loan

8

CERTAIN CONVENTIONS; USE OF MARKET DATA

Financial Data

Unless stated otherwise, the financial information used in the Information Memorandum is derived from our financial statements as of and for the years ended on March 31, 2008, 2009, 2010 prepared in accordance with Accounting Standards and the Companies Act, as stated in the report of our Statutory Auditors, M/s. J. T. Shah & Co., Chartered Accountants, and for the Nine months ended December 31, 2010 included in the Information Memorandum.

Our fiscal year commences on April 1 and ends on March 31 of a particular year. Unless stated otherwise, references herein to a fiscal year (e.g., fiscal 2010), are to the fiscal year ended March 31 of a particular year.

In the Information Memorandum, unless the context otherwise requires, all references to one gender also refers to another gender and the word “Lakhs /Lacs / Lac” means “one hundred thousand” and “million / mn./ millions” means “ten lacs”, “Crore” means “ten millions” and “billion / bn./ billions” means “one hundred crores”. Further, any discrepancies in any table between the total and the sum of the amounts are due to rounding-off, throughout the Information Memorandum, currency figures have been expressed in “million / mn./ millions” except those, which have been reproduced / extracted from sources as specified at the respective places.

Use of Market Data: Market data used in this Information Memorandum have been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in the Information Memorandum is reliable, it has not been independently verified. The extent to which such market and industry data is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data

The information included in this Information Memorandum about various other companies is based on the respective annual reports and the information made available by the respective companies.

9

FORWARD LOOKING STATEMENTS

The Information Memorandum contains certain forward-looking statements. These forward-looking statements generally can be identified by words or phrases like ‘will’, ‘aim’, ‘will likely result’, ‘believe’, ‘expect’, ‘will continue’, ‘anticipate’, ‘estimate’, ‘intend’, ‘plan’, ‘contemplate’, ‘seek to’, ‘future’, ‘objective’, ‘goal’, ‘project’, ‘should’, ‘will pursue’ and similar expressions or variations of such expressions, that are ‘forward looking statements’. Similarly, the statements that describe our objectives, plans or goals are also forward-looking statements.

Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the following:

General economic and business conditions in India; Our ability to manage our growth and expansion effectively; Our ability to meet out capital expenditure requirements; Prices of raw materials we consume and the products we produce; Contingent liabilities, environmental problems and uninsured losses; Government approvals; Changes in government policies and regulatory actions that apply to or affect our business; Any adverse outcome in the legal proceedings in which the Company may be involved; The loss or shutdown of operations of the Company at any times due to strike or labour unrest or any other

reason; and Changes in political and social conditions in India.

10

SECTION II

Details of the Change of Name of the Company

The company was originally incorporated as Nova Polyyarn Limited on 17th December 2003. Pursuant to the scheme, the change of name of the company from Nova Polyyarn Limited to CIL Nova Petrochemicals Limited was contemplated. The company filed form no 21 with office of ROC Gujarat who has issued fresh certificate of Incorporation in the name of CIL Nova Petrochemicals Limited. Therefore now the name of the Company is CIL Nova Petrochemicals Limited.

Details of Object Clause:

There has not been any change in the object clause of the Memorandum of Association of the Company. The object clause of the Memorandum of Association is as follows:

“[A] The main object to be pursued by the Company on its incorporation are:

1. To Carry on the business of manufacturing, weaving, bleaching, dyeing, processing, mercerizing, printing, sizing, importing, exporting, purchasing, selling and or otherwise, dealing in yarn of all types, cloth of all types and other fabrics made from cotton, jute, wool, silk, art silk, rayon, nylon, man made synthetics fibers, staple fibers and other suitable material and generally to carry on the business of spinning, crimping, texturing, twisting, weaving and processing mill properties in all their branches.

2. To gin kapas, and to spin, weave manufacture, dye, print, clean, press and pack cotton linen silk waste dropping, flywool, jute hemp, /flex and other fabrics, material and things capable of being used for dyeing, printing, combing, processing, sizing, bleaching and pressing purpose and to sell, buy or otherwise deal in all other goods, yarn cloth and or other fibers whether made or treated or processed by the company or not and engaging any business relating to the use of any of the by products of the company.

3. To carry on business of spinners, weavers, manufactures, ginners pressure, packers, and bailers of cotton, jute hemp silk artificial silk rayon, nylon, stretchlon man made synthetics, fibers, staple fiber wool and any other fibrous material and cultivation thereof and the business of manufacturing weaving, bleaching, printing, and selling yarn cloth of all types an fabrics of all types whether knitted or looped and of importing exporting buying and or otherwise dealing in cotton silk, art silk, rayon-nylon Strechlon man made synthetic fiber, staple fiber, wool hemp, and other fibrous material yarn cloth, linen and rayon and or merchandise made there from and generally to carry on the business of spinners, weavers processors dyers seizers manufacturer and or dealers in cotton, linen flax, hemp jute silk artificial silk, rayon man made synthetics, fibers, staple fiber, wool yarn and cloth merchants, cleaners, combers, spinners, weavers, bleachers. Dyers, printers, seizer, importer, exporter, manufacturing or carrying and preparing, processes and to purchase, sell, import and export and or otherwise deal in raw materials and manufactured articles.

4. To carry on the business of manufacturing, buying, selling, exchanging converting, altering, importing, exporting, processing, crimping, texturing, twisting or otherwise handling or dealing in rayon yarn (also known as continuous filament rayon or artificial silk yarn and which expression shall include all synthetics fibers or fibers whatsoever for textile use staple fiber, staple fiber yarn (also known as spoon rayon) and such other fiber / fibers or fibrous materials or allied products, bye products or substance or substitutes for all or any of them or yarn or yarns for textile or other used as may be practicable or deemed expedient.

Change in Registered Office of the Company:

The Registered Office of the Company was situated at Survey No. 396,403, Sarkhej Bavla Highway, Village- Moraiya, Tal: Sanand Dist- Ahmedabad – 382210 and has now been shifted to at Survey No. 396 (P), 395/4 (P), Moraiya Village, Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad – 382210

The Registered Office of the Company is currently situated at Survey No. 396 (P), 395/4 (P), Moraiya Village, Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad – 382210

The documents with respect to Form-21 filed with ROC and fresh certificate of incorporation and revised Memorandum of Association is available for inspection at the Registered Office of the Company.

11

SECTION III

Capital Structure

The Authorised Share Capital of the Company was Rs. 15,00,00,000/- consists of 1,50,00,000 equity shares of Rs. 10/- each and the Subscribed & Paid up capital of the company consists of 50,000 equity shares of Rs. 10/- each aggregating Rs. 5,00,000/-. Pursuant to the scheme, the sub-division of shares of Rs. 10/- each was contemplated and therefore 2 (two) shares of Rs. 5/- each were required to be issued to the existing shareholders of the Company as well as Share of the face value of Rs.5/- each was contemplated to be issued to the investors of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) on its Record Date.

Pre Scheme of Arrangement:

Authorised: Rs. 15000000 Equity Shares of Rs. 10 each 15,00,00,000

Issued & Subscribed:

50000 Equity Shares of Rs. 10 each fully paid-up 5,00,000

Paid-up:


The company filed form no 21 with office of ROC Gujarat who has registered the form no 21 and amended the master data of the Company on www.mca.gov.in in that respect. The Board of Directors of the company at its meeting held on 26th October, 2009 issued 2 (two) equity shares of Rs 5/- each fully paid up against 1(One) equity share of Rs. 10/- each fully paid up to the existing shareholders of the Company. Therefore the share capital structure of the company has become 1,00,000 equity shares of Rs. 5/- each fully paid up aggregating Rs. 5,00,000/-.

Pursuant to Scheme the Capital Clause changed as follows:

Notwithstanding anything contrary under the provisions of section, 16, 31, 94 and 97 of the Companies Act, 1956 the capital clause of the Memorandum of Association of the Resulting Company and Article 5 of the Articles of Association of the Resulting Company shall, upon the coming into effect of this Scheme and without any further act or deed, be replaced by the following clause:

MEMORANDUM OF ASSOCIATION

“V. The Authorised Capital of the Company is Rs. 32,50,00,000/- (Rupees Thirty two crores fifty lakh only) divided into 6,50,00,000 (Six crores fifty lakh only) Equity Shares of Rs. 5/- each, with the rights, privileges and conditions attached thereto with the power to vary, modify or abrogate such rights, privileges and conditions as may be provided by the Articles of Association of the Company for the time being. The Board of Directors shall have the power to classify as and when required the shares as equity or preference shares and attach thereto respectively such preferential, deferred, qualified or special rights, privileges and conditions and also the power to increase or reduce the capital of the Company as may be determined in accordance with the Articles of Association of the Company.”

ARTICLES OF ASSOCIATION

“5(a). The Authorised Capital of the Company is Rs. 32,50,00,000/- (Rupees Thirty two crores fifty lakh only) divided into 6,50,00,000 (Six crores fifty lakh only) Equity Shares of Rs. 5/- each with the power to increase or reduce such capital from time to time in accordance with the regulations of the company and the legislative provisions for the time being in force in this behalf and with the power also to divide the shares in the capital for the time being into equity share capital and preference share capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions.”

In view of the above the Capital Structure changes as follows:

12

Capital Structure: Post Scheme

Pursuant to the scheme, the company was required to issue 1(One) equity share of Rs. 5/- each to the shareholders of demerged company being GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited), on its record date, 22nd October 2009. Accordingly, the Company filed form no 21 with office of ROC Gujarat who has registered the form no 21 and amended the master data of the Company by raising the Authorised Share Capital of the Company to Rs. 32,50,00,000/- consists of 6,50,00,000 equity shares of Rs. 5/- each. The Board of Directors of the company at its meeting held on 26th October, 2009 issued 1 (one) equity shares of Rs.10/- each fully paid up against 1(One) equity share of Rs. 5/- each fully paid up to the shareholders of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) whose name appeared in the Register of Member as on record date 22nd October, 2009 of that company. The company filed form no 2 with ROC Gujarat. Therefore the share capital structure of the Company, at present, is 2,71,00,000 equity shares of Rs. 5/- each fully paid up aggregating Rs. 13,55,00,000/-

Authorized: Rs.

65000000 Equity Shares of Rs. 5/- each 32,50,00,000


27100000 Equity Shares of Rs. 5/- each fully paid-up 13,55,00,000

Paid-up:


Capital Evolution:

At the Time of Incorporation:

Authorised:

15000000 Equity Shares of Rs. 10 each 15,00,00,000



Paid-up:


Pursuant to Scheme:

Authorised:




Paid-up:


The Company has received the ISIN No.INE672K01017 from NSDL.The shares of the Company have been credited in the Demat Accounts of the respective holder by the depositories on or around 05.12.2009. The RTA has also dispatched the share certificates to the holder of physical shares on or before 05.12.2009.

13

SECTION IV

SHAREHOLDING PATTERN

1. PRE ALLOTMENT AS ON 22.10.2009

CIL Nova Petrochemicals Ltd

Statement showing Shareholding Pattern as per Clause 35 Code: As Per Record Date

Quarter 22-Oct-2009 Face Value 10/-

Category

Category of shareholder Number of

Total number

Number of shares

Total shareholdi

ng

as a percenta

ge

Shares pledge

d or

code shareholders

of shares held in of total number

of shares otherwise

encumbered

dematerialized As a As a Number of

As a

form percentage percentage of

shares percentage

of (A+B) (A+B+C) (IX) = (I) (II) (III) (IV) (V) (VI) (VII) (VIII) (VIII)/(IV)

*100 (A) Shareholding of Promoter

and Promoter Group 1 Indian (a) Individuals/Hindu Undivided

Family 4 25,000 0.000 0.0000 0.0000 0 0.0000(b) Central Government/State

Government(s) 0 (c) Bodies Corporate 0 (d) Financial Institutions / Banks 0 (e) Any Other (specify) 0 Sub Total (A)(1) 4 25,0000 0.000 0.0000 0.0000 0 0.00002 Foreign (a) Individuals (Non-Resident

Individuals/Foreign Individuals) 0

(b) Bodies Corporate 0 (c) Institutions 0 (d) Any Other (specify) 0 Sub Total (A)(2) 0

Total Shareholding of Promoter and Promoter Group (A)=(A)(1)+(A)(2) 4 25,000 0.000 0.0000 0.0000 0 0.0000

(B) Public shareholding 1 Institutions 0

14

(a) Mutual Funds/UTI 0 (b) Financial Institutions / Banks 0 (c) Central Government/State

Government(s) 0 (d) Venture Capital Funds 0 (e) Insurance Companies 0 (f) Foreign Institutional Investors 0 (g) Foreign Venture Capital

Investors 0 (h) Any Other (specify) 0 Sub Total (B) (1) 0 2 Non-institutions 0 (a) Bodies Corporate 0 (b) i) Individuals - shareholders

holding nominal share capital up to Rs 1 Lakh 4 25,000 0.000 0.0000 0.0000 0 0.0000

ii) Individual shareholders holding nominal share capital in excess of Rs. 1 Lakh 0

(c) Non Residents 0 i NRI Rep 0 ii NRI Non -Rept 0 iii OCB 0 iv Foreign Bodies 0 v Foreign National 0 vi Any Other 0

Sub Total (B)(2) 4 25,000 0.000 0.0000 0.0000 0 0.0000

Total Public Shareholding (B)=(B)(1)+(B)(2) 8 50,000 0.000 0.0000 0.0000 0 0.0000

Total (A)+(B) (C) Shares held by custodians

and against which Depository Receipts have been issued 0

GRAND TOTAL (A)+(B)+(C) 8 50,000 0.000 0.0000 0.0000 0 0.0000

15

2. LIST OF PERSONS HOLDING MORE THAN 1% AS ON 22.10.2009

Sr.No Name of the shareholders No. of shares % of total sharecapital

1 Shyam Sunder Gupta 6250 12.50 2 Sunil Kumar Gupta 6250 12.50 3 Prakash Gupta 6250 12.50 4 Mohan Gupta 6250 12.50

Total 25000 50.00

16

3. Post allotment Shareholding Pattern as on 26.10.2009


Statement showing Shareholding Pattern as per Clause 35

Code: P O S T A L L O T M E N T

Quarter 26-Oct-2009

Face Value Rs. 5/-

Categor

y Category of shareholder Number of Total number

Number of

shares

Total shareholding as a

percentage

Shares pledged or

otherwise

code shareholders of shares held in of total number of shares encumbered

dematerialized As a As a Number As a

form

percentage of

percentage

of of shares percentage

(A+B) (A+B+C) (IX) =

(I) (II) (III) (IV) (V) (VI) (VII) (VIII)

(VIII)/(IV)

*100

(A) Shareholding of Promoter

and Promoter Group

1 Indian

(a) Individuals/Hindu Undivided

Family 5 333,619 308,619 1.23 1.23 190,620 57.137

(b) Central Government/State

Government(s) 0 0 0 0.0

(c) Bodies Corporate 10 6,302,917 6,302,917 23.26 23.26 3,502,517 55.57

(d) Financial Institutions / Banks 0 0.0 0 0 0.0000 0 0.00

(e) Any Other (specify) 21 2,344,220 2,319,220 8.653 8.6530 16,620 0.709

Sub Total (A)(1) 36 8,980,756 8,930,756 33.142 33.142 3,709,757 41.308

2 Foreign

(a)

Individuals (Non-Resident

Individuals/Foreign

Individuals)

0 0 0 0 0.000 0 0.000

(b) Bodies Corporate 0 0 0 0.00 0.000 0 0.000

(c) Institutions 0 0 0 0.0 0.000 0 0.000

(d) Any Other (specify) 0 0 0 0.00 0.000 0 0.000

Sub Total (A)(2) 0 0.0 0.0 0.00 0.000 0 0.000

Total Shareholding of

Promoter and Promoter

Group

(A)=(A)(1)+(A)(2)

36 8,980,756 8,930,756 33.142 33.142 3,709,757 41.308

(B) Public shareholding

1 Institutions

(a) Mutual Funds/UTI 0 0 0.000 0.000 0.0000 0 0.000

(b) Financial Institutions / Banks 1 600 600 0 0.002 0 0.000

(c) Central Government/State

Government(s) 0 0 0 0 0.0000 0 0.000

17

(d) Venture Capital Funds 0 0 0 0 0.0000 0 0.000

(e) Insurance Companies 0 0 0 0 0.0000 0 0.000

(f) Foreign Institutional

Investors 0 0 0 0 0.0000 0 0.000

(g) Foreign Venture Capital

Investors 0 0 0 0 0.0000 0 0.000

(h) Any Other (specify) 0 0 0 0 0.0000 0 0.000

Sub Total (B) (1) 1 600 600 0 0.002 0 0.002

2 Non-institutions

(a) Bodies Corporate 244 6,185,421 6,181,632 22.829 22.8290 0 0.00

(b) i)

Individuals - shareholders

holding nominal share

capital up to Rs 1 Lakh

6,889 2166753 1622578 7.995 7.995 0 0.00

ii)

Individual shareholders

holding nominal share

capital in excess of Rs. 1

Lakh

44 9,209,628 9,159,628 33.982 33.9840 0 0.0000

(c) Any Other (Specify)

i NRI Rep 254 515,417 103,317 1.893 1.8930 0 0.0000

ii NRI Non -Rept 17 28,014 28,014 0.10 0.1010 0 0.0000

iii OCB 1 5,000 5,000 0.018 0.0180 0 0.0000

iv Trust 1 5,000 5,000 0.018 0.0180 0 0.0000

v Clearing Member 2 1,611 1,611 0.006 0.0060 0 0.0000

Sub Total (B)(2) 7,452 18,116,844 17,106,780 66.84 66.8400 0 0.0000

Total Public

Shareholding

(B)=(B)(1)+(B)(2)

7,453 18,117,444 17,107,380 66.844 66.842 0 0

Total (A)+(B)

(C)

Shares held by

custodians and against

which Depository

Receipts have been

issued

1 1,800.000 1,800.000 0.0070 0.0070 0 0

GRAND TOTAL

(A)+(B)+(C) 7,490 27,100,000 26,039,936 99.99 99.991 3,709,757 13.689

18

SECTION V

Name of 10 largest shareholders as on 26.10.2009

No. and Percentage of Shares held by each of them, their interest if any:

Sr. No Name No of Shares

(%) of share

Interest, if any

1. PRAKASH GUPTA 234220 0.864 -2. KAVITA NAVIN SARAOGI 197417 0.728 -

3. SHYAMSUNDER GUPTA 190610 0.703 -

4 SUNILKUMAR N GUPTA 166200 0.613 -

5. SHREE MOHAN GUPTA 126200 0.466 -

6. SUNAINADEVI S GUPTA 113800 0.420 -

7. UMADEVI M GUPTA 81400 0.300 -

8. SALOO J. AGARWAL 60000 0.221 -

9. DURGESHWARI PRADIP CHIRIPAL 58764 0.217 -

10. SAVITA GUPTA 54600 0.201 -

Total 1283211 4.733

19

HOLDING OF CHIRIPAL GROUP AS PER CLAUSE 35 AS ON 26.10.2009

SR.NO NAME SHARES % 1 BRIJMOHAN D CHIRIPAL 600000 2.21 2 MANJUDEVI JAYPRAKASH AGARWAL 500000 1.85 3 VISHAL VEDPRAKASH CHIRIPAL 400000 1.48 4 URMILADEVI JYOTIPRASAD AGARWAL 400000 1.48 5 SAVITRIDEVI VEDPRAKASH CHIRIPAL 400000 1.48 6 VED PRAKASH D CHIRIPAL 208219 0.77 7 VEDPRAKASH DEVKINANDAN CHIRIPAL 100000 0.37 8 BRIJ MOHAN D CHIRIPAL 16620 0.06 9 BRIJMOHAN CHIRIPAL 12500 0.05

10 VEDPRAKASH CHIRIPAL 12500 0.05 11 JAI PRAKASH CHIRIPAL 12500 0.05 12 JYOTIPRASAD CHIRIPAL 12500 0.05 13 VEDPRAKASH DEVKINANDAN CHIRIPAL 400 0.00 14 VANSH J CHIRIPAL 200 0.00 15 NIDHI J AGARWAL 200 0.00 16 RUCHI B AGARWAL 200 0.00 17 DEEPAK J AGRAWAL 200 0.00 18 NISHI J AGARWAL 200 0.00 19 RONAK B AGARWAL 200 0.00 20 VISHAL V CHIRIPAL 200 0.00 21 MANJUDEVI J. AGARWAL 200 0.00 22 PRITIDEVI B. CHIRIPAL 200 0.00 23 SAVITRIDEVI V. CHIRIPAL 200 0.00 24 JAY PRAKASH D. AGARWAL 200 0.00 25 URMILADEVI J. AGARWAL 200 0.00 26 BRIJMOHAN D H U F 200 0.00 27 CHIRIPAL INDUSTRIES LIMITED 266000 0.98 28 NANDAN EXIM LTD 1032000 3.81 29 NANDAN EXIM LIMITED 1032000 3.81 30 SHANTI EXPORTS PVT. LTD. 449617 1.66 31 SHANTI EXPORTS PVT. LTD. 402000 1.48 32 CHIRIPAL PETROCHEMICALS LIMITED 266000 0.98 33 CHIRIPAL ENTERPRISE LIMITED 34900 0.13 34 CHIRIPAL ENTERPRISES LTD. 30400 0.11 35 PRITI PROCESSORS PVT LTD 20000 0.07 36 CHIRIPAL INDUSTRIES LIMITED 2770000 10.22

TOTAL 8980756 33.14

20

SECTION VI

Details of Promoters – (Education Qualification, Experience and Address)

The family members of Chiripal family and family members of Gupta Family originally promoted the Company. Pursuant to the Scheme, it was contemplated as follows: “Since Effective Date, the Resulting Company would be managed by the promoters namely Chiripals and the demerged company shall be managed by the promoters namely Guptas, however, both the promoter groups will extend their cooperation and assistance to the respective management.”

Accordingly, the Board of Directors of the Company has been reconstituted at its meeting of Board of Directors held on 5th October 2009 and decided to name Shri Jyotiprasad Chiripal and Shri Ved Prakash Chiripal as the promoters of the Company. Therefore the details of present promoters are as follows:

OUR PROMOTERS Our present Promoters are Mr. Vedprakash D Chiripal and Mr. Jyotiprasad D. Chiripal.

We confirm that the Permanent Account Number, Driving License Number, Voter ID Number and passport number of all the above individual Promoters shall be submitted to ASE, BSE and NSE at the time of filing the Information Memorandum. Further, till date no Promoter has been declared as willful defaulters by RBI or any other government authority and there are no punishment in their individual capacity whether debarment / financial penalties has been awarded for the violations of securities laws committed by our Promoters in the past nor any such proceedings are pending against our Promoters except mentioned in the Chapter XII “Outstanding Litigation”.

Sr. No.

Name, Father’s Name, Designation, Occupation and DIN

Educational Qualification

Experience Address

1 Mr. Vedprakash D Chiripal S/o Mr. Devkinandan Chiripal, Director Occupation: Industrialist DIN: 290454

B. Com. 34 years 11, Nandi Hill Society Opp ISRO, Satellite Road, Ahmedabad 380 015

2 Mr. Jyotiprasad D. Chiripal S/o Mr. Devkinandan Chiripal, Director Occupation: Industrialist DIN: 00155430

B. Com. 30 years 91, Basant Bahar, Bopal, Ahmedabad 380 058

Mr. Jyotiprasad D. Chiripal, Chairman Driving License number is GJ / 01 / 801351 / 02 Passport number is F1684234 Permanent Account Number is AAJPA4565D Voter ID number is LPZ1576966.

Mr. Vedprakash D. Chiripal, Director Driving License number: N.A Passport number is F1680202 Permanent Account Number is AAHPC2102Q Voter ID number is GJ / 11 / 064 / 1080613.

21

Our Management:

The Company was originally promoted by Chiripal family and Gupta family having equal representation on the Board of Directors of the Company comprising of Shri Jyoti Prasad D. Chiripal and Shri Ved D. Prakash Chiripal from Chiripal Family and Shri Shyam Kumar Gupta and Shri Sunil Kumar Gupta from Gupta family. Pursuant to the scheme, “since Effective Date, the Resulting Company would be managed by the Promoters namely Chiripals and the demerged company shall be managed by the Promoters namely Guptas however both the promoter groups will extend their cooperation and assistance to the respective management.” Accordingly, the members of the Gupta family tendered their resignation from the Board of Directors of the Company at its meeting held on 5th October 2009, however, assured to extend full co-operation for successful implementation of the Scheme. At the same meeting, the Board of Directors of the Company appointed Mr. Jyoti Prasad D. Chiripal as the Chairman of the Company and two new Directors, who consented to act as Director of the Company, were also appointed as Independent Directors. The present Board of Directors consists of following members:

Sr. No.

Name, Father’s Name, Address, Occupation and DIN

Date of Appointment and Term

Status Age (in years)

Details of other Directorships

1. Mr. Jyotiprasad D. Chiripal S/o Mr. Devkinandan Chiripal, Director Add: 91, Basant Bahar, Bopal, Ahmedabad - 380058 Occupation: Industrialist DIN: 00155695

Date of Appointment: 17-12-2003 Designation: Chairman

Promoter 56 1. Chiripal Industries Ltd 2. Vishal Fabrics Pvt. Ltd 3. Nova Petrofils Ltd. 4. Chiripal Energy Ltd. 5. Chiripal Poly Films Ltd.

2. Mr. Vedprakash D. Chiripal S/o Mr. Devkinandan Chiripal Add: 11, Nandi Hill Society Opp ISRO, Satellite Road, Ahmedabad- 380015 Occupation: Industrialist DIN: 00290454

Date of Appointment: 17-12-2003 Designation: Director

Promoter 58 1. Nandan Exim Limited 2. Chiripal Industries Limited 3. Chiripal Lifestyles Limited 4. Nova Petrofiles Ltd. 5. Chiripal Energy Ltd. 6. Chiripal Polyfilms Ltd.

3. Mr. Ambalal Patel S/o Mr. Chhitabhai Patel Add: 14/B, Shreyansnath Society,B/H. Dharnidhar Derasar, Vasana, Ahmedabad -380009 Occupation: Consultant DIN: 0037870

Date of Appointment: 05-10-2009 as Additional Director and Regularized as Director liable for retirement by rotation in AGM dated 23.09.2010

IndependentDirector

66 1. Nandan Exim Limited 2. Jindal Hotel Limited. 3. Shree Gajanand Papers Ltd. 4. Vishal Mellable Ltd. 5. Laffans Petro Chemicals Ltd. 6. Sumeru Industries Ltd. 7. Circuit Systems (India) Ltd. 8. SAL Steel Ltd. 9. Shree Precoated Steels Ltd. 10. Karnavati Hospital Ltd. 11. Ajmera Reality & Infra India Ltd. 12. Chiripal Industries Ltd.

4 Mr. Murli R Goyal S/o Mr. Raghunandan Goyal Add: 11, Anu Shil Niketan, IRLA, S.V. Road, Vile Parle West, Mumbai – 400056 Occupation: Consultant DIN: 02329432

Date of Appointment: 05-10-2009 as Additional Director and Regularized as Director liable for retirement by rotation in AGM dated 23.09.2010

Independent Director

50 Nil

22

Brief Biography of Our Directors

Mr. Jyotiprasad D. Chiripal, aged 56 years, is a Chairman of CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY). He is a Commerce graduate and has obtained his Bachelor of Commerce from Gujarat University. He has an experience of 30 years in the textile trade & industry. Mr. Jyotiprasad D. Chiripal is a Managing Director of Vishal Fabrics Private Limited.

Mr. Vedprakash D. Chiripal, aged 58years, is the Director of CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY). He is a Commerce graduate and has obtained his Bachelor of Commerce degree from Calcutta University. He has an experience of 35 years in the textile industry. Mr. Vedprakash D. Chiripal is a Chairman and Managing Director of Chiripal Industries Limited and under his tenure as Chairman and Managing Director, the said Company has obtained the SEBI Acknowledgment Card to access the capital market by raising funds through Book Building Process. He is also the Chairman of Nandan Exim Limited, which has been a listed company. He is a trustee of Chiripal Charitable Trust, Udgam Trust (Udgam High School), Agrawal Seva Samiti, Agrawal Seva Sansthan and Agroha Vikas Trust. He is known for his financial acumen and he drives the Chiripal Group with his insights and vision. He is to oversee our strategic expansion initiative, business development and supervises the finance of our Company.

Mr. Ambalal C. Patel, aged 66 years, is an Independent Director of CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY). He is an engineering graduate and has obtained his Bachelor of Engineering (Metallurgy) degree from the Indian Institute of Science, Bangalore. He has vast experience in project evaluation and project finance. During the tenure from 1973 to 2004, Mr. Ambalal Patel worked with Gujarat Industrial and Investment Corporation [GIIC]. He joined GIIC as a Technical Advisor and later served as a Deputy General Manager. He has vast experience in advising regarding financial matters and project appraisal.

Mr. Murli R. Goyal, aged 50 years, is an Independent Director of CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY). He is a Commerce graduate and has obtained his Bachelor of Commerce degree from Maharashtra University and has also passed CA Intermediate Examination. He is having an experience of 30years in the textile line of business of domestic as well as export market.

23

SECTION VII

BUSINESS & ITS MANAGEMENT

Our Business:

The Company was incorporated as Nova Polyyarn Limited under the Companies Act, 1956 on 17th December 2003 at Ahmedabad with Registrar of Companies, Gujarat, Dadra and Nagar Haveli vide registration no. U17111GJ2003PLC43354.The Registered Office of the company is at Survey No. 396 (P), 395/4 (P), Moraiya Village, Sarkhej - Bavla Highway, Tal. Sanand, Ahmedabad 382210.The company’s promoters are Chiripal whose family name has been changed from “Agarwal” to “Chiripal” and the same has been published in the Gujarat Government Gazette under volume XLVII on August 03, 2006.

The Company was incorporated with the main object as mentioned in Section II under Object Clause of this Information Memorandum. However the Company had not commenced any business activity since its incorporation. The business of the Company has commenced pursuant to Scheme of Demerger with appointed date 1st April 2007. The same will be reflected in the books of accounts of the Company with Effective date 1st October 2009. The details of business activity which will be now carried on by the Company independently has been as follows:

The Nova Petrochemicals Limited is mainly engaged inter-alia in the businesses of:

(a) Selling, marketing, producing, manufacturing of polyester chips, partially oriented yarn , fully drawn yarn and allied products; (Nova I Business) and

(b) Generation of power through turbine power plant, manufacture and sale of partially oriented yarn, fully drawn yarn, texturised yarn, draw twisted yarn and allied products. (the “Nova II Business”).

The scheme of demerger envisaged the spin off of Nova I Business and Nova II Business between GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited). Therefore the Company will now carry on the business identified and recognised as “Nova II Business” pursuant to the scheme. The management of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) has entered into certain MOUs to share certain common assets, facilities as well as supply of power and steam by CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) to GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and supply of polyester chips by GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) to CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) for a further period of 5 years from the Appointed date. However, the CDR EG, while approving the CDR Package has stipulated to continue this sharing arrangement till such time the Company remains under CDR Package for which both the management has given their consent to banks.

Now our Company is vertically integrated textile Company having its operations in India. Our Company is amongst few integrated textile companies in the Country having its presence in the entire value chain for manufacturing of yarn with captive power plant. Our group Companies are amongst few integrated textile companies in the Country having its presence in the entire value chain for manufacturing of yarn to ready made garments with captive power plant.

The Scheme envisaged the segregation of assets & liabilities of Nova Petrochemicals Limited from effective date. The processes of such segregation of assets and liabilities are under progress.

The registration and mutation formalities for the transfer of assets in the name of our Company have been initiated and are being adjudicated by the stamp authority of Government of Gujarat.

The transfer of liabilities to the Company is also under process. The liabilities towards secured creditors are pursuant to Restructuring Package approved by CDR Empowered Group (CDR Package) for erstwhile Nova Petrochemicals Limited and now applicable to both the companies vide its letter dated 31st March

24

2009. Apart from other Terms and conditions mentioned in the Letter dated March 31.03.2009, the significant features of the Financial Restructuring approved by CDR Empowered Group is as follows:

1. Reduced interest rate for T/L @ 10.75%, FITL @ 9.75% and WCTL @10.75% with effect from 01.04.2007,

2. Reschedulement of Principal: Term Loans installments to be repaid in 10 years starting from 01.04.2010 with last installment falling due on 31.03.2017.

3. WCTL and repayment thereof: WCTL of Rs. 19.80 crores to be repayable in 60 months starting from April 2010 and ending at March 2015.

4. FITL: Rs. 12.42 crores to be repaid in 24 monthly installments starting from 31.10.2009 and ending on September 2011.

5. Promoters to bring in additional Rs. 7 crore during the year 2013 to 2016, if cash accruals fall short.

6. To covert unsecured loans from related parties in to equity by preferential allotment of shares subject to the permission of SEBI to avoid likely erosion in the Networth of the company.

7. Pledge of the Promoters’ shares amounting to 30% of the Company’s paid up capital of Rs. 27.00 crore. 40,50,000 shares are already under pledge and remaining shares shall be pledged before the implementation of CDR Package.

8. The MOU of sharing common facilities be extended for a further period of 5 years in case the Company continues to remain in CDR.

9. The promoter Group shall convert raw material credit aggregating Rs.9.85 crore as on 31.03.2007 from other group companies into long term unsecured loan from these companies.

10. Unsecured Loans from associates to the extent of Rs. 44.34 crore as on 31.03.2008 be converted into equity in phased manner by September 2009 so that the TNW remains positive all the time after obtention of SEBI approval.

11. CDR Lenders shall have a right to convert / part of defaulted interest and entire / part of defaulted principal into equity as per SEBI formula for pricing in the event of default persisted beyond two months.

12. The Company shall not effect any change in management set up without prior approval of CDR EG.

As stipulated by CDR EG to Issue preferential allotment of shares towards unsecured loans of related parties and associates after obtention of SEBI approval, Nova Petrochemicals Ltd has already written a letter to SEBI for its approval.The impact of CDR approved package and consequent re-arrangement and segregation of liabilities and transfer to our Company and corresponding security pursuant to the Scheme, is under process.. The Company has intimated all Lenders Bank to give effect of the Scheme and thereby crystallise the liability of the Company.

The Net worth as on 31.03.07:

Demerged Company Resultant Company

Pre- Demerger Rs. 4035.66 lacs Rs. (-) 6.31 lacs

Post – Demerger Rs.2017.83 lacs Rs.2011.52 lacs

25

CORPORATE GOVERNANCE

The provisions of the Listing Agreement, to be entered into with the Stock Exchanges with respect to Corporate Governance, shall be applicable to us immediately upon listing of our Company’s Equity Shares on the Stock Exchanges. We have initiated the process of its implementation in consonance with SEBI Circular and listing agreement in respect of Corporate Governance with respect to broad basing of Board, constituting various committees such as Audit Committee, Remuneration Committee and Shareholders’ / Investors’ Grievance Committee. We undertake to adopt the Corporate Governance code as per Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges. The Company has furnished following Compliance Report with Listing Application to the stock exchanges in the format prescribed by the stock exchange.

Compliance Report on Corporate Governance as on 26.10.2009.

Particulars Clause of Listing Agreement

Compliance Status Yes/No

Remarks

I Board of Directors 49 I YES (A) Composition of Board 49(IA) YES (B) Non-executive Directors’ compensation & disclosures

49 (IB) NO Will be complied with as and when fees / compensation paid to non – executive directors including independent directors.

(C) Other provisions as to Board and Committees

49 (IC) YES

(D) Code of Conduct 49 (ID) YES II. Audit Committee 49 (II) YES (A) Qualified & Independent Audit Committee

49 (IIA) YES

(B) Meeting of Audit Committee NO To meet at least four times a year with no gap of more than four months between two meetings by the member of audit committee will be complied with in future.

(C) Powers of Audit Committee 49 (IIC)

49 (IIB) YES

(D) Role of Audit Committee 49 (IID) YES (E) Review of Information by Audit Committee

49 (IIE) NO Will be complied with by placing information before the audit committee to take review of information.

III. Subsidiary Companies 49 (III) NO There is no subsidiary V. Disclosures 49 (IV) YES (A) Basis of related party transactions

49 (IV A) NO Will be complied with by placing before the audit committee the transactions with related party.

(B) Board Disclosures 49 (IV C) NO Will be complied with by laying down procedure to inform board about the risk assessment and minimization procedures.

(C) Proceeds from public issues, rights issues, preferential issues etc.

49 (IV D) NO Will be complied with when money is raised thorugh an issue (public issue, right issue, preferential issue etc;).

26

(D) Remuneration of Directors 49 (IV E) NO Will be complied with by making disclosure in annual report.

(E) Management 49 (IV F) NO Will be complied with by making management discussion and analysis as part of directos’ report or in addition thereto to disclose in annual report.

(F) Shareholders 49 (IV G) YES V.CEO / CFO Certification 49 (V) NO Will be complied with at the time

of reviewal of fiancial statement and cash flow for the year is prepared.

VI. Report on Corporate Governance 49 (VI) NO Will be complied with by making a separate section in the annual report of the company.

VII. Compliance 49 (VII) NO Will be complied with by obtaining a certificate from the auditors or practicing company secretary and annexing the same with the directors’ report.

In terms of the Clause 49 of the Listing Agreement, our Company has already appointed Independent Directors and constituted the committees. Composition of Board of Directors

The Board of Directors’ have been constituted as per the said clause.

Out of total 4 Board members, 50% of the Board comprises of Independent Directors.

Our Company has constituted the following committees pursuant to the provisions of Clause 49 of the Listing Agreement.

Audit committee

Our Company has formed an Audit Committee vide Board Resolution dated October 26 2009 in compliance with Section 292A of the Companies Act and Clause 49 of the Listing Agreement. The Audit Committee has been constituted with the following Directors:

Name of Director Designation in the Committee Nature of Directorship Mr. Ambalal C. Patel Chairman Independent Director Mr. Murli R. Goyal Member Independent Director Mr. Jyotiprasad D. Chiripal Member Promoter Director

Terms of reference:

Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.Appointment, removal and terms of remuneration of internal auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

1 Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of Section 217 of the Companies Act 1956;

27

2 Changes, if any, in accounting policies and practices and reasons for the same; 3 Major accounting entries involving estimates based on the exercise of judgment by management; 4 Significant adjustments made in the financial statements arising out of audit findings; 5 Compliance with listing and other legal requirements relating to the financial statements; 6 Disclosure of any related party transactions; 7 Qualifications in the draft audit report.

Reviewing, with the Management, the quarterly financial statements before submission to the Board for approval.Monitoring the use of the proceeds of the proposed initial public offering of the Company.Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit. Discussions with internal auditors on any significant findings and follow up thereon. Reviewing internal audit reports and adequacy of the internal control systems. Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of nonpayment of declared dividends) and creditors. To review the functioning of the whistle blower mechanism, when the same is adopted by the Company and is existing. Carrying out any other function as may be statutorily required to be carried out by the Audit Committee. Remuneration Committee

The Remuneration Committee has been formed by the Board of Directors at the meeting held on October 26 2009, in compliance with the Companies Act and Clause 49 of the Listing Agreement. The Remuneration Committee has been constituted with the following Directors:

Name of Director Designation in the Committee

Nature of Directorship

Mr. Murli R. Goyal Chairman Independent Director Mr. Ambalal C. Patel Member Independent Director Mr. Jyotiprasad D. Chiripal Member Promoter Director

Terms of reference

1 To recommend to the Board, the remuneration packages of the Company’s Managing /Joint Managing / Deputy Managing / Whole time / Executive Directors, including all elements of remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives, stock options, pension, retirement benefits, details of fixed component and performance linked incentives along with the performance criteria, service contracts, notice period, severance fees etc.);

2. To be authorised at its duly constituted meeting to determine on behalf of the Board of Directors and on behalf of the shareholders with agreed terms of reference, the Company’s policy on specific remuneration packages for Company’s Managing / Joint Managing / Deputy Managing / Whole-time / Executive Directors, including pension rights and any compensation payment;

3. To implement, supervise and administer any share or stock option scheme of the Company

28

Shareholders’/Investors Grievance Committee

The Shareholders'/ Investors Grievance Committee has been formed by the Board of Directors at the meeting held on October 26 2009, in compliance with the Companies Act and Clause 49 of the Listing Agreement. The Shareholders’/ Investors Grievance Committee has been constituted with the following Directors:

Name of Director Designation in the Committee Nature of Directorship Mr. Ambalal C. Patel Chairman Independent Director Mr. Murli R Goyal Member Independent Director Mr. Jyotiprasad D. Chiripal Member Promoters Director

Terms of reference: “To allot the equity shares of the Company, and to supervise and ensure:

1. Efficient transfer of shares; including review of cases for refusal of transfer / transmission of shares and debentures;

2. Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc;

3. Issue of duplicate / split / consolidated share certificates; 4. Allotment and listing of shares; 5. Review of cases for refusal of transfer / transmission of shares and debentures; 6. Reference to statutory and regulatory authorities regarding investor grievances; 7. And to otherwise ensure proper and timely attendance and redressal of investor queries and

grievances”.

Policy on Disclosures and Internal Procedure for Prevention of Insider Trading.

The Company intends to comply with the provisions of SEBI (Prohibition of Insider Trading) Regulations 1992 on the listing of our Company’s shares on BSE, NSE & ASE. Mr. Ved Prakash D. Chiripal, Director has been nominated as Compliance Officer, who is responsible for setting forth policies, procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the implementation of the code of conduct under the overall supervision of the Board.

Shareholding of Our Directors

As per our Articles, our Directors are not required to hold any Qualification Shares in our Company. Save and except as below, our Directors do not hold any Qualification Shares in our Company as on the date of filing of the Information Memorandum. The pre-scheme shareholding of present Directors is as follows:

Sr. No. Names of our Directors No. of Equity Shares % of Pre-Issue Shareholding

1 Shri Jyotiprasad D. Chiripal 6250 12.50% 2 Shri Vedprakash D. Chiripal 6250 12.5025% 3 Shri Ambalal C. Patel NIL Nil 4 Shri Murli D. Goyal NIL Nil

Interest of Directors (Other than Promoter Directors)

All our Directors may be deemed to be interested in the contracts, agreements / arrangements entered into or to be entered into by our Company with any company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations.

Our Directors do not have any interest in any property acquired by our Company in a period of two years before filing the Information Memorandum with stock exchanges or proposed to be acquired by us as on date of filing the Information Memorandum with stock exchanges.

29

OUR PROMOTER GROUP

Our promoter group consists of listed companies, unlisted companies, private limited companies, partnership firms; proprietorship concerns and charitable trust, the names of such concerns can be read from the table below. Considering the large no. of firms, for the sake of containing concise and precisely significant and material information, the details as to Board of Directors, Shareholding Pattern, Capital Structure, Financial Statements and prices of share of only listed companies and companies proposed to access the capital market have been given in this Information Memorandum. Natural persons forming part of our Promoter Group (due to relationship with the Promoters)

Relationship Promoters & Family Members Who are Individuals Vedprakash D.

Chiripal Jaiprakash Chiripal Jyotiprasad Chiripal Brijmohan Chiripal

Father Late Devkinandan Chiripal

Late Devkinandan Chiripal



Mother Late Shantidevi Chiripal

Late Shantidevi Chiripal

Late. Shantidevi Chiripal

Late. Shantidevi Chiripal

Brother Shri Jyotiprasad Chiripal Shri Jaiprakash Chiripal Shri Brijmohan Chiripal

ShriJyotiprasad Chiripal Shri Vedprakash Chiripal Shri Brijmohan Chiripal

Shri Jaiprakash Chiripal Shri Vedprakash Chiripal Shri Brijmohan Chiripal

Shri Jaiprakash Chiripal Shri Vedprakash Chiripal Shri Jyotiprasad Chiripal

Sister Smt. Pushpa Bindal Smt. Urmila Agarwal

Smt. Pushpa Bindal Smt. Urmila Agarwal



Spouse Smt. Savitridevi Chiripal

Smt. Manjudevi Chiripal

Smt. Urmiladevi Chiripal

Smt. Pritidevi Chiripal

Children Mr. Vishal Chiripal, Mrs. Kavita Sarogi, Mrs. Babita S Goyal, Ms. Shivani V Chiripal

Ms. Nishi JGoyal, Ms. Nidhi J Chiripal, Kr. Vansh J Chiripal

Shri Deepak J Chiripal, Ms. Shaloo J Agarwal

Mr. Ronak B Chiripal, Ms. Ruchi B Chiripal, Ms. Priyank B Chiripal

Spouse’s Father

Late Ramswarupdas Agrawal

Shri. Surendra Goyal Shri Gopiramji Kokra Shri. Bhagawatswarup Agarwal

Spouse’s Mother

Late Bhagawatidevi R Agrawal

Smt. Gayatri Goyal Smt. Gomtidevi Gopiramji Kokra

Smt. Savitridevi B Agarwal

Spouse’s Brother

Shri Sunilkumar Raghuveerji Agrawal, Shri Girishkumar Raghuveerji Agrawal, Shri Kamleshkumar Raghuveerji Agrawal

Shri. Deepak Goyal Shri Ahilkumarji Gopiramji Kokra, Shri Ajaykumarji Gopiramji Kokra, Shri Nirajkumar Gopiramji Kokra

Mr. Satish Agarwal, Mr. Pramod Agarwal Mr. Dinesh Agarwal, Mr. Kamal Agarwal,

Late Shri Arun Agarwal Spouse’s Sister

Smt. Pushpadevi Shyamkumar Kejriwal Smt. Kusumdevi Vinodkumarji Sharma Smt.Sarajdevi Vinodkumar Agrawal

Smt. Pinki Kanodia Smt. Kiran Singhal Smt. Sanju Chiripal Smt. Anju Agarwal Smt. Jyotsana Agarwal Smt. Rekha Agarwal

Smt. Sheeladevi Gaurishankarji Goyal Smt. Pujadevi Murlikumarji Goyal

Ms. Snehlata V Didwania

30

In case the Promoter is an Individual, Interest of the Promoters Relationship Vedprakash D.

Chiripal Jaiprakash D. Chiripal

Jyotiprasad D. Chiripal

Brijmohan D. Chiripal

Any company in which 10% or more of the share capital is held by the promoter or a firm or HUF in which the promoter or any one or more of his immediate relatives is a member

1. Bhushan Petrofils Private Limited 2. Sparow Exports Private Limited 3. Chiripal Enterprises Limited 4. Chiripal Textile Mills Private Limited 5. Chiripal Lifestyle Limited 6. Vishal Fabrics Private Limited 7 Chiripal Charitable Trust 8. Nandan Exim Limited 9. Vraj Integrated Textile Park Limited 10. Deepak Finance Corporation 11. Vishal Finance Corporation 12. Shree Balaji Exports 13. Vyom DevelopeRs 14. Girish Textiles 15. Rotary Screen Printing Works 16. S. S. Lene 17. Vedprakash Jaiprakash HUF 18. Vedprakash Jyotiprasad HUF 19. Vedprakash & Brothers HUF 20. S. Jyotiprasad HUF 21. S. Vedprakash HUF 22. V. Brijmohan HUF 23. V. Jaiprakash HUF 24. V. Jyotiprasad HUF 25. Keshoram Dwarkadas HUF 26. Devkinandan and sons HUF 27. Vedprakash Brijmohan HUF

1. Bhushan Petrofils Private Limited 2. Sparow Exports Private Limited 3. Shanti Exports Private Limited 4. Chiripal Enterprises Limited 5. Chiripal Textile Mills Private Limited 6. Chiripal Lifestyle Limited 7. Vishal Fabrics Private Limited 8. Chiripal Charitable Trust 9. Nandan Exim Limited 10. Vraj Integrated Textile Park Limited 11. Deepak Finance Corporation 12. Vishal Finance Corporation 13. Shree Balaji Exports 14. Vedprakash Jaiprakash HUF 15. Vedprakash Jyotiprasad HUF 16. Vedprakash & Brothers HUF 17. S. Jyotiprasad HUF 18. S. Vedprakash HUF 19. V. Brijmohan HUF 20. V. Jaiprakash HUF21. V. Jyotiprasad HUF 22. Keshoram Dwarkadas HUF 23. Devkinandan and sons HUF 24. Vedprakash Brijmohan HUF

1. Bhushan Petrofils Private Limited 2. Shanti Exports Private Limited 3. Prakash CalendaRs Private Limited 4. Chiripal Enterprises Limited 5. Chiripal Textile Mills Private Limited 6. Chiripal Lifestyle Limited 7. Vishal Fabrics Private Limited 8. Chiripal Charitable Trust 9. Nandan Exim Limited 10. Vraj Integrated Textile Park Limited 11. Deepak Finance Corporation 12. Vishal Finance Corporation 13. Shree Balaji Exports 14. Vishal Developers 15. S.S. Lene 16. Vedprakash Jaiprakash HUF 17. Vedprakash Jyotiprasad HUF 18. Vedprakash & Brothers HUF 19. S. Jyotiprasad HUF 20. S. Vedprakash HUF 21. V. Brijmohan HUF 22. V. Jaiprakash HUF 23. V. Jyotiprasad HUF 24. Keshoram Dwarkadas HUF 25. Devkinandan and sons HUF 26. Vedprakash Brijmohan HUF

1. Bhushan Petrofils Private Limited 2. Shanti Exports Private Limited 3. Prakash Calendars Private Limited 4. Chiripal Enterprises Limited 5. Chiripal Textile Mills Private Limited 6. Chiripal Lifestyle Limited 7. Vishal Fabrics Private Limited 8. Chiripal Charitable Trust 9. Nandan Exim Limited 10. Vraj Integrated Textile Park Limited 11. Deepak Finance Corporation 12. Vishal Finance Corporation 13. Shree Balaji Exports 14. Vishal Developers 15. S.S. Lene 16. Vedprakash Jaiprakash HUF 17. Vedprakash Jyotiprasad HUF 18. Vedprakash & Brothers HUF 19. S. Jyotiprasad HUF 20. S. Vedprakash HUF 21. V. Brijmohan HUF 22. V. Jaiprakash HUF 23. V. Jyotiprasad HUF 24. Keshoram Dwarkadas HUF 25. Devkinandan and sons HUF 26. Vedprakash Brijmohan HUF

31

Relationship Vedprakash D. Chiripal

Jaiprakash D. Chiripal

Jyotiprasad D. Chiripal

Brijmohan D. Chiripal

Any company in which a company (mentioned above) holds 10% or more of the equity share capital

NIL NIL NIL NIL

Any HUF or firm in which the aggregate share of the promoter and his immediate relatives is equal to or more than 10% of the total holding

1. Vedprakash Jaiprakash HUF 2. Vedprakash Jyotiprasad HUF 3. Vedprakash & Brothers HUF 4. S. Jyotiprasad HUF 5. S. Vedprakash HUF 6. V. Brijmohan HUF 7. V. Jaiprakash HUF 8. V. Jyotiprasad HUF 9. Keshoram Dwarkadas HUF 10. Devkinandan and sons HUF 11. Vedprakash Brijmohan HUF



1. Vedprakash Jaiprakash HUF 2. Vedprakash Jyotiprasad HUF 3. Vedprakash & Brothers HUF 4. S. Jyotiprasad HUF 5. S. Vedprakash HUF 6. V. Brijmohan HUF 7. V. Jaiprakash HUF 8. V. Jyotiprasad HUF 9. Keshoram Dwarkadas HUF 10.Devkinandan and sons HUF 11. Vedprakash Brijmohan HUF

Except to the extent of reimbursement of expenses incurred at actual, remuneration or benefits in their capacity as Directors and their shareholding in our Company our Promoters have no other interest in our Company.

Except as stated in "Related Party Transactions" to the extent of shareholding in our Company either by themselves or shareholding of companies in which they are interested, our Promoters do not have any other interest in our Company.

LISTED COMPANIES:

1. Nandan Exim Limited:- Nandan Exim Limited was incorporated (“NEL”) under the Companies Act, 1956, on August 9, 1994, having Registration No. 04-22719 of 1994-95. The Registered Office of NEL is situated at Survey No. 198/1, 203/2, Saijpur-Gopalpur, Pirana Road, Piplej, Ahmedabad 382 405. NEL approached capital markets with an Initial Public Offering of Equity Shares in the year 2005. The business of NEL is to manufacture of denim and weaving grey fabric.

As stated in the main objects contained in its memorandum of association, that company is permitted to carry on the business of spinners, weavers, manufacturers, ginners, processors, packers and balers of cotton, jute, hemp, silk, rayon, nylon, strechlon, man-made synthetic fibers, staple fibers, wool and any other fibrous materials and the business of manufacturing, weaving, bleaching, printing, and selling yarn, cloth, linen, rayon, and other goods and/or merchandise made there from.

Board of Directors as on 31.03.2011

Mr. Vedprakash D. Chiripal Mr. Brijmohan D. Chiripal Mr. Gautam Gandhi Mr. Ambalal C. Patel

32

CORPORATE MATTERS

REGULATORY AND STATUTORY DISCLOSURES

Authority for the Scheme

The Hon’ble High Court of Gujarat, vide its order dated 27 August 2009 has approved the Scheme of Arrangement amongst GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) and their respective shareholders and creditors (the “Scheme”).

Prohibition by SEBI

The Company, its directors, its promoters, other companies promoted by the promoters and companies with which the Company’s directors are associated as directors have not been prohibited from accessing the capital markets under any order or direction passed by SEBI except that debarment order dated 12.01.2010 passed against erstwhile Nova Petrochemicals Limited from buying, selling and accessing from the Capital market for the period of two years from the date of order.

General Disclaimer from the Company

The Company accepts no responsibility for statement made otherwise than in the Information Memorandum or in the advertisements to be published in terms of Clause 5 of Part A of SEBI Circular dated 03.09.2009 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. The Company will make best endeavor to make available all information to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner.

Disclaimer – BSE

As required, a copy of this Information Memorandum has been submitted to BSE. The BSE has vide its letter dated 3 March, 2009 approved the Scheme of Arrangement under clause 24(f) of the Listing Agreement and by virtue of that approval, the BSE’s name is included in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. The BSE does not in any manner:

warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; or warrant that this Company’s securities will be listed or will continue to be listed on the BSE; or take any responsibility for the financial or other soundness of this Company; and it should not for any reason be deemed or construed to mean that this Information Memorandum has been cleared or approved by the BSE.

Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Disclaimer – NSE

As required, a copy of this Information Memorandum has been submitted to NSE. The NSE has considered the request of the Company to condone the approval of the scheme of arrangement in the nature of demerger under clause 24(f) of listing agreement and by virtue of that NSE’s name is included in this Information memorandum as one of the stock exchanges on which this Company’s securities are proposed to be listed. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that this Information Memorandum has been cleared or approved by NSE; nor does NSE in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; nor does it warrant that the Company’s securities will be listed or continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of the Company.

33

Every person who desires to apply for or otherwise acquire any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription or acquisition, whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

Disclaimer – ASE

As required, a copy of this Information Memorandum has been submitted to ASE. The ASE has vide its letter dated 30 November, 2007 approved the Scheme of Arrangement under clause 24(f) of the Listing Agreement and by virtue of that approval, the ASE’s name is included in this Information Memorandum as one of the Stock Exchanges on which the Company’s securities are proposed to be listed. The ASE does not in any manner:

warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; or warrant that this Company’s securities will be listed or will continue to be listed on the ASE; or take any responsibility for the financial or other soundness of this Company; and it should not for any reason be deemed or construed to mean that this Information Memorandum has been cleared or approved by the ASE.

Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the ASE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Filing This Information Memorandum is being filed with BSE, NSE & ASE. Listing An application has been made to BSE, NSE & ASE for permission to deal in and for an official quotation of the Equity Shares of the Company. The Company has nominated BSE as the Designated Stock Exchange for the aforesaid listing of the shares. Demat Credit The Company has received the ISIN No.INE672K01017 from NSDL. The shares of the Company are credited in the Demat Account of respective Demat Account holder on or around 05.12.2009 by the depositories. Expert Opinions Save as stated elsewhere in this Information Memorandum, we have not obtained any expert opinions. Previous rights and public issues if any The Company has not made any previous public or rights issue since incorporation. Commission and brokerage on previous issues Since the Company has not issued shares to the public in the past, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since its inception.

34

Companies under the Same Management There are no companies under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act, other than included in this Information Memorandum. Promise vis-à-vis performance As the Company is approaching the exchanges for listing of its shares for the first time, pursuant to the scheme of arrangement in the nature of demerger approved by Hon’ble High Court of Gujarat vide its order dtd.27.08.2009, there is no information worth reporting. Not Applicable, since this is the first time the Company is getting listed on the Stock Exchange. Outstanding debentures or bonds and redeemable preference shares and other instruments issued by the issuer Company outstanding There wasno outstanding debentures or bonds and redeemable preference shares and other instruments issued by the Company as on 26.10.2009. However, on account of conversion of unsecured loans into Preference Shares pursuant to the direction of CDR, EG the following Preference Shares are pending as on date for which separate listing application will be made: 5,00,000 8% Non – Cumulative Redeemable Preference Shares of Rs. 100/- each for the duration of 5 years Stock Market Data for Equity shares of the Company Equity shares of the Company are not listed on any stock exchanges. TheCompany is seeking approval for listing of its shares through this Information Memorandum Disposal of Investor Grievances The Company has appointed Mr. Ved Prakash D. Chiripal, Director as theCompliance Officer and he may be contacted in case of any problem at the following address: Compliance Officer Mr. Ved Prakash D. Chiripal Chiripal House, Shivranjani Cross Road, Satelite, Ahmedabad – 380 015

35

SECTION VIII

REASONS FOR THE SCHEME OF THE ARRANGEMENT IN THE NATURE OF DEMERGER.

1. Rational of the Scheme:

The extract of the rational of the scheme as has been furnished to the Hon’ble High Court of Gujarat is as follows:

“The Board of Directors of the applicant resulting company think it appropriate to bifurcate the two industrial units of demerged Company in separate entities to achieve a sustained growth, development and for the purpose of the future growth strategies of both the Companies. Accordingly, it has been proposed to spin off the Demerged undertaking of Nova Petrochemicals Ltd situated at Survey Number 391, 395/4, 396[Paiki], at Village Moraiya, Taluka Sanand, District Ahmedabad in the State of Gujarat to the applicant resulting company. The management envisages the following reasons / advantages for demerger:

[1] The management of the applicant resulting Company is of the opinion that the demerger and transfer of the undertaking of NPL to NYL will unlock the value and potential of the business. The management further feels that demerger shall provide opportunity to make the optimum use of the facilities and future growth.

[2] The applicant resulting Company shall be in a position to focus more profitably on the business of demerged undertaking and help in turnaround the operations. Moreover to overcome cutthroat competition among the various spinning units and to streamline operation through management initiatives, to streamline management set-ups and to apply adequate measures for suitable corporate governance, it is advantageous to acquire the manufacturing facilities of demerged undertaking. [3] On account of demerger, the applicant resulting Company shall be in a position to focus on more profitable activities of the demerged undertakings on account of decentralization of duties, powers and authorities.

[4] After demerger, the domestic market as well as the export potential of the product segment shall be well explored on account of decentralization of activities.

[5] The demerger will enhance the intrinsic value of the shares of applicant resulting company, which would be advantageous to the shareholders.

[6] After demerger, the resulting company would enter in the products having potential of mass consumption with wide and deep market reach to maximize the profits.

[7] After demerger, the management of the applicant resulting Company would arrange required funds for working capital requirements of demerged undertaking for making optimum use of the manufacturing facilities which are presently under utilized due to pressure on working capital.

[8] The demerger is essential to carry out business operations more effectively and efficiently. The demerger is essential in the larger interests of the Shareholders, Creditors, and Employees and in the general interest of the public, exchequer. The arrangement/ reorganization is to ensure better operational management and focus on accelerated growth of the individual segments essential in the current liberalized scenario in meeting global practices.

Accordingly, the Boards of Directors of the Resulting Company and the Demerged Company have approved, by passing a resolution, the Scheme of Demerger.”

“Clause 37” Demerged company and Resulting Company will make necessary applications before the High Court for the sanction of this Scheme of Arrangement under Sections 391 to 394 of the Act.

2. Salient features of the scheme:

Scheme of Demerger (“the Scheme”) of Nova Petrochemicals Ltd (Demerged Company) and Nova Polyyarn Ltd. (Resulting Company), has been approved by Hon’ble Gujarat High Court vide its order dated August 27, 2009

36

and issuance of certified copy of order dated 18th September 2009. ROC Gujarat has registered the Form No 21 filed by the Company. This reinforces the completion of all Formalities related to the scheme including Change of Name, Restructure of Share Capital and Change of Address of Registered Office. The salient feature of the scheme were communicated to the members of the Company vide circular dtd. 05.10.2009.

3. The Implementation of the Scheme are produced below:

1. Effective Date: As per clause (G) of definition:

“Effective Date” means the last of the dates on which the conditions and matters referred to in Clause 39 hereof occur or have been fulfilled or waived;

References in this Scheme to the date of “coming into effect of this Scheme” or “effectiveness of this Scheme” shall mean the Effective Date;”

“Clause 39” This Scheme is conditional upon and subject to:

(a) this Scheme being agreed to by the respective requisite majorities of the various classes of members and creditors (wherever applicable) of the Demerged Company and the Resulting Company as required under the Act and the requisite order of the High Court referred to in Clause 37 hereof being obtained;

(b) such other sanctions and approvals including but not limited to in principle approvals, sanctions of any Governmental Authority, as may be required by law in respect of this Scheme being obtained; and

(c) the certified copy of the order of the High Court referred to in this Scheme being filed with the Registrar of Companies, Gujarat.”

In view of the compliance of clause 39 with respect to Effective Date:

clause (a) above, the certified copy of Order of the High

Court was issued on 18.09.2009 and clause (c) above, the certified copy of Order of the High Court issued on 18.09.2009 was filed with the Office of ROC Gujarat on 24.09.2009, however in respect of Clause (b) above, the Board of Directors of both the companies at its respective meeting held on 05.10.2009 viewed that to the best of present circumstances as prevailed thereon there was no other sanctions and approvals as may be required by law in respect of this Scheme from any Government Authority and therefore the Board of Directors of both the companies keeping in mind the administrative convenience as also publication of combined unaudited financial results for the quarter ended on 30th September 2009 decided to keep the 1st October 2009 as the Effective Date for the purpose of the Scheme.

To consider the combined unaudited financial results, the meeting of Board of Directors of the GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) has been scheduled on Saturday, October 31, 2009 wherein Mr. Jyoti Prasad D. Chiripal and Mr. Ved Prakash D. Chiripal were invited to attend and participate in the meeting for approval of combined unaudited financial results.

2. “Demerger” means the transfer of assets and liabilities by way of demerger of the Demerged Undertaking of the Demerged Company to the Resulting Company, arrangement / compromise with creditors of secured and unsecured loans, reorganisation of capital structure of demerged Company and resulting Company, reorganisation of management and business operations and the consequent issue of new equity shares to the shareholders of demerged Company by the Resulting Company and reduction in face value of existing shares of demerged Company;” therefore,

[A] Transfer of Assets:

The Nova II Business or Nova II of the Demerged Company, on a going concern basis, consisting inter-alia of:

72202.83 square mtrs land and construction, structures thereon, 7.5 MW Turbine power generation plant , 4 lines of Partially Oriented Yarn (POY) and 4 Lines of Fully Drawn Yarn (FDY) , 4 numbers texturising machines and 14 number draw twisting machines, other fixed assets alongwith stores , tools, spares etc. located at Survey

37

Number 391, 395/4, 396(Paiki), at village Moriaya, Taluka Sanand, Distrct Ahmedabad in the State of Gujarat; and shall mean and include (without limitation):

(a) all assets and property of Nova II Business whether movable or immovable, tangible or intangible, including all the plant and machinery, buildings, offices, capital work-in-progress, rolling stock, current assets (including inventories, sundry debtors, bills of exchange, loans and advances), vehicles, D.G. sets, godowns, stocks and stores, warehouses, furniture, fixtures, office equipment, appliances, accessories, power lines, water pipelines, depots, power plants at the location of the Nova II at survey number 391, 395/4, 396(p), at village Moriaya, Taluka Sanand, District Ahmedabad in the State of Gujarat alongwith rights, share of any joint assets, and other facilities and the Premises (as defined hereunder);

(b) all permits, quotas, rights, entitlements, industrial and other licenses, bids, tenders, letters of intent, expressions of interest, development rights (whether vested or potential and whether under agreements or otherwise), local government (panchayat) permissions, approvals, consents, subsidies, tenancies in relation to the office and/or residential properties for the employees, benefit of any deposits, privileges, all other rights including sales tax deferrals and exemptions (if any) and other benefits, lease rights and prospecting licenses (including the benefit of any applications made therefore) and the surface rights in relation thereto, receivables, and liabilities related thereto, licenses, powers and facilities of every kind, nature and description whatsoever, rights to use and avail of telephones, telexes, facsimile connections and installations, utilities, electricity and other services, provisions and benefits of all agreements, contracts and arrangements and all other interests in connection with or relating to the Nova II Business;

(c) all earnest moneys and/or security deposits paid by the Demerged Company in connection with or relating to the Nova II Business;

(d) all records, files, papers, engineering and process information, computer programmes, software licenses, drawings, manuals, data, catalogues, quotations, sales and advertising materials, lists of present and former customers and suppliers, customer credit information, customer pricing information, and other records whether in physical or electronic form in connection with or relating to the Nova II Business; and

(e) all present and future liabilities (including contingent liabilities and the Transferred Liabilities, as defined hereunder) and shall further include any obligations under any licenses or permits and more particularly the obligations under the Advance License Scheme, appertaining or relatable to the Nova II Business.

(f) all joint asset namely trademarks, trade names, brands, patents, copyrights and all other intellectual property, whether registered or unregistered, list/ details of which has already been agreed ;

[B] Transfer of Liabilities: Loans, Borrowings and Other liabilities as per section 3 clause 16 of the scheme:

(a)In so far as loans of the Demerged Company are concerned, the loans, borrowings listed in Schedule IV and such of the general or multipurpose loans and liabilities listed in Schedule V which are to be transferred to the Resulting Company in terms of this Part II (the “Transferred Liabilities”) being a part of the Demerged Undertaking shall, upon coming into effect of this Scheme and subject to sub-clause (b) below and subject to section 4 of part II, without any further act or deed, become loans, borrowings and debentures of the Resulting Company, and all rights, powers, duties and obligations in relation thereto shall be and stand transferred to and vested in and shall be exercised by or against the Resulting Company as if it had entered into such loans, incurred such borrowings.

(b) In so far as the existing security in respect of the Transferred Liabilities (more particularly set out in Schedule IV and Schedule V) is concerned, such security shall, without any further act, instrument or deed be modified and shall be extended to and shall operate only over the assets comprised in the Demerged Undertaking which have been charged and secured in respect of the Transferred Liabilities as transferred to the Resulting Company pursuant to Part II of this Scheme. Provided that if any of the assets comprised in the Demerged Undertaking which are being transferred to the Resulting Company pursuant to Part II of this Scheme have not been charged or secured in respect of the Transferred Liabilities, such assets shall remain unencumbered and the existing security referred to above shall not be extended to and shall not operate over such assets. The absence of any formal amendment which may be required by a lender or third party shall not affect the operation of the above.

38

(c) In so far as the assets comprising the Remaining Business are concerned, the security over such assets relating to the Transferred Liabilities are concerned, the same shall, without any further act, instrument or deed be released and discharged from the obligations and security relating to the same. The absence of any formal amendment which may be required by a lender or third party shall not affect the operation of the above.

(d) Further, in so far as the assets comprised in the Demerged Undertaking are concerned, the security and charge over such assets relating to any loans which are not transferred pursuant to this Scheme (and which shall continue with the Demerged Company), shall without any further act or deed be released from such encumbrance and shall no longer be available as security in relation to such liabilities.

(e) Further, upon re-arranging and segregation of secured loans between demerged company and Resulting Company on effective date and after applying section 4 of part II on such secured loans, the secured loans of demerged company shall be continued to be guaranteed with the personal guarantees given by Mr. Shyam Sunder Gupta, Mr. Mohan Gupta and Sunil Kumar Gupta and with the corporate guarantee of Gupta Synthetics Limited and Polycoat India Private Limited only and the secured loans of resulting company shall be guaranteed with the personal guarantees of Mr. Ved Prakash Chiripal, Mr. Jyoti Prakash Chiripal, Mr. Brij Mohan Chiripal and with the corporate guarantees of Chiripal Industries Limited only without any act, instrument or deed. The personal / corporate guarantees, if any, given by Mr Ved prakash chiripal,Mr.Jyoti Prasad Chiripal and Mr. Brij Mohan Chiripal in demerged company shall be deemed to be discharged without any further act, deed on their part. The absence of any formal amendment, which may be required by a lender shall not affect the operation of the above. Without prejudice to the provisions of the foregoing clauses and upon the effectiveness of this Scheme, the Demerged Company and the Resulting Company shall execute any instruments or documents or do all the acts and deeds as may be required, including the filing of necessary particulars and/or modification(s) of charge, with the Registrar of Companies, Gujarat, respectively to give formal effect to the above provisions, if required.

(f) If desired by any secured lender, the Demerged Company and the Resulting Company shall enter into and execute such further deeds, documents or writings as may be required to give effect to the provisions of this Clause without incurring any financial cost on stamping charges, registration charges or any other charges, for such execution as such financial charges has already been paid at the time of execution of original documents.

(g) Upon the coming into effect of this Scheme, the Resulting Company alone shall be liable to perform all obligations in respect of the Transferred Liabilities after applying section 4 of the part II, and the Demerged Company shall not have any obligations in respect of the Transferred Liabilities, and the Resulting Company shall indemnify the Demerged Company in this behalf. Similarly, the demerged Company alone shall be liable to perform all obligations in respect of the liabilities other than Transferred Liabilities, and the Resulting Company shall not have any obligations in respect of the liabilities other than Transferred Liabilities, and the demerged Company shall indemnify the Resulting Company in this behalf.

39

Schedule IV of the scheme

Details of the secured liabilities which arose out of the activities or operations of the Demerged Undertaking to be transferred to Resulting Company and amount to be remained with Demerged Company.

(Rs. In Lacs)

PARTICULARS Amount for Demerged Undertaking to be transferred to Resulting Company

Amount to remain with Demerged Company

Total Amount

SECURED LOANS A.Term Loans from Banks: Bank of Baroda Central Bank of India State Bank of India State Bank of Indore UCO Bank

683.62 369.88 738.76 692.84

1434.09

568.50 307.59 613.99 576.16

1192.57

1252.12 677.47

1352.75 1269.00 2626.66

Total-Consortium Banks 3919.19 3258.81 7178.00 Add : The Dhanlakshmi Bank Ltd. 74.97 62.34 137.31 Sub Total 3994.16 3321.15 7315.31Add : Installment and interest falling due before filing of Scheme and paid after 31.03.2007

118.27

98.72

216.99

Total(A) 4112.43 3419.87 7532.30B.Working Capital Loans from Banks : Bank of Baroda State Bank of India State Bank of Indore UCO Bank Central Bank of India

628.50 593.94 33.97

295.45 219.34

522.66 493.92 28.24

245.69 182.40

1151.16 1087.86

62.21 541.14 401.74

Sub Total 1771.20 1472.91 3244.11Add : interest falling due before filing of Scheme and paid after 31.03.2007

9.89

8.23

18.12

Total(B) 1781.09 1481.14 3262.23TOTAL CREDITORS FOR SEC. LOANS(A+B) 5893.52 4901.01 10794.53

(h) It is expressly provided that, save as mentioned in this Clause and in section 4 of part II, no other term or condition of the Transferred Liabilities is modified by virtue of this Scheme except to the extent that such amendment is required by necessary implication.

(i) Subject to the necessary consents being obtained, if required, in accordance with the terms of this Scheme, the provisions of this Clause and section 4 of part II shall operate, notwithstanding anything to the contrary contained in any instrument, deed or writing or the terms of sanction or issue or any security document; all of which instruments, deeds or writings shall stand modified and/or superseded by the foregoing provisions.

40

Schedule V of the scheme Details of the general or multipurpose borrowings: (Rs. In Lacs)

PARTICULARS

Amount for Demerged Undertaking to be transferred to Resulting Company

Amount to remain with Demerged Company

Total Amount

A.UNSECURED LOANS A.P. Agarwal & Co. Aditya Tex Chem Amit Yarn Anju Synthetics Asian Trading Co. Bansal Synthetics Filament Yarn Trading Co. Fortune Fibre Meenakshi Rayon Paras Synthetics Parth Agency Pravin Filaments Puneet Enterprise R.N. Synthetics R.K. Rayon Raj Synthetics Pvt. Ltd. Rawalwasia Textile Industries P. Ltd. Riddhi Siddhi Yarn Rungta Polyfab S.R. Synthetics S.P. Corporation Satish & Co. Saurabh Syntex Shakti Enterprise Shakti Yarn Pvt. Ltd. Shree Navkar Corporation Shree Salasar Polyfab Siddheshwar Fibre Sunshine Trading Co. Surendra Marketing Urvi Fabrics Vaishnav Enterprise Vinay Fabrics Vinayak Synthetics Landesbank Baden- Wurttemberg Chiripal Industries Ltd. Gupta Dyeing & Ptg. Mills Pvt. Ltd. Gupta Silk Mills Pvt. Ltd. Gupta Synthetics Ltd. Npl Power Pvt. Ltd. Shanti Processor Ltd. Vishal Fabrics Pvt. Ltd. Deepak Enterprise

0.41 2.73 8.19 5.46 8.19 1.64 0.76 2.73 5.46 3.93 5.46 5.46 8.19 2.05 2.73 5.46 2.73 2.73 3.28 2.73 2.73 5.46 0.55 5.46 5.46 2.73 5.46 1.09 2.73 3.28 5.46 1.09 4.09 1.64

262.36 190.00 82.50

116.00 40.00 10.00

1040.28 832.60

0.54

0.34 2.27 6.81 4.54 6.81 1.36 0.64 2.27 4.54 3.27 4.54 4.54 6.81 1.70 2.27 4.54 2.27 2.27 2.72 2.27 2.27 4.54 0.45 4.54 4.54 2.27 4.54 0.91 2.27 2.72 4.54 0.91 3.41 1.36

218.19 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.75 5.00

15.00 10.00 15.00 3.00 1.40 5.00

10.00 7.20

10.00 10.00 15.00 3.75 5.00

10.00 5.00 5.00 6.00 5.00 5.00

10.00 1.00

10.00 10.00 5.00

10.00 2.00 5.00 6.00

10.00 2.00 7.50 3.00

480.55 190.00 82.50

116.00 40.00 10.00

1040.28 832.60

0.54 TOTAL CREDITORS FOR UNSECURED LOANS 2701.83 324.24 3026.07B.CURRENT LIABILITIES 3806.37 3165.34 6971.71

C.PROVISIONS 54.82 45.58 100.40

TOTAL 6563.02 3535.16 10098.18

41

3. ARRANGEMENT / COMPROMISE WITH CREDITORS FOR SECURED AND UNSECURED LOANS / DEPOSITS (SECTION 4 of the Scheme)

“The Demerged Company and Resulting Company would pay respective apportioned share as shown in Schedule IV and Schedule V of entire amount outstanding / payable to the Creditors for secured and unsecured loans/deposits excluding the creditors for goods, expenses and facilities of existing Company.”

CREDITORS FOR SECURED LOANS:

The apportioned outstanding amount of respective secured lender as shown in schedule IV shall be repaid by the Demerged and Resulting Company in the following manner:

a. All secured lender would apply interest @ 10.75% per annum on Term Loan and working Capital term loan and @ 9.75% per annum on Funded Interest Term Loan (FITL).

b. The terms loan installment falling during 2007 and 2008 to be deferred and the entire term loan (Rs.7315.31 lacs) to be paid in 7 years (after 2 years moratorium ) from effective date starting from 1.4.2009 and with last installment due on 31.3.2016 or as may be decided by CDR and Creditors for secured loans from time to time.

c. All secured lender would convert 60% of total working capital limits of Rs. 33.00 crores into Working Capital Term Loan (WCTL) of Rs. 19.80 crores ; repayable in 36 months after a moratorium of 2 years. The remaining 40% of working capital limits of Rs 13.20 crores to be operative as a regular working capital limit supported by advance value and drawing power or as may be decided by CDR and Creditors for secured loans from time to time.

d. All secured lender would convert 50% of interest accrued on term loans from 1.4.2007 to 30.9.2008 into FITL, which would be repayable in 18 monthly installments from 31.10.2008 or as may be decided by CDR and Creditors for secured loans from time to time.

e. To safeguard the interest of creditors for secured loans, respective promoters of Demerged Company and Resulting Company would inject an aggregate amount of Rs. 10 crores comprises of Rs. 500 lakh by Demerged Company and Rs. 500 Lakh by Resulting Company. Similarly, as a measure of further boost the finances of the respective Company, the promoters group proposes to convert unsecured creditors aggregating to Rs. 8.85 crores from other group companies into long term unsecured creditors and accordingly the Demerged Company and Resulting Company would covert Rs 442.50 lakh respectively. The said conversion of creditors into unsecured loans would take place on 1.4.2007. Moreover, promoters would pledge 30% of the share capital of Rs. 1350 lakh of Demerged Company and Resulting Company for their respective loans as per section 3 of part II. The said 30% of equity shares capital of respective Company includes equity shares already pledged aggregating to 4050000 equity shares of existing Company. The shares already pledged/to be pledged by existing Company would be replaced with the new shares issued by the Demerged Company and Resulting Company for continuing security of respective loans as per section 3 of part II.

f. The banks would have a right of recompense in the ratio of liabilities apportioned from demerged company and resulting Company as per liabilities shown in schedule V of the` scheme as given here in above.

CREDITORS FOR UNSECURED LOANS / DEPOSITS:

The Demerged Company and Resulting Company would pay respective apportioned share as provided in schedule V of the scheme of entire amount outstanding / payable to the Creditors for unsecured loans/deposits excluding the creditors for goods, expenses and facilities of existing Company. The said apportioned outstanding amount shall be repaid by the Demerged Company and Resulting Company in the following manner:

(i) The Principal amount payable as per the books of accounts of the Demerged Company and Resulting Company as provided in schedule V of the scheme as on 31.3.2007 to each of the creditor in this category shall be settled under the scheme. The Demerged Company and Resulting Company shall pay 100% of the principal amount payable as on 1.4.2007 in 5 equal annual installments commencing from 1.4.2012. The said outstanding amount would not carry any interest if paid on stipulated dates. In case, the repayment would delay beyond terminal date, such delayed installment would carry simple interest @ 5% per annum after stipulated date.

42

(ii) The unpaid interest till effective date would be converted in FITL by Demerged Company and Resulting Company on the basis of principal amount apportioned. The said FITL would be repaid on 31.3.2011 by Demerged Company and Resulting Company. The said FITL would not carry any interest if paid on terminal date by Demerged Company and Resulting Company. In case, the repayment of FITL would delay beyond terminal date by Demerged Company and Resulting Company, such delayed portion of FITL would carry simple interest @ 5% per annum after terminal date by the respective Company for its own outstanding of FITL.

(iii) The creditors for unsecured loans of Demerged Company and Resulting Company as shown in schedule V, shall waive / write off commitment charges, liquidated damages, penal interest, commission, fees, other charges and trusteeship fees etc. of whatsoever and howsoever nature till the Effective date to the respective company without any further act or deed.

[C] Re-organisation of Capital Structure:

In consideration of the provisions of this Scheme and as an integral part of this Scheme, the share capital of the Demerged Company and the Resulting Company shall be restructured and re-organised in the manner set out in Clauses mentioned below:

(a) Upon the Effective Date and in consideration of the Demerger, including the transfer and vesting of the Demerged Undertaking in the Resulting Company pursuant to this Scheme, the face value and paid-up value of shares of Demerged Company Shall stand reduced to Rs. 5/- per Equity Shares, without any further act or deed from the date of Record Date.

(b) Upon the Effective Date and in consideration of the Demerger, including the transfer and vesting of the Demerged Undertaking in the Resulting Company pursuant to this Scheme, the Resulting Company shall, without any further act or deed, issue and allot to each member of the Demerged Company whose name is recorded in the register of members of the Demerged Company on the Record Date, in the ratio of 1 (one ) equity shares in the Resulting Company of Rs. 5 /- each credited as fully paid-up for every 1 (one) equity shares of Rs.5/- each fully paid up held by such member in the Demerged Company, (the “Share Entitlement Ratio”).

(c) The shares issued to the members of the Demerged Company pursuant to Clause 19 above shall be issued in dematerialised form by the Resulting Company, unless otherwise notified in writing by the shareholders of the Demerged Company to the Resulting Company on or before such date as may be determined by the board of directors of the Resulting Company or a committee thereof. In the event that such notice has not been received by the Resulting Company in respect of any of the members of the Demerged Company, the shares shall be issued to such members in dematerialised form provided that the members of the Demerged Company shall be required to have an account with a depository participant and shall provide details thereof and such other confirmations as may be required. It is only thereupon that the Resulting Company shall issue and directly credit the dematerialised securities to the account of such member with the shares of the Resulting Company. In the event that the Resulting Company has received notice from any member that shares are to be issued in certificate form or if any member has not provided the requisite details relating to the account with a depository participant or other confirmations as may be required, then the Resulting Company shall issue shares in certificate form to such member.

(d) The shares allotted pursuant to the scheme shall remain frozen in the depositories system till listing / trading permission is given by the designated stock exchange.

(e) The aggregate value of existing paid up share capital of resulting Company before demerger would remain same however the number of such existing equity shares would be 100000 fully paid up equity shares of face value of Rs. 5 each instead of 50000 fully paid up equity shares of Rs. 10 each without any further act or deed from the date of Record Date.

(f) Equity shares to be issued by the Resulting Company pursuant to Clause 19 in respect of such of the equity shares of the Demerged Company which are held in abeyance shall also be kept in abeyance.

(g) In the event of there being any pending share transfers, whether lodged or outstanding, of any shareholder of the Demerged Company, the board of directors or any committee thereof of the Demerged Company shall be empowered in appropriate cases, prior to or even subsequent to the Record Date, to effectuate

43

such a transfer in the Demerged Company as if such changes in registered holder were operative as on the Record Date, in order to remove any difficulties arising to the transferor of the share in the Resulting Company and in relation to the shares issued by the Resulting Company after the effectiveness of this Scheme. The board of directors of the Demerged Company shall be empowered to remove such difficulties as may arise in the course of implementation of this Scheme and registration of new members in the Resulting Company on account of difficulties faced in the transaction period.

(h) The equity shares to be issued and allotted by the Resulting Company in terms of Clause 19 above shall rank pari passu in all respects with the existing equity shares of the Resulting Company.

(i) Equity shares of the Resulting Company issued in terms of Clause 19 above and equity shares of the Resulting Company that have been issued to the at the time of incorporation, shall be listed and/or admitted to trading on the relevant stock exchange/s in India, where the equity shares of the Demerged Company are listed and/or admitted to trading as on the Effective Date without any act, instrument or deed.

(j) Unless otherwise determined by the board of directors or any committee thereof of the Demerged Company and the board of directors or any committee thereof of the Resulting Company, issuance of shares in terms of Clause 19 of this Part shall be done within 40 days from the Effective Date.

(k) (a) As an integral part of the Scheme, and, upon the coming into effect of this Scheme, with effect from the Appointed Date, the issued, subscribed and paid-up capital of the Demerged Company shall be reorganised as follows:

(i) The subscribed and paid up capital of the Demerged Company as on appointed date shall be reduced by 50% i.e. Rs. 13,50,00,000/- (Rupees Thirteen Crores fifty lakh lakh Only) as being no longer represented by assets of the Demerged Company and such reduction shall be effected by reducing the face value of the equity shares of the Demerged Company from Rs.10/- per equity share to Re. 5/- per equity share as already stated above.

(ii) Thus, with the reduction of share capital of the Demerged Company in accordance with sub-clause (i) above, 27000000 existing equity shares of the reduced face value of Re. 5/- each as already stated above.

[D] Re-organisation of Management and Business Operation:

Since Effective Date, the Resulting Company would be managed by the promoters namely Chiripals and the demerged company shall be managed by the promoters namely Guptas however both the promoter groups will extend their cooperation and assistance to the respective management for successful implementation of the scheme.

“Promoters or Promoter Group” as defined in the scheme means the original promoters of the company comprises of Chiripals and Guptas. The ‘Chiripals’ means Chiripal Group/ family comprising of Mr. Ved Prakash Chiripal, Mr. Jyoti Prasad Chiripal , Mr. Jaiprakash Chiripal and Mr. Brijmohan Chiripal (which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include their respective heirs, executors and administrator) including their friends, relatives and body corporates in which Chiripal family is directly or indirectly interested. Similarly “Guptas” means Gupta Group / family comprising of Mr. Shyam Gupta, Mr. Prakash Gupta, Mr. Mohan Gupta and Mr. Sunil Gupta (which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include their respective heirs, executors and administrator) including their friends, relatives and body corporates in which Gupta family is directly or indirectly interested.;

Upon scheme being effective, Guptas shall exclusively manage the demerged company whereas Chiripals shall exclusively manage resulting Company.

Reorganisation of business operation, in the Form of cessation of members of the Board of directors representing promoter group Chiripal from Nova Petrochemicals Limited ( Name changed to GSL Nova Petrochemicals Limited) and similarly cessation of members of Board of Directors representing from the promoters group of Gupta from the Board of Directors of Resulting Company Nova Polyyarn Ltd ( Name changed to CIL Nova Petrochemicals Limited) as per the scheme approved. Shri Jyoti Prasad Chiripal and Shri Ved Prakash Chiripal have resigned from the Board of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) as Directors on 5th October 2009 and Shri Shyam Sunder Gupta and Shri Sunil Kumar Gupta have also resigned from the Board of

44

CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) on 5th October 2009. However all of them will continue to sign all such documents, deeds and such other related papers including operation of bank accounts wherever their name occur and / or exist or required to be included in future and shall continue to represent for all such related and consequential matters appertaining and / or related to the Scheme. Moreover all of them have consented to participate in decision making, to continue to act and represent and to extend full cooperation in all matter related to successful implementation and consequent conclusion of the Scheme in the interest of the Shareholders of the Companies. Mr. Jyoti Prasad Chiripal has resigned as Chairman of the GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and has become the Chairman of CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) on conclusion of Board Meeting held on 05th October 2009.

For the purpose of smooth management from effective date and upon transfer and vesting of the Demerged Undertaking in the Resulting Company pursuant to this Scheme, Chiripals and Guptas would inter-se transfer their part holding in demerged Company and Resulting Company respectively to the extent of less than 1/4th of the total capital of the Demerged Company and Resulting Company at mutually agreed terms and conditions. The terms and condition are being worked out for transfer of shares.

3. Issue of Shares Pursuant to the Scheme:

In terms of the sanctioned Scheme of Arrangement in the nature of Demerger of undertaking between the company Nova Petrochemicals Ltd and Nova Polyyarn Ltd, the share capital of both the companies has been reorganized by way of reduction of share of Rs.10/- each fully paid into share of Rs.5/- each fully paid in respect of Nova Petrochemicals Limited and subdivision of shares of existing share of Rs.10/- each fully paid up into share of Rs. 5/- each fully paid up in respect of Nova Polyyarn Limited. Accordingly, both the companies issued and allotted shares at the meeting of Board of Directors of the respective companies held on 26.10.2009 as under:

The Board of Directors of the Nova Petrochemicals Limited (New name GSL Nova Petrochemicals Limited) and Nova Polyyarn Limited (New name CIL Nova Petrochemicals Limited) at its respective meeting of Board of Directors held on 5th October 2009 had fixed Thursday, the 22nd day of October, 2009 as the record date. The intimation for record date was communicated to ASE, BSE and NSE and the same for Nova Petrochemicals Limited was displayed on the website of respective stock exchanges. The trading of the Nova Petrochemicals Limited has been suspended with effect from 21st October 2009.

Thus shares were allotted as under:1) One (1) Equity share of Rs. 5/- each of GSL Nova Petrochemicals Ltd (Formerly Nova Petrochemicals Limited) in lieu of existing share of Rs.10/- each to the shareholder of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited).

2) One (1) Equity share of CIL Nova Petrochemicals Limited ( Formerly Nova Polyyarn Ltd ) of the face value Rs. 5/- each for every one-equity share of Rs.10/- each held by them in GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited).

3) Two (2) Equity shares of CIL Nova Petrochemicals Limited ( Formerly Nova Polyyarn Ltd) of the face value Rs. 5/- each for every one-equity share of Rs.10/- each held by existing shareholder of CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited).

The Company has obtained new ISIN for its share of Rs. 5/- each from the Depositories. The shares of the Company has been electronically credited / dispatched as the case may be, on compliance of certain formalities in that regard.

The Shares allotted pursuant to Scheme shall remain frozen in the Depositories System till listing / trading permission is given by the designated stock exchanges.

The shares issued pursuant to Scheme to the members of Nova Petrochemicals and Nova Polyyarn Ltd will be listed on the Bombay Stock Exchange, Mumbai, the National Stock Exchange, Mumbai and Ahmedabad Stock Exchange, Ahmedabad. The necessary Formalities for listing of shares of the existing listed Company with new name GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and listing of shares under Rule 19 (2) of SC(R) Act, 1956 read with Rule 19(7) of SC(R) Rules, 1957 and SEBI Circular dated September 3 2009

45

for the Resultant Company with new name CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) have been initiated by respective companies.

4. The Effect of Scheme on shareholder / Investor:

Computation of Cost of Acquisition for the shares of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited).

On the basis of advise received,

This cost of acquisition is relevant only to the cases where the shares were acquired / bought before the record date i.e., 22nd October 2009 i.e. Prior to Demerger in the composite Nova Petrochemicals Ltd.

(1) The scheme of arrangement between Nova Petrochemicals Ltd. and Nova Polyyarn Ltd .has fulfilled the provisions of Sec 2(19AA) of the Income Tax Act, 1961 (herein after referred to as the Act) and hence is Demerger, according to the provisions of the Act.

(2) According to the provisions of Sec 47 (vid) of the Act, this transaction is not a transfer and hence is not taxable in the hands of the shareholders.

Cost of acquisition:

As per Sec 49(2C) of the Act, the cost of acquisition of shares in the resulting company CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) shall be the amount which bears to the cost of acquisition of shares held in the Demerged company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) the same proportion as the net book value of assets transferred in a Demerger bears to the net worth of the Demerged company (Nova Petrochemicals Ltd.) immediately before such Demerger.

Cost of acquisition of CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) share:

The net book value of assets of Demerged undertaking (assets as reduced by loans and current liability & provisions) being transferred to CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) as on 01/04/2007 was Rs.2017.83 Lakhs and the net worth of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) immediately before such Demerger was Rs.4035.67 Lakhs. Thus, the proportion of net asset value transferred to resulting company CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) to the net worth of the Demerged company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Ltd.) immediately before such Demerger will be 2017.83 / 4035.67 Lakhs, which is 50 %. Cost of acquisition of a CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) share will be 50% of the total cost of acquisition of the original share in Demerged company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) prior to such Demerger.

Cost of acquisition of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) share:

As per Sec 49(2D) of the Act, cost of acquisition of the original shares held by the shareholder in the Demerged Company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Ltd.) shall be deemed to have been reduced by the cost of acquisition of the shares in the resulting Company CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) , computed as per Sec 49(2C) of the Act.

• For e.g., If a composite Nova Petrochemicals share was acquired for Rs. 10/-, the cost of acquisition of a share in the resulting company CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited), based on the proportion of net assets / net worth (computed earlier) shall be Rs.5/-. Thus, the cost of acquisition of a share in the Demerged company GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) will be the cost of original share less cost of acquisition of a share in the resulting company CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) which is Rs 10/-less Rs 5/-, i.e. Rs.5/-

46

Period of holding:

According to Sec 2(42A) (g) of the Act, for reckoning the period of holding on the date of sale, the period for which the shares were held in the Demerged company (Nova Petrochemicals Ltd.) prior to Demerger should also be considered. For example, if a person acquires 200 shares of Nova Petrochemicals in June 2007, on and prior to the record date i.e. 22/10/2009. If the shares are sold in November 2009, the period of holding, for determining whether it is a short term capital asset or a long term capital asset, should be considered from the date of original purchase, i.e. June 2007 and not from the date of allotment on the record date i.e. 22/10/2009.

The company trusts this explain the position clearly and would help shareholder / investor to compute the cost of acquisition per share individually for GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) and CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited), both after the Demerger, if and when such shares are sold attracting capital gains under the Income Tax Act, 1961. Statement of tax benefit: The report of J.T. SHAH & COMPANY, Chartered Accountants, Ahmedabad dtd.04.12.2009 on Statement of tax benefit is reproduced.

47

To, The Board of Directors CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY) Chiripal House Shivranjani Cross Roads Satellite Ahmedabad - 380015 India

Sub: Statement of Tax Benefits

Dear Sirs,

We hereby certify that the enclosed annexure states the tax benefits available to CIL NOVA PETROCHEMICALS LIMITED (the “Company”) and to the Shareholders for the Company under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in future, The Company may or may not choose to fulfill.

The benefits discussed in enclosed annexure are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and changing tax laws, each investor is advised to consult his own tax consultant with respect to specific tax implications arising out of their investment in the shares of the company, particularly in view of the fact that there could be different interpretations of legislation.

Unless otherwise specified, sections referred to in the annexure are sections of Income Tax Act, 1961. All the provisions set out in the annexure are subject to conditions specified in the respective sections.

We do not express any opinion or provide any assurance as to whether :

The Company or its shareholders will continue to obtain these benefits in future; or

The conditions prescribed for availing the benefits have been or would be met with.

The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. While all reasonable care has been taken in preparation of this statement, We accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it.

FOR, J. T. SHAH & COMPANY CHARTERED ACCOUNTANTS

PLACE : AHMEDABAD (J. T. SHAH)

PARTNER DATED: 04/12/2009 [M.No.3983]

48

ANNEXURE TO THE CERTIFICATE DATED 26/11/2007

BENEFITS UNDER THE INCOME TAX ACT, 1961

GENERAL PROVISIONS :

A : TO THE COMPANY :

As per the provisions of Section 32 of the Act, the company is eligible to claim depreciation on tangible and specified intangible assets as explained in the said section and the relevant Income Tax rules there under.

In accordance with and subject to the conditions specified in Section 32(I)(iia) of the Act, the company is entitled to an additional depreciation allowance of 20% of the cost of new machines acquired and put to use during an year.

As per section 10(34) of the Act, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003 by domestic companies) received on the shares of any company is exempt from tax.

As per section 10(35) of the Act, the following income shall be exempt in the hands of the Company:

Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10; or

Income received in respect of units from the Administrator of the specified undertaking; or Income received in respect of units from the specified company

However, this exemption does not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case may be.

For this purpose (i) “Administrator” means the Administrator as referred to in section 2(a) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and (ii) “Specified Company” means a company as referred to in section 2(h) of the said Act.

As per section 10(38) of the Act, long term capital gains arising to the Company from the transfer of a long term capital asset being an equity share in a company or a unit of an equity oriented fund where such transaction is chargeable to securities transaction tax would not be liable to tax in the hands of the Company.

For this purpose, “Equity Oriented Fund” means a fund –

(i) Where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty five percent of the total proceeds of such funds; and

(ii) Which has been set up under a scheme of a Mutual Fund specified under section 10(23D) of the Act.

As per section 112 of the Act, taxable long-term capital gains, if any, on sale of listed securities or units or zero coupon bonds (in cases not covered under section 10(38) of the Act) would be charged to tax at the rate of 20% (plus applicable surcharge and education cess) after considering indexation benefits in accordance with and subject to the provisions of section 48 of the Act or at 10% (plus applicable surcharge and education cess) without indexation benefits, at the option of the Company. Under section 48 of the Act, the long term capital gains arising out of sale of capital assets excluding bonds and debentures (except Capital Indexed Bonds issued by the Government) will be computed after indexing the cost of acquisition/improvement.

As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax if the capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. However, if the assesses transfers or converts the long term specified asset into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

49

A “long term specified asset” means any bond, redeemable after three years and issued on or after the 1st day of April 2006:

(i) by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988, and notified by the Central Government in the Official Gazette for the purposes of this section; or

(ii) by the Rural Electrification Corporation Limited, a company Formed and registered under the Companies Act, 1956, and notified by the Central Government in the Official Gazette for the purposes of this section.

As per section 111A of the Act, short term capital gains arising to the Company from the sale of equity share or a unit of an equity oriented fund transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable surcharge and education Cess).

B : TO THE SHAREHOLDERS OF THE COMPANY :

I. RESIDENTS

As per section 10(34) of the Act, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the shares of the Company is exempt from tax in the hands of the shareholders.

Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/improvement and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long term capital gains, it offers a benefit by permitting substitution of cost of acquisition / improvement with the indexed cost of acquisition / improvement, which adjusts the cost of acquisition / improvement by a cost inflation index as prescribed from time to time.

As per section 10(38) of the Act, long-term capital gains arising to the shareholder from the transfer of a long-term capital asset being an equity share in the Company or a unit of a equity oriented fund, where such transaction is chargeable to securities transaction tax would not be liable to tax in the hands of the shareholder.

As per provisions of the Act, the securities transaction tax paidby the shareholder in respect of taxable securities transactions entered into in the course of the business would be eligible for deduction from the income chargeable under the head “Profits and Gains of Business or Profession” arising from taxable securities transactions.

Asper section 112 of the Act, if the shares of the Company are listed on a recognized stock exchange, taxable long term capital gains, if any, on sale of the shares of the Company (in cases not covered under section 10(38) of the Act) would be charged to tax at the rate of 20% (plus applicable surcharge and education Cess) after considering indexation benefits or at 10% (plus applicable surcharge and education Cess) without indexation benefits, whichever is less.

As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax if the capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. If only part of capital gain is so reinvested, the exemption shall be allowed proportionately. In such a case, the cost of such long term specified asset will not qualify for deduction under section 80C of the act. However, if the assesses transfers or converts the long term specified asset into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.


by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988, and notified by the Central Government in the Official Gazette for

50

the purposes of this section; or by the Rural Electrification Corporation Limited, a company Formed and registered under the Companies Act, 1956, and notified by the Central Government in the Official Gazette for the purposes of this section.

As persection 54F of the Act, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long-term capital asset (not being a residential house) are not chargable to tax if the entire net consideration received on such transfer is invested within the prescribed period in the residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

As per section 111A of the Act, short-term capital gains arising to the shareholder from the sale of equity shares of the Company or a unit of equity oriented fund transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax will be taxable at the rate of 15% (plus applicable surcharge and education Cess).

II. NON-RESIDENTS

As per section 10(34) of the Act, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the shares of the Company is exempt from tax.

As per section 10(38) of the Act, long-term capital gains arising to the shareholder from the transfer of a long-term capital asset being an equity share in the Company, where such transaction is chargeable to securities transaction tax would not be liable to tax in the hands of the shareholder.

As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term capital asset will be exempt from capital gains tax if the capital gains are invested in a “long term specified asset” within a period of 6 months after the date of such transfer. However, if the assessee-s transfers or converts the long term specified asset into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.


(i) by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988, and notified by the Central Government in the Official Gazette for the purposes of this section; or

(ii) by the Rural Electrification Corporation Limited, a company Formed and registered under the Companies Act, 1956, and notified by the Central Government in the Official Gazette for the purposes of this section.

As persection 54F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of long term capital assets, not being a residential house, will be exempt from capital gain tax subject to certain conditions, if the net consideration from such shares is used for purchase of a residential house property within a period of one year before or two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

Under section 115-C(e) of the Act, the Non-Resident Indian shareholder has an option to be governed by the provisions of Chapter XIIA of the Act viz. “Special Provisions Relating to Certain Incomes of Non-Residents” which are as follows:

(i) As per provisions of setion115D read with section 115E of the Act, where shares in the Company are acquired or subscribed to in convertible foreign exchange by a Non-Resident Indian, capital gains arising to the non-resident on transfer of shares held for a period exceeding 12 months,

51

shall (in cases not covered under section 10(38) of the Act) be concessionally taxed at the flat rate of 10% (plus applicable surcharge and education Cess) (without indexation benefit but with protection against foreign exchange fluctuation).

(ii) As per section 115F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to a Non-Resident Indian from the transfer of shares of the company subscribed to in convertible foreign exchange shall be exempt from income tax, if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition.

(ii) As per section 115G of the Act, Non-Resident Indians are not obliged to file a return of income under section 139(1) of the Act, if their only source of income is income from specified investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

(iv) As per section 115H of the Act, where the Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income, for the assessment year in which he is first assessable as a Resident, under section 139 of the Act to the effect that the provisions of the Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

(iv) As per section 115-I of the Act, a Non-Resident Indian may elect not to be governed by the provision of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance the other provisions of the Act.

The tax rates and consequent taxation mentioned above shall be further subject to any benefits available under the Tax Treaty, if any, between India and the country in which the non-resident has fiscal domicile. As per the provisions of section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the non-resident.

III. FOREIGN INSTITUTIONAL INVESTORS

Income by way of dividend received on shares of the company is exempt under section 10(34) of the IT Act.

The long-term capital gains accruing to the members of the company on sale of the company’s shares in a transaction entered into in a recognized stock exchange in India and the transaction is chargeable to Securities Transaction Tax, would be exempt from tax as per the provisions of section 10(38).

As per provisions of the Act, the securities transaction tax paid by the shareholder in respect of taxable securities transactions entered into in the course of the business would be eligible for deduction from the income chargeable under the head “Profits and Gains of Business or Profession” arising from taxable securities transactions.

The short-term capital gains accruing to the members of the company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transaction Tax would be chargeable to tax @ 10% (plus applicable surcharge and education Cess) as per the provisions of section 111A.

Under section 115AD (1)(b)(ii), income by way of Short Term capital Gain arising from the transfer of shares (otherwise than as mentioned in 4 above) held in the company for a period of less than 12 months will be taxable @ 30% (plus applicable surcharge and education Cess).

Under section 115AD (1)(b)(iii) income by way of Long Term Capital Gain arising from the transfer of shares (otherwise than as mentioned in 2 above) held in the company will be taxable @ 10% ((plus applicable surcharge and education Cess). It is to be noted here that the benefits of indexation and

52

foreign currency fluctuation protection as provided by section 48 of the Act are not available to Foreign Institutional Investors.

Long Term Capital Gains on sale of shares of the company by the members shall be exempt from income tax if such gains are invested in bonds/equity shares specified in section 54EC respectively subject to the fulfillment of the conditions specified in those sections.

Under the provisions of section 90(2), if the provisions of the Double Taxation A voidance agreement [DTAA] between India and the country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be applicable.

IV. MUTUAL FUNDS

As per the provisions of section 10(23D), any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank of India would be exempt from income tax.

V. BENEFITS TO THE VENTURE CAPITAL COMPANIES/FUNDS

As per the provisions of section 10(23FB), any income of Venture Capital Company/Fund registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, would be exempt from Income Tax, subject to conditions specified.

BENEFITS UNDER THE WEALTH TAX ACT, 1957,

‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957 does not include shares in Companies and hence, shares are not liable to wealth tax.

Notes :

The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequence of the purchase, ownership and disposal of equity shares :

The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the Company and to the shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws :

This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for a professional tax device. In view of the individual nature of tax consequences, the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their investment in the shares of the company:

In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and

The stated benefits will be available only to the sole/first named holder in case the shares are held by joint shareholders.


PLACE : AHMEDABAD DATED: 04/12/09 (J. T. SHAH)

PARTNER [M.No.3983]

53

SECTION IX

FINANCIAL STATEMENT OF LAST THREE YEARS

CIL Nova Petrochemicals Limited (Formerly know an Nova Polyyarn Limited) Audited Balance Sheet as at 31st March, 2008

Particulars Sch No. Rs.

As at 31.03.2008

Rs.

As at 31.03.2007

Rs. SOURCES OF FUNDS

1 Shareholders' Funds : (a) Share Capital 1 135500000 500000 (b) Share Application Money 414000 414000 (c) Reserves and Surplus 2 Nil Nil

135914000 914000 2 Loan Funds :

(a) Secured Loans 3 610399965 Nil (b) Unsecured Loans 4 351956054 Nil

962356020 Nil 3 Deferred Tax Liability (Net) Nil Nil

Total..... 1098270020 914000 APPLICATION OF FUNDS :

1 Fixed Assets : 5 (a) Gross Block 2013818061 Nil (b) Less : Depreciation 1140385606 Nil

Net Block 873432455 Nil Add: Capital Work in Progress 10077253 Nil

2 Investments : 6 2221 Nil 3 Current Assets, Loans and Advances

(a) Inventories 7 137062435 Nil (b) Sundry Debtors 8 399992623 Nil (c) Cash and Bank Balances 9 21327215 25460 (d) Loans and Advances 10 174413700 Nil

732795972 25460 4 Less :Current Liabilities and Provisions

(a) Current Liabilities 11 608811078 242500 (b) Provisions 12 5981574 Nil

614792652 242501 Net Current Assets 118003320 (217041)

3 Miscellaneous Expenditure 13 96754770 1131040 (To the Extent not w/off or adjusted)

Total..... 1098270020 914000 Notes on Accounts 20

As per our report of even date attached herewith FOR, CIL NOVA PETROCHEMICALS LTD. FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS

Chairman Director (J.T.SHAH) PARTNER PLACE : AHMEDABAD DATE : 15/10/2009

54

Profit and Loss Account for the year ended 31st March, 2008

Particulars Sche No. Rs.

For the year

ended 31.03.2008

Rs.

For the year

ended 31.03.2007

Rs. INCOME

1 Sales and Job Charges (Gross) 1886190568 Nil Less : Excise Duty 112454349 Nil Sales (Net) 1773736219 Nil

2 Other Income 14 5998055 Nil 3 Increase/(Decrease) in stock 15 30634461 Nil

Total..... 1810368736 Nil

EXPENDITURE 1 Materials 16 1274272559 Nil 2 Payments to and Provisions

for Employees 17 24334496 Nil 3 Operational and Other Expenses 18 467596036 Nil

1766203091 Nil Profit before Interest, Depreciation and Taxation 44165645 Nil

Less : Interest and Financial Charges 19 93711406 Nil

Profit before Depreciation and Taxation (49545762) Nil

Less : Depreciation 5 111683332 Nil Less : Prior Period Adjustment 656946 Nil

Profit / (Loss) before Taxation (161886039) Nil Less : Provision for Taxation

- Current including Wealth Tax 250000 Nil - Fringe Benefit Tax 250000 Nil

- Deferred Nil Nil Profit / (Loss) after Taxation (162386039) Nil

Notes on Accounts 20

Basic and Diluted earning per share (5.99) 0.00 As per our report of even date attached herewith FOR, CIL NOVA PETROCHEMICALS LTD.

FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS

Chairman Director (J.T.SHAH) PARTNER PLACE : AHMEDABAD DATE : 15/10/2009

55

SCHEDULES "1 TO 20" FORMING THE PART OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31.03.2008

Particulars Rs. As at

31.03.2008 Rs.

As at 31.03.2007

Rs. SCHEDULE - 1

SHARE CAPITAL 1 Authorised Capital

1,50,00,000 Equity Shares (Previous Year Nil) of Rs. 10/- each. 150000000 150000000

150000000 150000000 2 Issued, Subscribed and Paid-up Capital

50,000 (Pr. Year 50,000) Equity shares of Rs. 10 each fully paid up 500000 500000

500000 500000

3 Share Capital Suspense

Pursuant to the scheme of demerger

50000 Equity Shares of Rs.10/- each fully paid up to be cancelled after Balancesheet Date (500000) Nil

27000000 Equity Shares of Rs.5/- each fully paid up to be issued after Balancesheet Date 135000000 Nil

100000 Equity Shares of Rs.5/- each fully paid up to be issued after Balancesheet Date 500000 Nil

Total..... 135500000 500000 SCHEDULE - 2 RESERVES AND SURPLUS

1 Share Premium Balance as per last year Nil Nil Add:Amount transferred upon Demerger 118970013 Nil

118970013 Nil 2 General Reserve

Balance as per last year Nil Add:Amount transferred upon Demerger 22500000 Nil Add : Additions during the year Nil Nil

22500000 Nil 3 Profit and Loss Account

Balance as per last year Nil Add:Amount transferred upon Demerger (74686732) Add : Additions during the year (162386039) (237072771) Nil

(95602758) Nil Add : Transferred to Miscellaneous Expenditure 95602758 Nil

Total..... Nil Nil

56

SCHEDULE - 3

SECURED LOANS 1 Term Loans from Banks 426956979 Nil 2 Working Capital Loans from Banks 183184112 Nil 2 Other Loan 258875 Nil

Total..... 610399965 Nil

1 Term Loans are secured by mortgage of all Immovable and Movable properties, both present and future; subject to prior charge in favour of bankers on specified Movable Assets for Working Capital loans and further secured by personal guarantee of

2 Working Capital loans are secured by first charge on Book Debts and Stocks, and further secured by personal guarantee of the Promoter Directors.

SCHEDULE - 4

UNSECURED LOANS 1 From Banks 29875719 Nil 2 Security Deposits 11159483 Nil 3 From Corporate Bodies 303616851 Nil 4 From others 7304000 Nil

Total.... 351956054 Nil SCHEDULE - 6

INVESTMENTS

LONG TERM INVESTMENTS (NON TRADE)

INVESTMENT IN SHARES (QUOTED)

1 1 (Previous Year 1) Equity Shares of Reliance Natural Resources Ltd., of Rs. 5/- each fully paid-up 3

Nil

2 50 (Previous Year 50) Equity Shares of Century Enka Ltd., of Rs. 10/- each fully paid-up 1890

Nil

3 50 (Previous Year 50) Equity Shares of Garden Silk Mills Ltd., of Rs. 10/- each fully paid-up 328

Nil

2221 Nil

Total... 2221 Nil Aggregate value of Quoted Investments 2221 Nil Market value of Quoted Investments 8120 Nil

Note:Investment in Reliance Natural Resources Ltd,Century Enka Ltd and Garden Silk Mills Ltd transferred to demerged undertaking as per the scheme of arrangement of demerger approved by the Hon'ble High Court of Gujarat.

SCHEDULE - 7 INVENTORIES

1 Raw Materials 15078869 Nil 2 Stores, Spares and Fuel 33241139 Nil 3 Packing Materials 498553 Nil 4 Work-In-Process 69703648 Nil 5 Finished Goods 17881543 Nil 6 Goods-in-Transit 658683 Nil

Total... 137062435 Nil

57

SCHEDULE - 8

SUNDRY DEBTORS (Unsecured except reported at Note no 27 of Schedule 19)

Considered Good 1 Outstanding for a Period exceeding 6 Months 59960527 Nil 2 Others 340032095 Nil

399992623 Nil Considered Doubtful

1 Outstanding for a Period exceeding 6 Months 7089158 Nil 2 Others Nil Nil

7089158 Nil 407081781 Nil

Less: Provision for Doubtful Debtors 7089158 Nil

Total.... 399992623 Nil

SCHEDULE - 9

CASH AND BANK BALANCES

1 Cash on hand 112625 25460 2 Balance With Scheduled Banks

- In Current Account 9326546 Nil - In Fixed Deposit 11885908 Nil

21212454 Nil 3 Balance with Non Scheduled Bank in Current Accounts 2136 Nil

Total.... 21327215 25460 SCHEDULE - 10

LOANS AND ADVANCES (Unsecured)

1 Advances Recoverable in Cash or Kind Considered Good 133397437 Nil Considered Doubtful 5519827 Nil

138917264 Nil Less: Provisiond for Doubtful Advances 5519827 Nil

133397437 Nil 2 Deposits 23806537 Nil 3 Advance to Staff Nil Nil 4 Balance with Excise authority (Payable on Demand) Nil Nil 5 Advance Tax and TDS 17209726 Nil

Total..... 174413700 Nil SCHEDULE - 11

CURRENT LIABILITIES 1 Sundry Creditors 590812829 242500 2 Book Overdraft 1759505 Nil 3 Advance from Customers / Employees 15340877 Nil 4 Unclaimed dividend 897867 Nil

Total.... 608811078 242500

58

SCHEDULE - 12 PROVISIONS

1 Provision for Taxation 5981574 Nil 2 Provision for Dividend Nil Nil 3 Provision for Tax on Proposed Dividend Nil Nil

Total.... 5981574 Nil SCHEDULE - 13 MISCELLANEOUS EXPENDITURE Preliminary & Pre Operative Expense

Balance as per last year 1131040 1131040 Add : Additions During The Year 20972 Nil

1152012 1131040 Profit & Loss Account

Net Deficit after adjustment of Reserves & Surplus (Refer Schedule 2)95602758 Nil

Total.... 96754770 1131040 SCHEDULE - 14 OTHER INCOME

1 Interest (TDS Rs. 245139/- Previous year Rs. Nil) 3886479 Nil

2 Miscellaneous Balances Written off 1431760 Nil 3 Commission Nil Nil 4 Miscellaneous Income 677616 Nil 5 Profit on Sale of Investments Nil Nil 6 Profit on Sale of Fix Asset Nil Nil 7 Dividend 2200 Nil

Total.. 5998055 Nil SCHEDULE - 15 INCREASE / (DECREASE) IN STOCK

Closing Stock : 1. Finished Goods 17881543 Nil 2. Work-In-Process 69703648 Nil

87585191 Nil Less : Opening Stock

1. Finished Goods Nil 2. Work-In-Process Nil Add: Opening Stock received upon Demerger 1. Finished Goods 14187515 Nil 2. Work-In-Process 42763215 Nil

56950730 Nil Total.. 30634461 Nil

SCHEDULE - 16 MATERIALS Raw Materials Consumed 1021478592 Nil Purchase of Finished Goods 252793967 Nil

Total.. 1274272559 Nil

59

SCHEDULE - 17 PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

1 Salary and Wages 22126205 Nil 2 Contribution to P.F. and other funds 1296908 Nil 3 Staff and Labour Welfare 911383 Nil

Total.. 24334496 Nil SCHEDULE - 18 OPERATIONAL, ADMINISTRATIVE AND SELLING EXPENSES

1 Stores and Spares Consumed 36266466 Nil 2 Power and Fuel Consumed 189088580 Nil 3 Packing Material Consumed 74588666 Nil 4 Freight,Cartage and Octroi 24418496 Nil 5 Insurance 4832111 Nil 6 Rent,Rates and Taxes 484595 Nil 7 Vat Expense 81296663 Nil 8 Excise Duty Expenses 38796 Nil 9 Service Tax 2690776 Nil

10 Postage and Telephone Expenses 455068 Nil 11 Stationery, Printing and Advertisement 633804 Nil 12 Selling and Distribution Expenses 30463535 Nil 13 Travelling, Conveyance and Vehicle Expenses 2999211 Nil 14 Repairs and Maintenance :

(a) Plant 2928077 Nil (b) Building Nil Nil (c) Others 773026 Nil

3701103 Nil 15 Legal and Professional Exps. 2711079 Nil 16 Exchange Rate Difference 2165622 Nil 17 Auditor's remuneration :

(a) Audit fees 150000 Nil (b) Tax Audit fees 25000 Nil (c) Taxation and Others 25000 Nil (d) Certification 8774 Nil

208774 Nil 18 Miscellaneous Expenses 1986531 Nil 19 Provision for Doubtful Debtors and Advances (Net) 8566159 Nil 20 Bad Debts Nil Nil

Less: Provision available Nil Nil Nil Nil

Total ... 467596036 Nil SCHEDULE - 19

INTEREST AND FINANCE CHARGES

1 Interest on Term Loans 43888932 Nil 2 Interest on Working Capital Loans 20954975 Nil 3 Bank and Other Charges 20166241 Nil 4 Interest to Others 8701258 Nil 5 Hire Purchase Charges Nil Nil

Total ... 93711406 Nil

60

SCHEDULE - 20

NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2008

1. SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Accounting The accounts are prepared on historical cost convention on an accrual basis and materially complies with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

b. Fixed Assets Fixed Assets are stated at cost, net of Cenvat, less accumulated depreciation. All costs, including financial costs till commencement of commercial production.

c. Depreciation Depreciation on Fixed Assets other than Plant and Machinery has been provided on "Straight Line Method" at the rates provided in Schedule XIV to the Companies Act, 1956. Depreciation on Plant and Machinery has been provided on "Written down Value Method" at the rates provided in Schedule XIV to the Companies Act, 1956.

d. Inventories Inventories at year-end are valued at the lower of cost and net realizable value. The basis of determining

the cost for various categories of inventories is as follows: (i) In case of Raw Materials, Stores, Spares, Fuel and Packing Materials on FIFO basis. (ii) In case of Finished Goods and Work-In-Progress on FIFO basis.

e. Foreign Currency Transactions

Transactions denominated in Foreign Currency are normally recorded at the exchange rate prevailing at the time of transaction. Monetary items denominated in foreign currencies at the year are translated at the rate prevailing on the date of Balance Sheet. Exchange differences are dealt with in the Profit & Loss account.

f. Sales Sales are accounted for on dispatch of goods to the customers and is inclusive of Excise Duty and Sales Tax but net of sales returns and trade discounts

g. Investments Long Term Investments are stated at its cost.

h. Borrowing Cost Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs are charged to revenue.

i. Taxation i) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as

per the applicable provisions of the Income Tax Act, 1961.

ii) Deferred Tax resulting from timing differences between book and tax profit is accounted for under the liability method, at the current rates of tax, to the extent that the timing differences are expected to crystallize.

j. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

61

k. Employee Benefits (i) The employee and Company make monthly fixed Contribution to Government of India Employee’s

Provident fund equal to a specified percentage of the covered employee’s salary, Provision for the same is made in the year in which service are rendered by the employees.

(ii) The Liability for Gratuity to employee, which is a defined benefit plan is determined on the basis of

actuarial Valuation based on Projected Unit Credit method. Actuarial gain/Loss in respect of the same is charged to the profit and loss account.

(iii) Leave encashment benefit to eligible employee has been ascertained on actuarial basis and provided

for. Actuarial gain/loss in respect of the same is charged to the profit and loss account.

2. In terms of the scheme of arrangement under section 391 to 394 of the Companies Act,1956(“the Scheme”)between Nova Petrochemical Ltd and Nova Polyyarn Limited, Nova Petrochemical Limited has re-organised and segregated by way of a demerger,its business inrespect of undertaking Unit II situated at Survey Number 391,395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad engaged in yarn production & its allied activities to separate transferee company. All the assets and liabilities are transferred pursuant to approved order of the Hon’ble High Court of Gujarat dated 27th August,2009 and the appointed date as per the scheme is 1st April,2007.

As per the said scheme:

In consideration of the demerger, the company issued and allotted 2,70,00,000 equity shares amounting to Rs.13,50,00,000/- 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 on equity share of Rs.10 each fully paid up held by the shareholders of Nova Petrochemicals Ltd.

3. Pursuant to the Company’s Scheme of Arrangement (Scheme) to demerge Unit-II situated at Survey Number 391,395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad, previous year figures are not comparable.

4. CONTINGENT LIABILITIES:

2007-2008 Rs. (in Lacs)

2006-2007 Rs. (in Lacs)

a) Letters of Credit Outstanding 1798.37 Nil b) Income Tax demands disputed in appeal by the

Company/ Income Tax Authorities (Against which the Company has paid amount of Rs. 34.20 Lacs)

245.80 Nil

c) Disputed demand of Sales Tax Nil Nil d) Disputed demand of Custom Duty

(Against which the Company has paid amount of Rs. 17.08 Lacs)

10.00 Nil

e) Excise Duty demands disputed in appeal by the Company/ Excise Authorities 866.27 Nil

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

13.47 Nil

g) Claims not acknowledged as debts by the company

54.39 Nil

h) Show Cause Notices received from various authorities (Against which the Company has paid amount of Rs. 400.00 Lacs)

974.13 Nil

i) Employees Demands pending before Labour Courts

Amount not ascertainable

Nil

62

5. 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, 2008 is Rs. 1483.76 Lacs (Previous Year Rs. Nil).

6. VAT expenses under the head “Operational administrative and selling expenses” includes Rs. 263.28 Lacs paid under ‘Samadhan Yojna, 2007’ of the Sales Tax Department of Govt. of Gujarat to relinquish the Contingent Liability of Sales Tax as on 31/03/07 amounting to Rs. 1614.09 Lacs.

7. The consortium of Banks have restructured their dues outstanding as on 31/03/07 as approved by CDR under CDR mechanism and funded interest of Rs. 275.56 Lacs being 50 % of interest payable on Term Loans and Working Capital Term Loans from 01/04/07 to 31/03/08.

8. Debtors includes Rs. 1.48 lacs (Previous Year Rs. Nil) due from private companies in which some of the directors are interested as directors and Rs. 1.40 Lacs (Previous Year Rs. Nil) due from firms in which some of the directors are interested as partners.

9. Loans and Advances includes Rs. 982.01 Lacs (Previous Year Rs. Nil) due from private companies in which some of the directors are interested as directors and Rs. 103.12 Lacs (Previous Year Rs. Nil) due from firms in which some of the directors are interested as partners.

10. Secured and Unsecured loans where repayments are stipulated include Rs.199.24 Lacs (Previous year Rs. Nil) repayable within a period of one year.

11. Traveling, Conveyance & Vehicle Expenses include Directors Travelling Rs. 1.81 Lacs (Previous Year Rs. Nil).

12. Maximum debit balance in Shri Vinayak Sahakari Bank Ltd during the year is Rs. 0.04 Lacs (Previous year Rs. Nil)

13. Prior Period Expenses includes 31-03-2008 31-03-2007

(i) Raw Material Consumption (4,01,885) Nil (ii) Payment to Employees (27,697) Nil (iii) Freight & Cartage 3,47,521 Nil (iv) Rent Rates and Taxes (41,473) Nil (v) Repairs & Maintenance Expense 5,67,473 Nil (vi) Miscellaneous Expenses 1,53,400 Nil (vii) Interest Short recognized 59,607 Nil (viii) Depreciation Excess Provided Reversed Nil Nil

Total . . . 6,56,946 Nil

63

14. Disclosure of As-15 of Gratuity and Leave Encashment is as Under:

Sr. No. Particulars

Gratuity (Funded)

Defined benefit Obligation 31/03/08

Leave Encashment (Unfunded)

Defined benefit obligation 31/03/08

(i) Employee Benefit Obligations The amounts (in Rs.) recognised in the balance sheet.

Present value of funded obligations 1,162,086 - Fair value of plan assets 1,162,086 - Present value of unfunded obligations 1,759,422 882,672 Unrecognised past service cost - - Net liability 1,759,422 882,672 Amounts in the balance sheet: - Liabilities 1,759,422 882,672 - Assets - - Net liability 1,759,422 882,672 (ii) The amounts (in Rs.) recognised in the statement of

profit and loss. Current service cost 480,174 169,412 Interest on obligation 343,327 74,671 Expected return on plan assets (131,667) - Net actuarial losses (gains) recognised in year (1,207,703) (151,482) Past service cost Losses (gains) on curtailments and settlement - - Total, included in 'employee benefit expense' (515,869) 92,601 Actual return on plan assets 141,175 (iii Changes in the present value of the defined benefit

obligation representing reconciliation of opening and closing balances thereof.

Opening defined benefit obligation 4,039,137 878,483 Service cost 480,174 169,412 Interest cost 343,327 74,671 Actuarial losses (gains) (1,198,195) (151,482) Losses (gains) on curtailments - - Liabilities extinguished on settlement - - Liabilities assumed in an - - amalgamation in the nature of purchase - - Exchange differences on foreign plans - - Benefits paid (742,935) (88,412) Closing defined benefit obligation 2,921,508 882,672 (iv Changes in the fair value of plan assets representing

reconciliation of the opening and closing balances thereof.

Opening fair value of plan assets 1,763,846 - Expected return 131,667 - Actuarial gains and (losses) 9,508 -

64

Assets distributed on settlements - - Contributions by employer - - Assets acquired in an amalgamation - - In the nature of purchase - - Exchange differences on foreign plans - - Benefits paid (742,935) - closing balance of fair value of plan assets 1,162,086 - (v) The major categories of plan assets as a percentage of

total plan assets. Government of India Securities 0.00% 0.00% High quality corporate bonds 0.00% 0.00% Equity shares of listed companies 0.00% 0.00% Property 0.00% 0.00% Insurance Company 100.00% 0.00% (vi Principal actuarial assumptions at the balance sheet

date (expressed as weighted averages) : Discount rate 8.50% 8.50% Expected return on plan assets 9.00% 0.00% Proportion of employees opting for early retirement - - Annual increase in Salary costs 6.00% 6.00% Future changes in maximum state health care benefits - - Employment Market. (vi Amount for the current period.

Defined benefit obligation 2,921,508 882,672 Plan assets 1,162,086 - Surplus/(deficit) (1,759,422) (882,672) Experience adjustments on plan Liabilities - - Experience adjustments on plan assets - - (vi Movement in net liability recognised in Balance Sheet.

Net opening liability 2,275,291 878,486 P&L Charge (515,869) 92,601 Contribution paid - (88,412) closing net liability 1,759,422 882,672 (ix Transitional Liability

D.B.O. As on 1-4-2007 4,039,137 878,483 Market value of Investment as on 1-4-2007 (1,763,846) - Provision in books of Accounts maintained under the

Accounting Standard. (2,218,969) (1,484,175) transitional liability (assets) as on 1-4-2007 56,322 (605,692) Note Transitional liability (assets) as on 1-4-2007 Is worked out

on the basis of discount rate 8.50 8.50 15. 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 it’s business segment as primary segment. “Others” represents Income from Commission. There is no reportable secondary segment as none of the conditions as laid down for determining the geographical segments are satisfied.

65

Primary Segment Information of Petrochemicals for the year ended 31st March, 2008

(Rs. in Lacs)

Particulars Petrochemicals Yarns Cloth Others Total

31-03-08 31-03-07 31-03-08 31-03-07 31-03-08 31-03-07 31-03-08 31-03-07

Revenues 15013.66 Nil 2744.80 Nil NIL 2.96 17758.46 Nil

Unallocable Revenue

Nil Nil

Total Revenue

17758.46 Nil

Segment Result (1119.36) Nil 387.20 Nil Nil 2.96 (732.15) Nil

Interest and Finance Charges

937.11 Nil

Interest Income 38.86 Nil Income from Investments

0.02 Nil

Total Profit Before Tax

(1623.81) Nil

Taxes 5.00 Nil

Prior Period Item 6.57 Nil

Net income after taxes

(1635.38) Nil

Assets 13856.15 Nil 3346.19 Nil Nil 10.93 17202.34 Nil

Unallocable Assets

385.39 Nil

Total Assets 17587.73 Nil

Liabilities 13089.38 Nil 3061.61 Nil Nil Nil 16151.08 Nil

Unallocable Corporate Liabilities

77.41 Nil

Total Liabilities 16228.59 Nil

Capital Expenditure

378.01 Nil Nil Nil Nil Nil 378.01 Nil

Depreciation 1116.83 Nil Nil Nil Nil Nil 1116.83 Nil

Non-cash expenses

85.66 Nil Nil Nil Nil Nil 85.66 Nil

66

16. Earning Per Share

Particulars 31-03-2008 31-03-2007

Numerator used for calculating Basic and Diluted Earning Per Share (Profit After Tax)

(162386039) Nil

Nominal Value per Share 5 Nil

Weighted Average No. of Shares used as denominator for calculating Basic and Diluted Earning Per Share

27100000 Nil

Basic and Diluted earning per share (5.99) Nil

17. Related Party Disclosures

a) Key Management Personnel

Sr. No. Name Designation 1 Shri Jyotiprasad Chiripal Chairman

2 Shri Vedprakash Chiripal Director

3 Shri Sunilkumar Gupta Director

4 Shri Shaym Gupta Director

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

Sr. No. Name 1 Chiripal Industries Ltd. 2 Deepak Enterprise 3 Evergreen Synthetics Pvt. Ltd. 4 Gupta Dying and Printing Mills 5 Gupta Dying and Printing Mills Pvt. Ltd. 6 Gupta Synthetics Limited 7 Gupta Silk Mills Pvt. Ltd. 8 Nandan Exim Ltd. 9 Shanti Exports Pvt. Ltd. 10 Vishal Poly Yarn Pvt. Ltd 11 Sunil Textiles 12 Vishal Fabrics Pvt. Ltd. 13 Shanti Industries 14 ShubhLaxmi Dying and Print Mills P. Ltd 15 Aviva Industries Ltd 16 Poly Coat India Pvt Ltd. 17 Nova Poly Yarn Ltd. 18 NPL Power Pvt. Ltd.

67

c) Details of Transactions with Key Management Personnel and Related Parties of the Key Management

Personnel are as follows: (Rs. in Lacs)

Sr. No. Nature of Transaction

Key Management

Personnel

Other Related Parties

Relatives of Key Management

Personnel Total

1 Unsecured Loans Taken during the year NIL 1884.58 NIL 1884.58

(NIL) (NIL) (NIL) (NIL) Balance as at Balance Sheet Date NIL 3109.21 NIL 3109.21

(NIL) (NIL) (NIL) (NIL) 2 Advances Recoverable in Cash or

Kind

Given during the year NIL 90.57 NIL 90.57 (NIL) (NIL) (NIL) (NIL)

Balance as at Balance Sheet Date NIL 1356.28 NIL 1356.28 (NIL) (NIL) (NIL) (NIL)

3 Advances Received from Customers Received during the year NIL 6.70 NIL 6.70 (NIL) (NIL) (NIL) (NIL) Balance as at Balance Sheet Date NIL 10.27 NIL 10.27 (NIL) (NIL) (NIL) (NIL)4 Expenditure Payment to and provision for

employees NIL NIL NIL NIL

(NIL) (NIL) (NIL) (NIL) Agency Commission Paid NIL 3.94 NIL 3.94

(NIL) (NIL) (NIL) (NIL) Purchase of Goods, Packing Material

and Stores NIL 1102.27 NIL 1102.27

(NIL) (NIL) (NIL) (NIL) Jobwork Charges NIL 600.07 NIL 600.07 (NIL) (NIL) (NIL) (NIL) Interest Paid NIL NIL NIL NIL

(NIL) (NIL) (NIL) (NIL) 5 Income Received Power & Fuel Expense NIL 1139.07 NIL 1139.07 (NIL) (NIL) (NIL) (NIL) Interest Received NIL NIL NIL NIL

(NIL) (NIL) (NIL) (NIL) Jobwork Income NIL 398.08 NIL 398.08

(NIL) (NIL) (NIL) (NIL) 6 Stock in trade Sold / Redeemed during the year NIL 1128.79 NIL 1128.79

(NIL) (NIL) (NIL) (NIL) Balance as at Balance Sheet Date NIL 42.56 NIL 42.56

(NIL) (NIL) (NIL) (NIL) 7 Other Transactions Payment received on behalf of others NIL 91.50 NIL 91.50

(NIL) (NIL) (NIL) (NIL) Payment made on their behalf NIL 9.66 NIL 9.66

(NIL) (NIL) (NIL) (NIL)

68

Note: List of transaction, out of the transactions reported in the above table, where the transactions entered in to with single party exceed the 10% of the total related Party transactions of similar nature are as under : 1. Unsecured Loan Rs. In Lacs

Taken :- --------------- - Chiripal Industies Ltd. 1331.28 - Shanti Processors Ltd. 392.50

2. Advance Recoverable in cash or Kind Advance Give :-

- Nandan Exim Ltd. 90.30 3. Advances Received from Customers :- - Shanti Exports Ltd. 6.69 4. Expenditure :-

Agency Commission Paid: - Shanti Exports Ltd. 3.95

Purchase of Goods, Packing Material and Stores :- - Chiripal Industies Ltd- 1102.27

Jobwork Expense: - GSL-Nova Petrochemicals Ltd. 600.07

5. Income Received :- Power & Fuel Income:

- GSL-Nova Petrochemicals Ltd. 1139.07 Jobwork Income:

- Chiripal Industries Ltd. 398.08 6. Stock in trade :-

Sold / Redeemed during the year - Chiripal Industries Ltd. 414.37 - Shanti Exports Ltd 714.42 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 Accountants of India.

18. The amount of Exchange Difference

Debited to Profit and Loss Account Rs. 21.66 Lacs (Previous Year Debited to Profit & Loss Account Rs. Nil)

19. 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 47.33 Lacs (Previous year Rs. Nil) due to Small Scale and ancillary concerns.

b) The undertakings to whom amounts outstanding for more than 30 days as on 31st March, 2008, in respect of Small Scale and ancillary concerns where such dues exceed Rs. One Lac are as under: Akar Packers Pvt. Ltd., Akshat Trader, Anushree Paper Packs Pvt. Ltd., Fortune Fabrics Pvt Ltd.

20. Balance in Current Account with Scheduled Banks includes Rs. 5.62 Lacs (Previous Year Rs. Nil) in the unpaid

dividend account with various banks. 21. Sundry Debtors are Secured to the extent of Rs. 7.50 Lacs (Previous Year Rs. Nil) 22. Information pursuant to provision of paragraphs 3 and 4 of part II of Schedule VI Companies Act, 1956. (As

certified by Directors):

69

a) Licensed & Installed Capacity : Sr. No. Product Name Licensed Capacity Installed Capacity

1 Partially Oriented Polyester Filament Yarn (POY)

License is not required 15085 Tons p.a.* (Nil)

2 Polyester Texturised Yarn License is not required 3011 Tons p.a.* (Nil)

3 Draw Twisted Yarn License is not required 3282 Tons p.a.* (Nil)

4 Fully Draw Yarn License is not required 11532 Tons p.a.* (Nil)

* The revised installed capacity has been stated on the basis of TEV study of MottMcDonald.

b) Opening Stock & Closing Stock of Finished Goods

Sr. No. Product Unit

Opening Stock Closing Stock

Quantity Amount

Rs. Quantity Amount Rs.


Kg.

67388 32,99,605 61368 27,13,743 (Nil) (Nil) (Nil) (Nil)

2 Polyester Texturised Yarn Kg. 12076 8,82,737 35150 27,41,784

(Nil) (Nil) (Nil) (Nil) 3 Draw Twisted

Yarn Kg. 10034 8,03,542 36636 35,16,470 (Nil) (Nil) (Nil) (Nil)

4 Fully Draw Yarn Kg. 107453 69,84,435 57912 46,93,208

(Nil) (Nil) (Nil) (Nil) 5 Cloth Mtr. 20211 22,17,196 33176 42,16,338 (Nil) (Nil) (Nil) (Nil)

Total . . . 1,41,87,515 1,78,81,543 (Nil) (Nil)

Note: Opening Stock for the year ended 31/03/2008 represents the Stock transfer received as per the Scheme of arrangement for Demerger as approved by the Hon’ble Gujarat High Court.

c) Production meant for Sale Sr. No.

Product Unit Quantity

1 Partially Oriented Polyester Filament Yarn (POY) Kg. 4999460(Nil)

2 Polyester Texturised Yarn Kg. 1368459 (Nil)

3 Draw Twisted Yarn Kg. 1547270 (Nil)

4 Fully Draw Yarn Kg. 9032213 (Nil)

d) Purchase of Finished Goods


Quantity Amount

1 Cloth Mtr. 3714352 23,80,89,124 (Nil) (Nil)

2 Chips Kg 228090 1,28,25,162 (Nil) (Nil)

3 Partially Oriented Polyester Filament Yarn (POY) Kg 24305 18,79,681 (Nil) (Nil)

3966747 25,27,93,967 Total . . . (Nil) (Nil)

70

e) Sales


Quantity Amount

1 Partially Oriented Polyester Filament Yarn (POY) Kg. 5029784 31,53,69,579 (Nil) (Nil)

2 Polyester Texturised Yarn Kg. 1345385 11,57,26,612 (Nil) (Nil)

3 Draw Twisted Yarn Kg. 1520667 16,73,20,576 (Nil) (Nil)

4 Fully Draw Yarn Kg. 9081755 82,45,39,919 (Nil) (Nil)

5 Chips Kg 368415 2,23,26,156 (Nil) (Nil)

6 Cloth Mtr.

3701388 27,44,79,915 (Nil) (Nil)

7 Others (including Job Charges & Power & Fuel

Income) - 16,64,27,811 - (Nil)

Total . . . 21572441 1,88,61,90,568 Nil Nil

f) Consumption of Raw Materials

Sr. No. Item Unit Quantity

Amount

1 Polyester Chips 4112574 29,68,44,309 (Nil) (Nil)

2 Pure Terephthalic Acid (PTA) 11822710 46,16,03,319 (Nil) (Nil)

3 Mono Ethylene Glycol (MEG) 4736185 23,92,93,644 (Nil) (Nil)

4 Others - 2,37,37,320 - Nil

Total . . .

20671469 1,02,14,78,592 (Nil) (Nil)

Note: The above figures do not include captive consumption.

g) Value of Imported & Indigenous Raw Materials, Stores and Spare Parts Consumed and Percentage thereof to the Total Consumption:

Sr. No. Imported Indigenous Total

1 Raw Materials Consumed: Value Rs. 1,27,56,451 1,00,87,22,141 1,02,14,78,592 (Nil) (Nil) (Nil)

Percentage 1.25% 98.75% 100% (Nil) (Nil) (Nil)

2 Stores & Spares Consumed Value Rs. 32,71,989 3,29,94,477 3,62,66,466

(Nil) (Nil) (Nil) Percentage 9.02% 90.98% 100% (Nil) (Nil) (Nil)

71

h) C.I.F. Value of Imports

Amount (Rs.)

1 Capital Goods Nil (Nil)

2 Raw Materials 1,27,56,451 (Nil)

3 Stores and Spares 32,71,989 (Nil)

i) Expenditure in Foreign Exchange

Amount (Rs.)

1 Foreign Traveling Nil (Nil)

2 Interest and Bank Charges 67,94,551

(Nil) j) Earning in Foreign Exchange:

Amount (Rs.)

FOB Value of Exports Nil (Nil)

23. Balances of Debtors, Creditors, Advances etc. are subject to confirmation and reconciliation wherever required. 24. Figures of the previous year have been regrouped and/or rearranged wherever necessary. 25. 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 year's figures have been shown in brackets.

Signature to Schedules "1" to "19"

As per our report of even date attached herewith FOR, CIL - NOVA PETROCHEMICALS LIMITED FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS _________________ _____________ Chairman Director (J T SHAH) PARTNER PLACE : AHMEDABAD DATE : 15/10/2009

72

Audited Balance Sheet as at 31st March, 2009


As at 31.03.2009

Rs.

As at 31.03.2008

Rs.

SOURCES OF FUNDS 1 Shareholders' Funds :

(a) Share Capital 1 135500000 135500000 (b) Share Application Money 414000 414000 (c) Reserves and Surplus 2 Nil Nil

135914000 135914000

2 Loan Funds : (a) Secured Loans 3 603751834 614532795 (b) Unsecured Loans 4 358499932 361889527

962251766 976422322

3 Deferred Tax Liability (Net) Nil Nil Total..... 1098165766 1112336322

APPLICATION OF FUNDS :

1 Fixed Assets : 5 (a) Gross Block 2018911416 2013818061 (b) Less : Depreciation 1238717439 1140385606

Net Block 780193977 873432455 Add: Capital Work in Progress 10656990 10077253

2 Investments : 6 2221 2221

3 Current Assets, Loans and Advances (a) Inventories 7 98387438 137062435 (b) Sundry Debtors 8 289923910 401336205 (c) Cash and Bank Balances 9 14762477 21327215 (d) Loans and Advances 10 80475217 220951352


(a) Current Liabilities 11 360086608 642626009 (b) Provisions 12 6943810 5981574

367030418 648607583 Net Current Assets 116518623 132069622

3 Miscellaneous Expenditure 13 (To the Extent not w/off or adjusted) (a) Profit and Loss Account 190793955 96754770

Total..... 1098165766 1112336322


As per our report of even date attached herewith FOR, CIL-NOVA PETROCHEMICALS LTD


Chairman Director (J.T.SHAH) PARTNER

PLACE : AHMEDABAD Co.

Secretary DATE : 07/08/2010

73



For the year ended

31.03.2009 Rs.

For the year ended

31.03.2008 Rs.

INCOME 1 Sales and Job Charges (Gross) 1709783428 1886190568

Less : Excise Duty 94023262 112454349 Sales (Net) 1615760166 1773736219

2 Other Income 14 2982363 5998055 3 Increase/(Decrease) in stock 15 (71252934) 30634461

Total..... 1547489595 1810368736

EXPENDITURE 1 Materials 16 931073975 1273870674 2 Payments to and Provisions

for Employees 17 29211048 24306799 3 Operational and Other Expenses 18 491612165 468622957

1451897188 1766800430

Profit before Interest, Depreciation and Taxation 95592407 43568306

Less : Interest and Financial Charges 19 90285720 93771013 Profit before Depreciation and Taxation 5306687 (50202707)

Less : Depreciation 5 98331838 111683332 Profit / (Loss) before Taxation (93025151) (161886039)

Less : Provision for Taxation - Current including Wealth Tax 250000 250000 - Fringe Benefit Tax 700000 250000

- Deferred Nil Profit / (Loss) after Taxation (93975151) (162386039)


Basic and Diluted earning per share (3.48) (6.01)

As per our report of even date attached herewith CIL-NOVA PETROCHEMICALS LTD



PLACE : AHMEDABAD Co.

Secretary DATE : 07/08/2010

74



31.03.2009 Rs.

As at 31.03.2008

Rs.

SCHEDULE - 1

SHARE CAPITAL

1 Authorised Capital 1,50,00,000 Equity Shares (Previous Year 1,50,00,000) of Rs. 10/- each. 150000000 150000000

150000000 150000000

2 Issued, Subscribed and Paid-up Capital

50,000 (Pr. Year 50,000)

Equity shares of Rs.10 each fully paid up 500000 500000 500000 500000

3 Share Capital Suspense


50000 Equity Shares of Rs.10/- each fully paid up to be cancelled after Balancesheet Date (500000) (500000)

27000000 Equity Shares of Rs.5/- each fully paid up to be issued after Balancesheet Date 135000000 135000000

100000 Equity Shares of Rs.5/- each fully paid up to be issued after Balancesheet Date 500000 500000

Total..... 135500000 135500000

SCHEDULE - 2

RESERVES AND SURPLUS 1 Share Premium

Balance as per last year 118970013 Nil Add:Amount transferred upon Demerger Nil 118970013

118970013 118970013 2 General Reserve

Balance as per last year 22500000 Nil Add:Amount transferred upon Demerger Nil 22500000

22500000 22500000 3 Profit and Loss Account

Balance as per last year (237072771) Nil Add:Amount transferred upon Demerger Nil (74686732) Add : Additions during the year (93975151) (162386039)

(331047922) (237072771) (189577909) (95602758)

Add : Transferred to Miscellaneous 189577909 95602758 Expenditure

Total..... Nil Nil

75


31.03.2009 Rs.

As at 31.03.2008

Rs.

SECURED LOANS

1 Term Loans from Banks 429551924 426956979 2 Working Capital Loans from Banks 172410232 187316942 2 Other Loan 1789677 258875

Total..... 603751834 614532795

1

Term Loans are secured by mortgage of all Immovable and Movable properties, both present and future; subject to prior charge in favour of bankers on specified Movable Assets for Working Capital loans and further secured by personal guarantee of

2 Working Capital loans are secured by first charge on Book Debts and Stocks, and further secured by personal guarantee of the Promoter Directors.

SCHEDULE - 4

UNSECURED LOANS 1 From Banks 33370757 30976701 2 Security Deposits 8484213 12288402 3 From Corporate Bodies 316590962 311320424 4 From others 54000 7304000

Total.... 358499932 361889527

SCHEDULE - 6

INVESTMENTS



1 1 (Previous Year 1) Equity Shares of Reliance Natural Resources Ltd., of Rs. 5/- each fully paid-up

3

3 2 50 (Previous Year 50) Equity Shares of Century Enka Ltd.,

of Rs. 10/- each fully paid-up 1890

1890 3 50 (Previous Year 50) Equity Shares of Garden Silk Mills

Ltd., of Rs. 10/- each fully paid-up 328

328 2221 2221

Total... 2221 2221

Aggregate value of Quoted Investments 2221 2221 Market value of Quoted Investments 5205 8120

INVENTORIES

1 Raw Materials 41458989 15078869 2 Stores, Spares and Fuel 32463236 33241139 3 Packing Materials 3344824 498553 4 Work-In-Process 10425534 69703648 5 Finished Goods 1690385 17881543 6 Trading Stock 4216338 Nil 7 Goods-in-Transit 4788132 658683

Total... 98387438 137062435

76


31.03.2009 Rs.

As at 31.03.2008

Rs.

SCHEDULE - 8 SUNDRY DEBTORS (Unsecured except reported at Note no 27 of Schedule 19)

Considered Good 1 Outstanding for a Period exceeding 6 Months 5618650 52348387 2 Others 284305260 348987818

289923910 401336205 Considered Doubtful

1 Outstanding for a Period exceeding 6 Months 6870371 7089158 2 Others Nil Nil

6870371 7089158 296794281 408425363

Less: Provision for Doubtful Debtors 6870371 7089158

Total.... 289923910 401336205

SCHEDULE - 9 CASH AND BANK BALANCES


- In Current Account 4026567 9326546 - In Fixed Deposit 10529854 11885908

14556420 21212454 3 Balance with Non Scheduled Bank in Current Accounts 2014 2136

Total.... 14762477 21327215 SCHEDULE - 10 LOANS AND ADVANCES (Unsecured)

1 Advances Recoverable in Cash or Kind Considered Good 37862653 179935089 Considered Doubtful 5244671 5519827

43107324 185454915 Less: Provisiond for Doubtful Advances 5244671 5519827

37862653 179935089 2 Deposits 24031037 23806537 3 Advance to Staff Nil Nil 4 Balance with Excise authority (Payable on Demand) 347 Nil 5 Advance Tax and TDS 18581179 17209726

Total..... 80475217 220951352

SCHEDULE - 11 CURRENT LIABILITIES

1 Sundry Creditors 356517533 624627760 2 Book Overdraft 925456 1759505 3 Advance from Customers / Employees 1746517 15340877 4 Unclaimed dividend 897103 897867

Total.... 360086608 642626009 PROVISIONS

1 Provision for Taxation 6943810 5981574 2 Provision for Dividend Nil Nil 3 Provision for Tax on Proposed Dividend Nil Nil

Total.... 6943810 5981574

77

SCHEDULE - 13

MISCELLANEOUS EXPENDITURE Preliminary & Pre Operative Expense

Balance as per last year 1152012 1131040 Add : Additions During The Year 64034 20972

1216046 1152012 Profit & Loss Account

Net Deficit after adjustment of Reserves & Surplus (Refer Schedule 2) 189577909 95602758

Total.... 190793955 96754770

SCHEDULE - 14

OTHER INCOME

1 Interest (TDS Rs. 322423/- Previous year Rs. 655218/)

2578044 3886479 2 Miscellaneous Balances Written off 16500 1431760 3 Miscellaneous Income 384522 657730 4 Dividend 3297 2200 5 Profit on Sale of Fixed Asset Nil 19886

Total.. 2982363 5998055

SCHEDULE - 15

INCREASE / (DECREASE) IN STOCK

Closing Stock : 1. Finished Goods 5906723 17881543 2. Work-In-Process 10425534 69703648

16332257 87585191 Less : Opening Stock

1. Finished Goods 17881543 Nil 2. Work-In-Process 69703648 Nil

87585191 Nil Add: Opening Stock received upon Demerger Scheme 1. Finished Goods 14187515 2. Work-In-Process 42763215

Total.. (71252934) 30634461

SCHEDULE - 16

MATERIALS

Raw Materials Consumed 910102119 1021076707 Purchase of Finished Goods 20971856 252793967

Total.. 931073975 1273870674 PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

1 Salary and Wages 27045678 22098508 2 Contribution to P.F. and other funds 1136925 1296908 3 Staff and Labour Welfare 1028445 911383

Total.. 29211048 24306799

78

SCHEDULE - 18

OPERATIONAL, ADMINISTRATIVE AND SELLING EXPENSES

1 Stores and Spares Consumed 16411274 36266466 2 Power and Fuel Consumed 250837337 189088580 3 Packing Material Consumed 69197323 74588666 4 Freight,Cartage and Octroi 23021587 24766017 5 Insurance 3556152 4832111 6 Rent,Rates and Taxes 533355 443122 7 Vat Expense 72209613 81296663 8 Excise Duty Expenses 246445 38796 9 Service Tax 463677 2690776

10 Postage and Telephone Expenses 634928 455068 11 Stationery, Printing and Advertisement 429962 633804 12 Selling and Distribution Expenses 34002283 30463535 13 Travelling, Conveyance and Vehicle Expenses 2493137 2999211 14 Repairs and Maintenance :

(a) Plant 10176789 3495550 (b) Building Nil Nil (c) Others 1563271 773026

11740060 4268576 15 Legal and Professional Exps. 2218264 2711079 16 Exchange Rate Difference 2093800 2165622 17 Auditor's remuneration :

(a) Audit fees 150000 150000 (b) Tax Audit fees 25000 25000 (c) Taxation and Others 25000 25000 (d) Certification Nil 8774

200000 208774 18 Miscellaneous Expenses 1816957 2139931 19 Provision for Doubtful Debtors and Advances (Net) (493988) 8566159 20 Bad Debts Nil Nil

Less: Provision available Nil Nil Total ... 491612165 468622957

SCHEDULE - 19


1 Interest on Term Loans 50966015 43888932 2 Interest on Working Capital Loans 16001258 20954975 3 Bank and Other Charges 17689961 20166241 4 Interest to Others 5628486 8760865 5 Hire Purchase Charges Nil Nil

Total ..... Total ... 90285720 93771013

79

SCHEDULE - 20

NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2009





d. Inventories

Inventories at year-end are valued at the lower of cost and net realizable value. The basis of determining the cost for

various categories of inventories is as follows:

(iii) In case of Raw Materials, Stores, Spares, Fuel and Packing Materials on FIFO basis. (iv) In case of Finished Goods and Work-In-Progress on FIFO basis.



f. Sales

Sales are accounted for on dispatch of goods to the customers and are inclusive of Excise Duty and Sales Tax but net of sales returns and trade discounts.

g. Investments

Long Term Investments are stated at its cost.

h. Borrowing Cost Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue.

i. Taxation

i) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per the

applicable provisions of the Income Tax Act, 1961.


j. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

80

k. Employee Benefits

(i) The employee and Company make monthly fixed Contribution to Government of India Employee’s Provident

fund equal to a specified percentage of the covered employee’s salary, Provision for the same is made in the year in which service are rendered by the employees.

(ii) The Liability for Gratuity to employee, which is a defined benefit plan, is determined on the basis of actuarial

Valuation based on Projected Unit Credit method. Actuarial gain/Loss in respect of the same is charged to the profit and loss account.

(iii) Leave encashment benefit to eligible employee has been ascertained on actuarial basis and provided for.

Actuarial gain/loss in respect of the same is charged to the profit and loss account. 27. In terms of the scheme of arrangement under section 391 to 394 of the Companies Act,1956(“the Scheme”)between Nova

Petrochemical Ltd and Nova Poly Yarn Ltd,Nova Petrochemical has re-organised and segregated by way of a demerger, its business inrespect of undertaking Unit II situated at Survey Number 391,395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad engaged in yarn production & its allied activities to separate transferee company. All the assets and liabilities are transferred pursuant to approved order of the Hon’ble High Court of Gujarat dated 27th August,2009 and the appointed date as per the scheme is 1st April,2007.

As per the said scheme: In consideration of the demerger, the company issued and allotted 2,70,00,000 equity shares amounting to Rs.13,50,00,000/- 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 on equity share of Rs.10 each fully paid up held by the shareholders of Nova Petrochemicals Ltd.

28. Pursuant to the Company’s Scheme of Arrangement (Scheme) to demerge Unit-II situated at Survey Number 391,395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad, previous year figures are not comparable to that extent.


2008-2009 Rs. (in Lacs)

2007-2008 Rs. (in Lacs)

a)

Letters of Credit Outstanding

1956.05 1798.37

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

272.60 245.80

c) Disputed demand of Custom Duty (Against which the Company has paid amount of Rs. 17.08 Lacs)

Nil 10.00

d) Excise Duty demands disputed in appeal by the Company/ Excise Authorities (Against which the Company has paid amount of Rs. 202.50 Lacs)

2741.62 866.27

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

50.90 Nil

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

Nil 13.47

g) Claims not acknowledged as debts by the company

1.13 54.39

h) Show Cause Notices received from various authorities

158.66 974.13

i) Employees Demands pending before Labour Courts



81

30. 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 2009 is Rs. 1326.32 Lacs (Previous Year Rs. 1483.76 Lacs).

31. The company had requested the banks and CDR for Extension of period of Relief under the CDR Mechanism & Approval for

other concessions. The CDR-EG has approved the reworked proposal for restructuring of bank loans/facilities on 25th March, 2009 and approval was conveyed to all the banks by CDR Cell vide their letter dated 31.03.2009.

32. Debtors include Rs. Nil (Previous Year Rs. 1.48 Lacs) due from private companies in which some of the directors are interested

as directors and Rs. Nil Lacs (Previous Year Rs. 1.40 Lacs) due from firms in which some of the directors are interested as partners.

33. Loans and Advances includes Rs. Nil Lacs (Previous Year Rs. 982.01 Lacs) due from private companies in which some of the

directors are interested as directors and Rs. Nil (Previous Year Rs. 103.12 Lacs) due from firms in which some of the directors are interested as partners.

34. Secured and Unsecured loans where repayments are stipulated include Rs.327.60 Lacs (Previous year Rs.Nil Lacs) repayable

within a period of one year. 35. Traveling, Conveyance & Vehicle Expenses include Directors Traveling Rs. 1.98 Lacs (Previous Year Rs. 1.81 Lacs). 36. Borrowing cost incurred during the year, which are attributable to the acquisition or construction of Qualifying Assets to the

extent of Rs. Nil (Previous Year Rs. Nil) are capitalized by the company. 37. Maximum debit balance in Non Schedule Bank during the year is Rs. 0.04 Lacs (Previous year Rs 0.04 Lacs). 38. Prior Period Expenses includes

31-03-2009 31-03-2008 (i) Raw Material Consumption 6,46,641 (4,01,885) (ii) Payment to Employees 2,98,258 (27,697) (iii) Freight & Cartage 67,134 3,47,521 (iv) Rent Rates and Taxes (1,93,749) (41,473) (v) Repairs & Maintenance Expense 8,64,562 5,67,473 (vi) Miscellaneous Expenses 98,473 1,53,400 (vii) Interest Short Recognized Nil 59,607 (viii) Legal & Professional Expense 2,70,725 Nil (ix) Traveling Expense 81,115 Nil

Total . . . 21,33,159 6,56,946 39. Disclosure of As-15 of Gratuity is as Under:

Sr. No. Particulars

Gratuity (Funded)

Defined benefit Obligation

31/03/09

Gratuity (Funded)


(i) Employee Benefit Obligations The amounts (in Rs.) recognized in the balance sheet.

Present value of funded obligations 472,160 1,162,086 Fair value of plan assets 472,160 1,162,086 Present value of unfunded obligations 2,950,624 1,759,422 Unrecognized past service cost - - Net liability 2,950,624 1,759,422 Amounts in the balance sheet: - Liabilities 2,950,624 1,759,422

- Assets - -

Net liability 2,950,624 1,759,422

82

(ii) The amounts (in Rs.) recognized in the statement of profit and loss.

Current service cost 762,793 480,174 Interest on obligation 231,091 343,327 Expected return on plan assets (73,541) (131,667) Net actuarial losses (gains) recognised in year 340,820 (1,207,703) Past service cost Losses (gains) on curtailments and settlement - - Total, included in 'employee benefit expense' 1,261,163 (515,869) Actual return on plan assets 88,651 141,175 (iii) Changes in the present value of the defined benefit

obligation representing reconciliation of opening and closing balances thereof.

Opening defined benefit obligation 2,921,508 4,039,137 Service cost 762,793 480,174 Interest cost 231,091 343,327 Actuarial losses (gains) 355,930 (1,198,195) Losses (gains) on curtailments - -

Liabilities extinguished on settlement - -

Liabilities assumed in an - -

amalgamation in the nature of purchase - -

Exchange differences on foreign plans - -

Benefits paid (848,538) (742,935) Closing defined benefit obligation 3,422,784 2,921,508 (iv) Changes in the fair value of plan assets representing


Opening fair value of plan assets 1,162,086 1,763,846 Expected return 73,541 131,667 Actuarial gains and (losses) 15,110 9,508 Assets distributed on settlements - - Contributions by employer 69,961 - Assets acquired in an amalgamation - - In the nature of purchase - - Exchange differences on foreign plans - - Benefits paid (848,538) (742,935) closing balance of fair value of plan assets 472,160 1,162,086 (v) The major categories of plan assets as a percentage of

total plan assets. Government of India Securities 0.00% 0.00% High quality corporate bonds 0.00% 0.00% Equity shares of listed companies 0.00% 0.00% Property 0.00% 0.00% Insurance Company 100.00% 100.00%

83

(vi) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages) :

Discount rate 7.91% 8.50% Expected return on plan assets 9.00% 9.00% Proportion of employees opting for early retirement - - Annual increase in Salary costs 6.00% 6.00% Future changes in maximum state health care benefits - - Employment Market. (vii) Amount for the current period.

Defined benefit obligation 3,422,784 2,921,508 Plan assets 472,160 1,162,086 Surplus/(deficit) (29,50,624) (1,759,422) Experience adjustments on plan Liabilities - - Experience adjustments on plan assets - - (viii) Movement in net liability recognised in Balance Sheet.

Net opening liability 1,759,422 2,275,291 P&L Charge 1,261,163 (515,869) Contribution paid (69,961) - closing net liability 2,950,624 1,759,422 (ix) Transitional Liability

D.B.O. As on 1-4-2008 - 4,039,137 Market value of Investment as on 1-4-2008 - (1,763,846) Provision in books of Accounts maintained under the

Accounting Standard. - (2,218,969) transitional liability (assets) as on 1-4-2008 - 56,322 Note - Transitional liability (assets) as on 1-4-2008 Is worked out

on the basis of discount rate - 8.50 40. Disclosure of As-15 of Leave Encashment is as Under:

Sr. No. Particulars





(i) Employee Benefit Obligations The amounts (in Rs.) recognized in the balance sheet.

Present value of funded obligations - - Fair value of plan assets - - Present value of unfunded obligations 1,526,442 882,672 Unrecognized past service cost - - Net liability 1,526,442 882,672 Amounts in the balance sheet: - Liabilities 1,526,442 882,672 - Assets - Net liability 1,526,442 882,672

84

(ii) The amounts (in Rs.) recognized in the statement of profit and loss.

Current service cost 664,937 169,412 Interest on obligation 69,819 74,671 Expected return on plan assets - - Net actuarial losses (gains) recognised in year (90,986) (151,482)

Past service cost Losses (gains) on curtailments and settlement - - Total, included in 'employee benefit expense' 643,770 92,601 Actual return on plan assets (iii)

Changes in the present value of the defined benefit obligation representing reconciliation of opening and closing balances thereof.

Opening defined benefit obligation 882,672 878,483 Service cost 664,937 169,412 Interest cost 69,819 74,671 Actuarial losses (gains) (90,986) (151,482) Losses (gains) on curtailments - -

Liabilities extinguished on settlement - -

Liabilities assumed in an - -

amalgamation in the nature of purchase - -

Exchange differences on foreign plans - -

Benefits paid - (88,412) Closing defined benefit obligation 1,526,442 882,672 (iv)

Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof.

Opening fair value of plan assets - - Expected return - - Actuarial gains and (losses) 0 - Assets distributed on settlements - - Contributions by employer - - Assets acquired in an amalgamation - - In the nature of purchase - - Exchange differences on foreign plans - - Benefits paid - - closing balance of fair value of plan assets - - (v) The major categories of plan assets as a percentage of

total plan assets. Government of India Securities 0.00% 0.00% High quality corporate bonds 0.00% 0.00% Equity shares of listed companies 0.00% 0.00% Property 0.00% 0.00% Insurance Company 0.00% 0.00%

85

(vi) Principal actuarial assumptions at the balance sheet date (expressed as weighted averages) :

Discount rate 7.91% 8.50% Expected return on plan assets 0.00% Proportion of employees opting for early retirement - - Annual increase in Salary costs 6.00% 6.00%

Future changes in maximum state health care benefits - -

Employment Market. (vii) Amount for the current period.

Defined benefit obligation 1,526,442 882,672 Plan assets - - Surplus/(deficit) (1,526,442) (882,672) Experience adjustments on plan Liabilities - - Experience adjustments on plan assets - -

(viii) Movement in net liability recognised in Balance Sheet. Net opening liability 882,672 878,486 P&L Charge 643,770 92,601 Contribution paid - (88,412) closing net liability 1,526,442 882,672 (ix) Transitional Liability

D.B.O. As on 1-4-2008 - 878,483 Market value of Investment as on 1-4-2008 - - Provision in books of Accounts maintained under the

Accounting Standard. - (1,484,175) transitional liability (assets) as on 1-4-2008 - (605,692) Note Transitional liability (assets) as on 1-4-2008 Is worked out

on the basis of discount rate - 8.50

41. 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.


Particulars 31-03-2009 31-03-2008 Numerator used for calculating Basic and Diluted Earning Per Share (Profit After Tax)

(93975151) (162386039)

Nominal Value per Share 5 5 Weighted Average No. of Shares used as denominator for calculating Basic and Diluted Earning Per Share

27100000 27100000

Basic and Diluted earning per share (3.48) (6.01)

86


d) Key Management Personnel Sr. No. Name Designation

1 Shri Jyotiprasad Chiripal Chairman 2 Shri Vedprakash Chiripal Director 3 Shri Sunikumar Gupta Director 4 Shri Shyam Gupta Director

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

Sr. No. Name

1 Chiripal Industries Ltd. 2 Deepak Enterprise 3 Gupta Dying and Printing Mills 4 Gupta Dying and Printing Mills Pvt. Ltd. 5 Gupta Synthetics Limited 6 Gupta Silk Mills Pvt. Ltd. 7 Nandan Exim Ltd. 8 Shanti Exports Pvt. Ltd. 9 Vishal Fabrics Pvt. Ltd. 10 ShubhLaxmi Dying and Print Mills P. Ltd 11 NPL Power Pvt. Ltd. 12 GSL-Nova Pertochemicals Limited

f) Details of Transactions with Key Management Personnel and Related Parties of the Key Management

Personnel are as follows: (Rs. in Lacs)


Key Management

Personnel


Relatives of Key

Management Personnel

Total

1 Unsecured Loans Taken during the year NIL 2388.39 NIL 2388.39

(NIL) (1884.58) (NIL) (1884.58) Balance as at Balance Sheet Date NIL 1194.42 NIL 1194.42

(NIL) (3109.21) (NIL) (3109.21) 2 Advances Recoverable in Cash or

Kind

Given during the year NIL NIL NIL NIL (NIL) (90.57) (NIL) (90.57)

Balance as at Balance Sheet Date NIL NIL NIL NIL (NIL) (1356.28) (NIL) (1356.28)

3 Advances Received from Customers

Received during the year NIL NIL NIL NIL (NIL) (6.70) (NIL) (6.70) Balance as at Balance Sheet Date NIL 6.93 NIL 6.93 (NIL) (10.27) (NIL) (10.27)

4 Expenditure Agency Commission Paid NIL NIL NIL NIL

(NIL) (3.94) (NIL) (3.94) Purchase of Goods, Packing Material

and Stores NIL 1447.47 NIL 1447.47

(NIL) (1102.27) (NIL) (1102.27) Jobwork Charges NIL 399.10 NIL 399.10 (NIL) (600.07) (NIL) (600.07)

87

5 Income Received Power & Fuel Income NIL 1153.75 NIL 1263.46 (NIL) (1029.37) (NIL) (1029.37) Interest Received NIL NIL NIL NIL

(NIL) (NIL) (NIL) (NIL) Jobwork Income NIL 166.84 NIL 166.84

(NIL) (398.08) (NIL) (398.08)

6 Stock in trade Sold / Redeemed during the year NIL 407.88 NIL 407.88


(NIL) (630.36) (NIL) (630.36)

7 Other Transactions Payment received on behalf of others NIL 1.08 NIL 1.08

(NIL) (91.50) (NIL) (91.50) Payment made on their behalf NIL 0.02 NIL 0.02

(NIL) (9.66) (NIL) (9.66)

Note :List of transaction, out of the transactions reported in the above table, where the transactions entered in to with single party exceed the 10% of the total related Party transactions of similar nature are as under :

7. Unsecured Loan Rs. In Lacs Taken :- ----------------

- Chiripal Industies Ltd. 2375.30

8. Expenditure :- Purchase of Goods, Packing Material and Stores :-

- Chiripal Industies Ltd 1405.19


9. Income Received :-

Power & Fuel Income: - GSL-Nova Petrochemicals Ltd. 1153.75

Jobwork Income: - Chiripal Industries Ltd. 166.84

10. Stock in trade :- Sold / Redeemed during the year

- Chiripal Industries Ltd. 373.26 44. 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.


Debited to Profit and Loss Account Rs. 20.94 Lacs (Previous Year Debited to Profit & Loss Account Rs. 24.02 Lacs)

46. 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.

c) Sundry Creditors include Rs. 48.75 Lacs (Previous year Rs. 47.33 Lacs) due to Small Scale and ancillary concerns. d) The undertakings to whom amounts outstanding for more than 30 days as on 31st March, 2009, in respect of Small

Scale and ancillary concerns where such dues exceed Rs. One Lac are as under: Akar Packers Pvt. Ltd., Akshat Trader, Anushree Paper Packs Pvt. Ltd., Arjun Packaging,Auto Strap India,Flexi Bond Industries, Fortune Fabrics Pvt Ltd, Pooja Plastic Ind.

88

47. Balance in Current Account with Scheduled Banks includes Rs. 5.61 Lacs (Previous Year Rs. 5.62 Lacs) in the unpaid dividend

account with various banks. 48. 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.

49. Sundry Debtors are Secured to the extent of Rs.7.50 Lacs (Previous Year Rs. 7.50 Lacs) 50. Information pursuant to provision of paragraphs 3 and 4 of part II of Schedule VI Companies Act, 1956. (As certified by

Directors): k) Licensed & Installed Capacity :

Sr. No. Product Name Licensed Capacity Installed Capacity


License is not required 15085 Tons p.a.* (License is not required) (15085 Tons p.a.)*

2 Polyester Texturised Yarn License is not required 3011 Tons p.a.* (License is not required) (3011 Tons p.a.)*

3 Draw Twisted Yarn License is not required 3282 Tons p.a.* (License is not required) (3282 Tons p.a.)*

4 Fully Draw Yarn License is not required 11532 Tons p.a.* (License is not required) (11532 Tons p.a.)*

* The revised installed capacity has been stated on the basis of TEV study of MottMcDonald. l) Opening Stock & Closing Stock of Finished Goods



Quantity Amount



Kg. 61368 27,13,743 58775 15,45,032

(67388) (32,99,605) (61368) (27,13,743)

2 Polyester Texturised Yarn Kg. 35150 27,41,784 14023 14,05,984

(12076) (8,82,737) (35150) (27,41,784)

3 Draw Twisted Yarn Kg. 36636 35,16,470 13493 13,44,286

(10034) (8,03,541) (36636) (35,16,470)

4 Fully Draw Yarn Kg. 57912 46,93,208 21400 16,11,421 (107453) (69,84,436) (57912) (46,93,208)

5 Cloth Mtr. 33176 42,16,338 Nil Nil (20211) (22,17,196) (33176) (42,16,338)

Total . . . 1,78,81,543 59,06,723 (1,41,87,515) (1,78,81,543)

m) Production meant for Sale


Quantity 1 Partially Oriented Polyester Filament Yarn (POY) Kg. 4958250

(4999460) 2 Polyester Texturised Yarn Kg. 1329101

(1368459)3 Draw Twisted Yarn Kg. 2469176

(1547270) 4 Fully Draw Yarn Kg. 7944631

(9032213) 5 Polyester Chips Kg 252297

(221510)

89

n) Purchase of Finished Goods


Quantity Amount

1 Cloth Mtr. 143881 55,62,958 (3714352) (23,80,89,124)

2 Polyester Chips Kg 91767 49,00,978 (228090) (1,28,25,162)

3 Partially Oriented Polyester Filament Yarn (POY) Kg Nil Nil

(24305) (18.79,681) 4 Draw Twisted Yarn Kg 97641 1,05,07,920

(Nil) (Nil) 333289 2,09,71,856 Total . . . (3966747) (25,27,93,967)

o) Sales Sr. No. Product Unit

Quantity Amount

1 Partially Oriented Polyester Filament Yarn (POY) Kg. 4960843 31,86,27,969 (5029784) (31,53,69,579)

2 Polyester Texturised Yarn Kg. 1350228 12,07,78,958 (1345385) (11,57,26,612)

3 Draw Twisted Yarn Kg. 2589960 31,65,37,543 (1520667) (16,73,20,576)

4 Fully Draw Yarn Kg. 7981142 78,40,31,680 (9081755) (82,45,39,919)

5 Polyester Chips Kg 344064 1,87,93,296(368415) (2,23,26,156)

6 Cloth Mtr. 177057 93,22,422 (4226435) (27,44,79,915)

7 Others (including Job Charges & Power & Fuel Income) - 14,16,91,560 - (16,64,27,811)

Total . . . 17403294 1,70,97,83,428 (21572441) (1,88,61,90,568)

p) Consumption of Raw Materials


Amount

1 Polyester Chips 9620841 52,07,81,151 (4112574) (29,68,44,309)

2 Pure Terephthalic Acid (PTA) 5883898 23,54,84,074 (11822710) (46,16,03,319)

3 Mono Ethylene Glycol (MEG) 2308136 9,18,60,104 (4736185) (23,92,93,644)

4 Others - 6,19,76,790 - (2,33,35,435)

Total . . . 17812875 91,01,02,119 (20671469) (1,02,10,76,707)


q) Value of Imported & Indigenous Raw Materials, Stores and Spare Parts Consumed and Percentage thereof to the Total Consumption:

Sr. No. Imported Indigenous Total

1 Raw Materials Consumed: Value Rs. Nil 91,01,02,119 91,01,02,119 (1,27,56,451) (1,00,83,20,286) (1,02,10,76,707)

Percentage 0% 100% 100% (1.25%) (98.75%) (100%)

2 Stores & Spares Consumed Value Rs. Nil 1,64,11,274 1,64,11,274

(32,71,989) (3,29,94,477) (3,62,66,466) Percentage 0% 100% 100% (9.02%) (90.98%) (100%)

90

r) C.I.F. Value of Imports

Amount (Rs.)

1 Capital Goods Nil (Nil)

2 Raw Materials Nil(1,27,56,451)

3 Stores and Spares Nil (67,21,293)

s) Expenditure in Foreign Exchange

Amount (Rs.)

1 Foreign Traveling Nil (Nil)

2 Interest and Bank Charges Nil

(67,94,551)t) Earning in Foreign Exchange:

Amount (Rs.)

FOB Value of Exports Nil (Nil)

51. Balances of Debtors, Creditors, Advances etc. are subject to confirmation and reconciliation wherever required. 52. Figures of the previous year have been regrouped and/or rearranged wherever necessary. 53. 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. Signature to Schedules "1" to "20" As per our report of even date attached herewith FOR, CIL NOVA PETROCHEMICALS LIMITED FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS_______________ _______ Chairman Director (J T SHAH) PARTNER Co. Secretary PLACE : AHMEDABAD DATE : 07/08/2010

91

CIL NOVA PETROCHEMICALS LTD Audited Balance Sheet as at 31st March, 2010


As at 31.03.2010

Rs.

As at 31.03.2009

Rs.

SOURCES OF FUNDS 1 Shareholders' Funds :

(a) Share Capital 1 185500000 135500000 (b) Share Application Money 414000 414000 (c) Reserves and Surplus 2 529863446 118970013

715777446 254884013 2 Loan Funds :

(a) Secured Loans 3 621036991 603751834 (b) Unsecured Loans 4 344650270 358499932

965687260 962251767 3 Deferred Tax Liability (Net) Nil Nil

Total..... 1681464706 1217135780


1 Fixed Assets : 5 (a) Gross Block 2517238502 2018911416 (b) Less : Depreciation 1328436696 1238717439

Net Block 1188801806 780193977 Add: Capital Work in Progress 25858989 10656990

2 Investments : 6 12221 2221 3 Current Assets, Loans and Advances

(a) Inventories 7 186678381 98387438 (b) Sundry Debtors 8 298084043 289923910 (c) Cash and Bank Balances 9 15167934 14762477 (d) Loans and Advances 10 74029748 73531407


(a) Current Liabilities 11 407881590 360086608 (b) Provisions 12 Nil 0

407881590 360086608 Net Current Assets 166078515 116518624

3 Miscellaneous Expenditure 13 (To the Extent not w/off or adjusted)

(a) Profit and Loss Account 300713175 309763968

Total..... 1681464706 1217135780


As per our report of even date attached herewith FOR, CIL NOVA PETROCHEMICALS LTD


Chairman Director (J.T.SHAH) PARTNER PLACE : AHMEDABAD Co. Secretary DATE : 07.08.2010

92



For the year ended

31.03.2010 Rs.

For the year ended

31.03.2009 Rs.

INCOME 1 Sales and Job Charges (Gross) 2062682882 1709783428

Less : Excise Duty 120546063 94023262

Sales (Net) 1942136819 1615760166 2 Other Income 14 8302518 3476351 3 Increase/(Decrease) in stock 15 90433429 (71252934)

Total..... 2040872766 1547983583

EXPENDITURE 1 Materials 16 1279607294 931073975 2 Payments to and Provisions

for Employees 17 26380654 29211048 3 Operational and Other Expenses 18 558635301 492106153

1864623249 1452391176 Profit before Interest, Depreciation and Taxation 176249517 95592406

Less : Interest and Financial Charges 19 91065874 90285720

Profit before Depreciation and Taxation 85183643 5306687

Less : Depreciation 5 90079445 98331838

Profit / (Loss) before Taxation (4895802) (93025151) Add: Exceptional Item 12730550 Nil

Profit / (Loss) before Taxation 7834748 (93025151) Less : Provision for Taxation

- Current including Wealth Tax Nil 250000 - Fringe Benefit Tax Nil 700000

- Deferred Nil Nil

Profit / (Loss) after Taxation 7834748 (93975151)


Basic and Diluted earning per share 0.29 (3.47)

As per our report of even date attached herewith CIL NOVA PETROCHEMICALS LTD



PLACE : AHMEDABAD Co. Secretary DATE : 07.08.2010

93



31.03.2010 Rs.

As at 31.03.2009

Rs.

SCHEDULE - 1 SHARE CAPITAL 1 Authorised Capital

5,50,00,000 Equity Shares (Previous Year 1,50,00,000 of Rs.10/- each) of Rs. 5/- each. 275000000 150000000

5,00,000 8% Non Cumulative Redeemable 50000000 Nil Preference Shares (Previous Year Nil)

of Rs. 100/- each. 325000000 150000000

2 Issued, Subscribed and Paid-up Capital 2,71,00,000 (Pr. Year 50,000 of Rs.10/- each)

Equity shares of Rs.5/- each fully paid up 135500000 500000

5,00,000 (Pr. Year Nil)8% Non Cumulative 50000000 Nil

Redeemable Preference shares of Rs.100/- each fully paid up

185500000 500000 3 Share Capital Suspense


Nil(Pr.Year 50000 Equity Shares) of Rs.10/- each fully paid up to be cancelled after Balancesheet Date Nil (500000)

Nil(Pr. Year 27000000 Equity Shares) of Rs.5/- each fully paid up to be issued after Balancesheet Date Nil 135000000

Nil(Pr.Year 100000 Equity Shares) of Rs.5/- each fully paid up to be issued after Balancesheet Date Nil 500000

Nil 135000000 4 Share Application Money 414000 414000

Total..... 185914000 135914000

SCHEDULE - 2 RESERVES AND SURPLUS 1 Revaluation Reserve

Balance as per last year Nil Nil Add:on Revaluation 410893433 Nil

410893433 Nil Less:Transferred to Profit & Loss Account Nil Nil

410893433 Nil 1 Share Premium

Balance as per last year 118970013 118970013 Add: Addition/Deduction during the year Nil Nil

118970013 118970013 2 General Reserve

Balance as per last year 22500000 22500000

Less :Adujusted against Debit balance of Profit & Loss (22500000) (22500000)

Nil Nil

94


31.03.2010 Rs.

As at 31.03.2009

Rs.

3 Profit and Loss Account Balance as per last year (331047922) (237072771) Add : Additions during the year 7834748 (93975151)

(323213175) (331047922)

Add:Amount adjusted against Credit balance of General Resreve 22500000 22500000

(300713175) (308547922) Add : Transferred to Miscellaneous Expenditure 300713175 308547922

Total..... 529863446 118970013

SCHEDULE - 3

SECURED LOANS

1 Term Loans from Banks 550098646 429551924 2 Working Capital Loans from Banks 69553684 172410232 3 Other Loan 1384660 1789677

Total..... 621036991 603751834

1

Term Loans are secured by first charge of fixed assets (through mortgage/hypothication of Immovable and Movable assets), both present and future; subject to prior charge in favour of bankers/othres on specified Assets for Working Capital loans/other loans and further secured by personal guarantee of Promoter Directors and Corporate guarantee of Promoter's Group Companies and also further secured by second charge on book debts and stocks.

2

Working Capital loans are secured by first charge on Book Debts and Stocks, and further secured by personal guarantee of the Promoter Directors and corporate guarantee of the Promoter's Group Companies and also further secured by second charges on fixed assets specified under point 1 as above.

SCHEDULE - 4

UNSECURED LOANS 1 From Banks Nil 33370757 2 Security Deposits 7199308 8484213 3 From Corporate Bodies 337396962 316590962 4 From others 54000 54000

Total.... 344650270 358499932

95

SCHEDULE - 5 : FIXED ASSETS

SR. NO. PARTICULARS

GROSS BLOCK DEPRICIATION NET BLOCK

AS AT ADDITION ADDITION DEDUCT

ION AS AT AS AT ADDITIONDEDUCTION AS AT AS AT AS AT

DURING DUE TO DURING DURING DURING

01/04/2009 THE YEAR REVALUATIONTHE

YEAR 31/03/2010 01/04/2009 THE

YEAR THE

YEAR 31/03/2010 31/03/2010 31/03/2009

AS ON

31/03/2010

1 Freehold Land 11493123 Nil 410893433 Nil 422386556 Nil Nil Nil Nil 422386556 11493123

2 Building 225527404 1084937 Nil Nil 226612341 63296758 7315639 Nil 70612397 155999944 162230646

3 Furniture & Fixtures 146576 Nil Nil Nil 146576 30316 9278 Nil 39594 106981 116260

4 Electrical Installation 250090141 1382029 Nil Nil 251472170 82572233 11895293 Nil 94467526 157004644 167517908

5 Computer 3260460 142984 Nil Nil 3403444 3031357 59738 Nil 3091095 312348 229103

6 Plant & Machinery 1507230614 84542905 Nil Nil 1591773519 1076423522 69461745 Nil 1145885266 445888253 430807093

7 Equipments 14174259 35377 Nil Nil 14209636 9639066 673860 Nil 10312926 3896710 4535193 8 Vehicle 6988839 716770 Nil 471349 7234260 3724187 663891 360188 4027890 3206370 3264652

S U B T O T A L 2018911416 87905002 410893433 471349 2517238502 1238717439 90079444 360188 1328436696 1188801805 780193977

9 Capital Work In Progress 10656990 15201999 Nil Nil 25858989 Nil Nil Nil Nil 25858989 10656990

S U B T O T A L 10656990 15201999 Nil Nil 25858989 Nil Nil Nil Nil 25858989 10656990

GRAND TOTAL 2029568406 103107001 410893433 471349 2543097491 1238717439 90079444 360188 1328436696 1214660794 790850967

PREVIOUS YEAR 2023895314 5673092 Nil Nil 2029568406 1140385608 98331832 Nil 1238717439 790850967 883509706

Note: On 31/03/2010 Company has revalued its Freehold Land by Rs.410893433/- based on the reoprt issued by the Registered Valuer.

96


31.03.2010 Rs.

As at 31.03.2009

Rs.

SCHEDULE - 6

INVESTMENTS


1 1 (Previous Year 1) Equity Shares of Reliance Natural Resources Ltd., of Rs. 5/- each fully paid-up

3

3 2 50 (Previous Year 50) Equity Shares of Century Enka

Ltd., of Rs. 10/- each fully paid-up 1890

1890 3 50 (Previous Year 50) Equity Shares of Garden Silk

Mills Ltd., of Rs. 10/- each fully paid-up 328

328 2221 2221


1 National Saving Certificate 10000 Nil

Total... 12221 2221


SCHEDULE - 7 INVENTORIES

1 Raw Materials 26254402 41458989 2 Stores, Spares and Fuel 37702697 32463236 3 Packing Materials 1054012 3344824 4 Work-In-Process 77007118 10425534 5 Finished Goods 29758568 1690385 6 Trading Stock Nil 4216338 7 Goods-in-Transit 14901584 4788132

Total... 186678381 98387438

SCHEDULE - 8 SUNDRY DEBTORS (Unsecured except reported at Note no 27 of Schedule 19)

Considered Good 1 Outstanding for a Period exceeding 6 Months Nil 5618650 2 Others 298084043 284305260



6346194 6870371

304430237 296794281 Less: Provision for Doubtful Debtors 6346194 6870371

Total.... 298084043 289923910

97

SCHEDULE - 9



- In Current Account 2633583 4026567 - In Fixed Deposit 12454353 10529854

15165920 14556420 3 Balance with Non Scheduled Bank in Current Accounts 2014 2014

Total.... 15167934 14762477 SCHEDULE - 10 LOANS AND ADVANCES (Unsecured)



35198896 37862653 2 Deposits 23981538 24031037 3 Advance to Staff 347409 Nil 4 Balance with Excise authority (Payable on Demand) 573263 347 5 Advance Tax and TDS 20860215 18581179

Less:Provision for Taxation (6931573) (6943810)

13928642 11637369

Total..... 74029748 73531407

SCHEDULE - 11 CURRENT LIABILITIES

1 Sundry Creditors 397093069 356517533 2 Book Overdraft 8910693 925456 3 Advance from Customers / Employees 984400 1746517 4 Unclaimed dividend 893428 897103

Total.... 407881590 360086608

SCHEDULE - 12 PROVISIONS

1 Proposed Dividend Nil Nil 2 Provision for Tax on Proposed Dividend Nil Nil

Total.... Nil Nil

SCHEDULE - 13 MISCELLANEOUS EXPENDITURE Preliminary & Pre Operative Expense

Balance as per last year 1216046 1152012 Add : Additions During The Year 19772 64034

1235818 1216046 Less: Preli. Exps. Written Off (1235818) Nil Nil

1216046 Profit & Loss Account


Total.... 300713175 309763968

98

SCHEDULE - 14 OTHER INCOME

1 Interest (TDS Rs. 322423/- Previous year Rs. 655218/)

1045343 2578044 2 Miscellaneous Balances Written off 590061 16500 3 Miscellaneous Income 6111557 384522 4 Dividend 3626 3297 5 Provision for Doubtful Debtors and Advances (Net) 551931 493988

Total.. 8302518 3476351 SCHEDULE - 15 INCREASE / (DECREASE) IN STOCK Closing Stock :

1. Finished Goods 29758568 5906723 2. Work-In-Process 77007118 10425534



16332257 87585191

Total.. 90433429 (71252934) SCHEDULE - 16 MATERIALS Raw Materials Consumed 1195164612 910102119 Purchase of Finished Goods 84442682 20971856

Total.. 1279607294 931073975 SCHEDULE - 17 PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

1 Salary and Wages 24941452 27045678 2 Contribution to P.F. and other funds 1056383 1136925 3 Staff and Labour Welfare 382819 1028445

Total.. 26380654 29211048

99

SCHEDULE - 18 OPERATIONAL, ADMINISTRATIVE AND SELLING EXPENSES

1 Stores and Spares Consumed 30205198 16411274 2 Power and Fuel Consumed 283380321 250837337 3 Packing Material Consumed 73331642 69197323 4 Freight,Cartage and Octroi 20271771 23021587 5 Insurance 3021820 3556152 6 Rent,Rates and Taxes 573623 533355 7 Vat Expense 88108265 72209613 8 Excise Duty Expenses 2531767 246445 9 Service Tax 496579 463677 10 Postage and Telephone Expenses 530712 634928 11 Stationery, Printing and Advertisement 721827 429962 12 Selling and Distribution Expenses 30499351 34002283 13 Travelling, Conveyance and Vehicle Expenses 2278043 2493137 14 Repairs and Maintenance :

(a) Plant 3170166 10176789 (b) Building 81324 Nil (c) Others 701939 1563271

3953429 11740060 15 Legal and Professional Exps. 4883927 2218264 16 Exchange Rate Difference Nil 2093800 17 Auditor's remuneration :

(a) Audit fees 150000 150000 (b) Tax Audit fees 25000 25000 (c) Taxation and Others 25000 25000 (d) Certification 204000 Nil

404000 200000 18 Miscellaneous Expenses 13397866 1816957 19 Loss on Sale of Fixed Asset 45161 Nil

Total ... 558635301 492106153

SCHEDULE - 19


1 Interest on Term Loans 46825914 50966015 2 Interest on Working Capital Loans 18986467 16001258 3 Bank and Other Charges 18395270 17689961 4 Interest to Others 6858224 5628486

Total ..... Total ... 91065874 90285720

100

SCHEDULE - 20

NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010


a. Basis of Accounting

The accounts are prepared on historical cost convention on an accrual basis and materially complies with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.



d. Inventories Inventories at year-end are valued at the lower of cost and net realizable value. The basis of determining

the cost for various categories of inventories is as follows: (v) In case of Raw Materials, Stores, Spares, Fuel and Packing Materials on FIFO basis. (vi) In case of Finished Goods and Work-In-Progress on FIFO basis.

e. Foreign Currency Transactions Transactions denominated in Foreign Currency are normally recorded at the exchange rate prevailing at the

time of transaction. Monetary items denominated in foreign currencies at the year are translated at the rate prevailing on the date of Balance Sheet. Exchange differences are dealt with in the Profit & Loss account.

f. Sales

Sales are accounted for on dispatch of goods to the customers and are inclusive of Excise Duty and Sales Tax but net of sales returns and trade discounts.

g. Investments

Long Term Investments are stated at its cost.


i. Taxation

i) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as

per the applicable provisions of the Income Tax Act, 1961. ii) Deferred Tax resulting from timing differences between book and tax profit is accounted for under the

liability method, at the current rates of tax, to the extent that the timing differences are expected to crystallize.

j. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

101

k. Impairment of Assets

The Management Periodically assesses using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes the an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.

l. Earning Per Share Basic earning per share is calculated by dividing net profit after tax for the year attributable to equity share holders of the company by the weighted average number of equity shares issued during the year. Diluted earning per share is calculated by dividing net profit attributable to equity share holders (after adjustment for diluted earnings) by average number of weighted equity shares outstanding during the year.

m. Employee Benefits

1. The employee and Company make monthly fixed Contribution to Government of India Employee’s Provident fund equal to a specified percentage of the covered employee’s salary, Provision for the same is made in the year in which service are rendered by the employees.

2. The Liability for Gratuity to employee, which is a defined benefit plan, is determined on the basis of

actuarial Valuation based on Projected Unit Credit method. Actuarial gain/Loss in respect of the same is charged to the profit and loss account.

3. Leave encashment benefit to eligible employee has been ascertained on actuarial basis and provided

for. Actuarial gain/loss in respect of the same is charged to the profit and loss account.

2. In terms of the scheme of arrangement under section 391 to 394 of the Companies Act,1956(“the Scheme”)between Nova Petrochemical Ltd and CIL-Nova Petrochemical Ltd (formerly known as Nova Poly Yarn Ltd),Nova Petrochemical re-organised and segregated by way of a demerger, its business inrespect of undertaking Unit II situated at Survey Number 391,395/4,396(Paiki) at Village Moraiya, Taluka Sanand, Dist. Ahmedabad engaged in yarn production & its allied activities to separate transferee company. All the assets and liabilities are transferred pursuant to approved order of the Hon’ble High Court of Gujarat dated 27th August,2009 and the appointed date as per the scheme is 1st April,2007.

As per the said scheme: In consideration of the demerger, the company issued and allotted 2,70,00,000 equity shares amounting to Rs.13,50,00,000/- 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 on equity share of Rs.10 each fully paid up held by the shareholders of Nova Petrochemicals Ltd.

3. CONTINGENT LIABILITIES: 2009-2010

Rs. (in Lacs) 2008-2009

Rs. (in Lacs)

a)

Letters of Credit Outstanding 1738.53 1956.06

b) Income Tax demands disputed in appeal by the Company/ Income Tax Authorities (Against which the Company has paid amount of Rs. 20.00 Lacs)

272.60 272.60

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

2905.28 2741.62

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

50.90 50.90

102

e) Service Tax demand disputed in appeal by the Company/Authority 33.48 Nil

f) Claims not acknowledged as debts by the company 1.13 1.13

g) Show Cause Notices received from various authorities (Against which the Company has paid amount of Rs. 400.00 Lacs)

65.85 158.66

h) Employees Demands pending before Labour Courts



4. 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).

5. Debtors include Rs. Nil Lacs (Previous Year Rs. Nil Lacs) due from private companies in which some of the

directors are interested as directors and Rs. Nil Lacs (Previous Year Rs. Nil Lacs) due from firms in which some of the directors are interested as partners.

6. Secured loans where repayments are stipulated include Rs. 499.02 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 of Rs.1.42 Lacs (Previous Year Rs. 1.98 Lacs).

9. Borrowing cost incurred during the year, which are attributable to the acquisition or construction of Qualifying

Assets to the extent of Rs. Nil (Previous Year Rs. Nil) are capitalized by the company.

10. Maximum debit balance in Non Schedule Bank during the year is Rs. 0.02 Lacs (Previous year Rs 0.04 Lacs).

11. Exceptional items consist of amount written back on account of restructuring / settlement of some of the loans and interest thereon Rs. 127.31 lacs ( Previous year Rs. Nil Lacs)

12. Particulars of Prior Period expense debited to respective head of expenditure:-

Particulars 31-03-2010 31-03-2009

(i) Raw Material Consumption 603,015 6,46,641 (ii) Payment to Employees (648) 2,98,258 (iii) Freight & Cartage 820,660 67,134 (iv) Rent Rates and Taxes (12598) (1,93,749) (v) Repairs & Maintenance Expense 68,190 8,64,562 (vi) Miscellaneous Expenses 266,999 98,473 (vii) Telephone Expense 1,529 Nil (viii) Legal & Professional Expense 117,052 2,70,725 (ix) Traveling Expense 19,909 81,115

Total . . . 1,884,108

21,33,159

103

13. The Disclosure requirement as required by Accounting Standard 15 “Employee Benefits” is as follows :-

Sr. No. Particulars

Gratuity (Funded)

Defined benefitObligation 31/03/10

Gratuity (Funded)


1. Employee Benefit Obligations The amounts (in Rs.) recognized in the balance sheet.

Present value of funded obligations 472,160 472,160 Fair value of plan assets 472,160 472,160 Present value of unfunded obligations 2,653,223 2,950,624 Unrecognized past service cost - - Net liability 2,653,223 2,950,624 Amounts in the balance sheet: - Liabilities 3,125,383 2,950,624 - Assets 472,160 - Net liability 2,653,223 2,950,624 2. The amounts (in Rs.) recognized in the statement of

profit and loss. Current service cost 489,780 762,793 Interest on obligation 282,380 231,091 Expected return on plan assets - (73,541) Net actuarial losses (gains) recognised in year (1,069,561) 340,820 Past service cost - Losses (gains) on curtailments and settlement - - Total, included in 'employee benefit expense' (297,401) 1,261,163 Actual return on plan assets 88,651 3. Changes in the present value of the defined benefit

obligation representing reconciliation of opening and closing balances thereof are as follows:

Opening defined benefit obligation as on 3,422,784 2,921,508 Service cost 489,780 762,793 Interest cost

3422784*8.25% 282,380 231,091 Actuarial losses (gains) - 355,930 Losses (gains) on curtailments (1,069,561) - Liabilities extinguished on settlement - - Liabilities assumed in an - - amalgamation in the nature of purchase - - Exchange differences on foreign plans - - Benefits paid - (848,538) Closing defined benefit obligation 3,125,383 3,422,784

104

4. Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

Opening fair value of plan assets 472,160 1,162,086 Expected return

0*0% - 73,541 Actuarial gains and (losses) - 15,110 Assets distributed on settlements - - Contributions by employer - 69,961 Assets acquired in an amalgamation - - In the nature of purchase - - Exchange differences on foreign plans - - Benefits paid - (848,538) closing balance of fair value of plan assets - 472,160 5. The major categories of plan assets as a percentage

of total plan assets are as follows: Government of India Securities 0.00% 0.00% High quality corporate bonds 0.00% 0.00% Equity shares of listed companies 0.00% 0.00% Property 0.00% 0.00% Policy of Insurance 100.00% 100.00% Bank Balance 0.00% - 6. Principal actuarial assumptions at the balance sheet

date (expressed as weighted averages) : Discount rate 8.25% 7.91% Expected return on plan assets 0.00% 9.00% Proportion of employees opting for early retirement - - Annual increase in Salary costs 6.00% 6.00% The estimates of future salary increase, considered in

actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

7. Amount for the current period. Defined benefit obligation 3,125,383 3,422,784 Plan assets 472,160 472,160 Surplus/(deficit) (2,653,223) (29,50,624) Experience adjustments on plan Liabilities (1,069,561) - Experience adjustments on plan assets - - 8. Movement in net liability recognised in Balance

Sheet. Net opening liability 2,950,624 1,759,422 P&L Charge (297,401) 1,261,163 Contribution paid - (69,961) closing net liability 2,653,223 2,950,624

105

9. Transitional Liability D.B.O. As on 1-4-2008 - 4,039,137

Market value of Investment as on 1-4-2008 -

(1,763,846) Provision in books of Accounts maintained under the

Accounting Standard. - (2,218,969) transitional liability (assets) as on 1-4-2008 - 56,322 Note - Transitional liability (assets) as on 1-4-2008 Is worked

out on the basis of discount rate -

8.50 14. The Disclosure requirement as required by Accounting Standard 15 of “Leave Encashment” is as follows :-

Sr. No. Particulars




Defined benefitObligation

31/03/09 1. Employee Benefit Obligations

The amounts (in Rs.) recognized in the balance sheet.

Present value of funded obligations - - Fair value of plan assets - - Present value of unfunded obligations 779,516 1,526,442 Unrecognized past service cost - - Net liability (Asset) 779,516 1,526,442 Amounts in the balance sheet: - Liabilities 779,516 1,526,442 - Assets - - Net liability 779,516 1,526,442 2. The amounts recognized in the statement of profit

and loss are as follows. Current service cost 282,865 664,937 Interest on obligation

1526442*8.25% 125,931 69,819 Expected return on plan assets - - Net actuarial losses (gains) recognised in year (1,155,722) (90,986) Past service cost Losses (gains) on curtailments and settlement - - Total, included in 'employee benefit expense' (746,926) 643,770 Actual return on plan assets

106

3. Changes in the present value of the defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows.

Opening defined benefit obligation 1,526,442 882,672 Service cost 282,865 664,937 Interest cost

1526442*8.25% 125,931 69,819 Actuarial losses (gains) (1,155,722) (90,986) Losses (gains) on curtailments - - Liabilities extinguished on settlement - - Liabilities assumed in an - - amalgamation in the nature of purchase - - Exchange differences on foreign plans - - Benefits paid - - Closing defined benefit obligation 779,516 1,526,442 4. Changes in the fair value of plan assets representing


Opening fair value of plan assets - - Expected return - - Actuarial gains and (losses) - - Assets distributed on settlements - - Contributions by employer - - Assets acquired in an amalgamation - - In the nature of purchase - - Exchange differences on foreign plans - - Benefits paid - - closing balance of fair value of plan assets - - 5. The major categories of plan assets as a percentage

of total plan assets. Government of India Securities 0.00% 0.00% High quality corporate bonds 0.00% 0.00% Equity shares of listed companies 0.00% 0.00% Property 0.00% 0.00% Policy of Insurance 0.00% 0.00% Bank balance 0.00% 0.00%

107

6. Principal actuarial assumptions at the balance sheet date (expressed as weighted averages) :

Discount rate 8.25% 7.91% Expected return on plan assets 0.00% 0.00% Proportion of employees opting for early retirement - - Annual increase in Salary costs 6.00% 6.00% The estimates of future salary increase, considered in

actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

- -

7. Amount for the current period. Defined benefit obligation 779,516 1,526,442 Plan assets - - Surplus/(deficit) (779,516) (1,526,442) Experience adjustments on plan Liabilities (1,141,851) - Experience adjustments on plan assets - -8. Movement in net liability recognised in Balance

Sheet. Net opening liability 1,526,442 882,672 P&L Charge (746,926) 643,770 Contribution paid - - closing net liability 779,516 1,526,442 9. Transitional Liability

D.B.O. As on 1-4-2008 - 878,483 Market value of Investment as on 1-4-2008 - - Provision in books of Accounts maintained under the

Accounting Standard. - (1,484,175) transitional liability (assets) as on 1-4-2008 - (605,692) Note Transitional liability (assets) as on 1-4-2008 Is worked

out on the basis of discount rate - 8.50 15. 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.


Particulars 31-03-2010 31-03-2009 Numerator used for calculating Basic and Diluted Earning Per Share (Profit After Tax)

78,34,748 (9,39,75,151)

Nominal Value per Share 5 5 Weighted Average No. of Shares used as denominator for calculating Basic and Diluted Earning Per Share

27100000 27100000*

Basic and Diluted earning per share 0.29 (3.47)

*Note: Due 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 on 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.

108


g) Key Management Personnel Sr. No. Name Designation

1 Shri Jyotiprasad Chiripal Chairman 2 Shri Vedprakash Chiripal Director

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

Sr. No. Name

1 Chiripal Industries Ltd. 2 Deepak Enterprise 3 Gupta Dying and Printing Mills 4 Gupta Dying and Printing Mills Pvt. Ltd. 5 Gupta Synthetics Limited 6 Gupta Silk Mills Pvt. Ltd. 7 Nandan Exim Ltd. 8 Shanti Exports Pvt. Ltd. 9 Vishal Fabrics Pvt. Ltd.

10 NPL Power Pvt. Ltd. 11 GSL-Nova Pertochemicals Limited

i) Details of Transactions with Key Management Personnel and Related Parties of the Key Management Personnel are as follows:

(Rs. in Lacs)


Key Management

Personnel


Relatives of Key Management

Personnel Total

1 Unsecured Loans Taken during the year NIL 1.00 NIL NIL

(NIL) (2388.39) (NIL) (2388.39) Balance as at Balance Sheet Date Nil 1114.42 NIL 1114.42

(NIL) (1194.42) (NIL) (1194.42) 2 Advances Recoverable in Cash

or Kind

Given during the year NIL 941.60 NIL 941.60 (NIL) (NIL) (NIL) (NIL)

Balance as at Balance Sheet Date NIL NIL NIL NIL (NIL) (NIL) (NIL) (NIL)

3 Advances Received from

Customers

Received during the year NIL 234.03 NIL 234.03 (NIL) (NIL) (NIL) (NIL) Balance as at Balance Sheet Date NIL 234.03 NIL 234.03 (NIL) (6.93) (NIL) (6.93) 4 Expenditure Purchase of Goods, Packing

Material and Stores NIL 2506.88 NIL 2506.88

(NIL) (1447.47) (NIL) (1447.47) Jobwork Charges NIL 209.31 NIL 209.31 (NIL) (388.23) (NIL) (388.23) Purchase of Fix Asset NIL 770.40 NIL 770.40 (NIL) (NIL) (NIL) (NIL)

109

5 Income Received Power & Fuel Income NIL 1315.91 NIL 1315.91 (NIL) (1263.46) (NIL) (1263.46) Jobwork Income NIL 426.75 NIL 426.75

(NIL) (166.84) (NIL) (166.84) 6 Stock in trade Sold / Redeemed during the year NIL 574.34 NIL 574.34


(NIL) (630.36) (NIL) (630.36) 7 Other Transactions Payment received on behalf of

others NIL Nil NIL Nil

(NIL) (1.08) (NIL) (1.08) Payment made on their behalf NIL 327.12 NIL 327.12

(NIL) (0.02) (NIL) (0.02)

Note :List of transaction, out of the transactions reported in the above table, where the transactions entered in to with single party exceed the 10% of the total related Party transactions of similar nature are as under :

11. Unsecured Loan Rs. In Lacs Taken :- ----------------

- Chiripal Industies Ltd. 1.00 (2375.30) 12. Advance Recoverable in cash or Kind Given :-

- Chiripal Industies Ltd. 941.60 (Nil) 13. Advance Received from Customer Advance Received:-

- Chiripal Industies Ltd. 234.02 (6.93) 14. Expenditure :-

Purchase of Goods, Packing Material and Stores :- - Chiripal Industies Ltd 2496.36 (1405.19)


(388.23) Purchase of Fix Asset :-

- Chiripal Industies Ltd 770.40 (NIL)

15. Income Received :- Power & Fuel Income:

- GSL-Nova Petrochemicals Ltd. 1315.91 (1263.46)

Jobwork Income: - Chiripal Industries Ltd. 426.75 (166.84)

16. Stock in trade :- Sold / Redeemed during the year

- Chiripal Industries Ltd. 574.01 (373.26)

110

17. Other Transaction :-

Payment made on behalf of Others - GSL-Nova Petrochemicals Ltd. 327.12 (0.02)

18. 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.

19. Impairment of Asset

During the year, the company has impaired its assets to the tune of Rs. Nil (Previous Year Rs.Nil)


Credited to Profit and Loss Account Rs. 18.51 Lacs (Previous Year Debited to Profit & Loss Account Rs. 20.94 Lacs)

21. The Gross Block of Fixed Asset includes Rs.4108.93 Lacs (Previous Year Rs.Nil Lacs) on account of revaluation of Freehold Land Carried out on 31/03/2010.

22. 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.

e) Sundry Creditors include Rs.64.98 Lacs (Previous year Rs. 48.75 Lacs) due to Small Scale and ancillary concerns.

f) 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: Akar Packers Pvt. Ltd., Akshat Trader, Anushree Paper Packs Pvt. Ltd., Arjun Packaging, Balaji Polymers, Flexi Bond Industries, Fortune Fabrics Pvt Ltd, Nirmal Packaging,Nirmal Tube & Containers Pvt. Ltd, Pooja Plastic Ind.,Pooja Paper Craft, Rajhans Traders.

23. Balance in Current Account with Scheduled Banks includes Rs. 5.61Lacs (Previous Year Rs. 5.61 Lacs) in the

unpaid dividend account with various banks.

24. 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 has been not given.

25. Sundry Debtors are Secured to the extent of Rs. 71.99 Lacs (Previous Year Rs. 7.50 Lacs)

26. Information pursuant to provision of paragraphs 3 and 4 of part II of Schedule VI Companies Act, 1956. (As

certified by Directors):

u) Licensed & Installed Capacity : Sr. No. Product Name Licensed Capacity Installed Capacity


License is not required 18325 Tons p.a. (License is not required) 15085 Tons p.a.

2 Polyester Texturised Yarn License is not required 3011 Tons p.a. (License is not required) 3011 Tons p.a.

3 Draw Twisted Yarn License is not required 3282 Tons p.a. (License is not required) 3282 Tons p.a.

4 Fully Draw Yarn License is not required 14412 Tons p.a. (License is not required) 11532 Tons p.a.

111

v) Opening Stock & Closing Stock of Finished Goods



Quantity Amount



Kg. 58775 15,45,032 213418 1,28,78,513

(61368) (27,13,743) (58775) (15,45,032)

2 Polyester Texturised

Yarn Kg. 14023 13,44,286 2683 2,47,942 (35150) (27,41,784) (14023) (13,44,286)

3 Draw Twisted Yarn Kg. 13493 14,05,984 31690 34,94,175

(36636) (35,16,470) (13493) (14,05,984) 4 Fully Draw Yarn Kg. 21400 16,11,421 140893 1,31,37,938

(57912) (46,93,208) (21400) (16,11,421) 5 Cloth Mtr. Nil Nil Nil Nil (33176) (42,16,338) (Nil) (Nil)

Total . . . 59,06,723 2,97,58,568 (1,78,81,543) (59,06,723)

w) Production meant for Sale


Quantity 1 Partially Oriented Polyester Filament Yarn (POY) Kg. 10145693

(4958250) 2 Polyester Texturised Yarn Kg. 213977

(1329101) 3 Draw Twisted Yarn Kg. 1996729

(2469176) 4 Fully Draw Yarn Kg. 8429828

(7944631) 5 Polyester Chips Kg Nil

(252300) x) Purchase of Finished Goods


Quantity Amount

1 Cloth Mtr. Nil Nil (143881) (55,62,958)

2 Polyester Chips 1038652 5,37,95,886 (91767) (49,00,978)

3 Partially Oriented Polyester Filament Yarn (POY) Kg 387548 3,06,46,836 (Nil) (Nil)

4 Draw Twisted Yarn Kg Nil Nil (97641) (1,05,07,920)

1426200 8,44,42,682 Total . . . (17525371) (2,09,71,855)

y) Sales Sr. No. Product Unit

Quantity Amount

1 Partially Oriented Polyester Filament Yarn (POY) Kg. 10378598 75,77,73,630 (4960843) (31,86,27,969)

2 Polyester Texturised Yarn Kg. 228000 2,24,43,484 (1350228) (12,07,78,958)

3 Draw Twisted Yarn Kg. 1978532 23,05,87,386 (2589960) (31,65,37,543)

112


Quantity Amount

4 Fully Draw Yarn Kg. 8310335 81,44,51,075 (7981142) (78,40,31,680)

5 Chips Kg 1038652 5,59,33,380 (344067) (1,87,93,296)

6 Cloth Mtr. Nil Nil (177057) (93,22,422)

7 Others (including Job Charges & Power & Fuel Income) 18,14,93,927

- (15,26,61,864) Total . . . 21934117 2,06,26,82,882

(17403294) (1,72,07,53,732)

z) Consumption of Raw Materials


Amount

1 Polyester Chips 16609317 88,52,83,793(9620841) (52,07,81,151)

2 Pure Terephthalic Acid (PTA) 3663570 15,74,11,596 (5883898) (23,54,84,074)

3 Mono Ethylene Glycol (MEG) 1455650 5,31,17,609 (2308136) (9,18,60,104)

4 Others 9,93,51,614 - (6,19,76,790)

Total . . . 21728537 1,19,51,64,612 (17812875) (91,01,02,119)


aa) Value of Imported & Indigenous Raw Materials, Stores and Spare Parts Consumed and Percentage

thereof to the Total Consumption:

Sr. No. Particulars Imported Indigenous Total

1 Raw Materials Consumed: Value Rs. 32,90,413 1,19,18,74,199 1,19,51,64,612 (Nil) (91,01,02,119) (91,01,02,119)

Percentage 0.28% 99.72% 100% (0%) (100%) (100%)

2 Stores & Spares Consumed Value Rs. 8,44,039 2,93,61,159 3,02,05,198

(Nil) (1,64,11,274) (1,64,11,274)

Percentage 2.79% 97.21% 100% (0%) (100%) (100%)

113

bb) C.I.F. Value of Imports

Sr. No. Particulars Amount

(Rs.) 1 Capital Goods 1,29,946

(Nil) 2 Raw Materials 32,90,413

(Nil)

3 Stores and Spares 8,44,039 (Nil)

4 Purchase of Trading Goods 2,27,06,375 (Nil)

cc) Expenditure in Foreign Exchange


(Rs.) 1 Foreign Traveling Nil

(Nil)

2 Interest and Bank Charges Nil (Nil)

dd) Earning in Foreign Exchange:


(Rs.) 1 FOB Value of Exports Nil

(Nil)

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

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

29. 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. Signature to Schedules "1" to "20" As per our report of even date attached herewith

FOR, CIL NOVA PETROCHEMICALS LIMITED FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS ___________ _____________ Chairman Director (J T SHAH) PARTNER Co. Secretary PLACE : AHMEDABAD DATE : 07.08.2010

114

SECTION X

LATEST OPENING FINANCIAL STATEMENT AS ON 01.10.2009 of CIL Nova Petrochemicals Limited (Formerly Nova Polyyarn Limited) after giving effect of demerger scheme are as follows:

Provisional Balance Sheet (Opening) as at 01.10.2009


As at 30.09.2009

Rs. SOURCES OF FUNDS

1 Shareholders' Funds : (a) Share Capital 1 135500000

(b) Share Application Money 414000 (cb) Reserves and Surplus 2 Nil

1359140002 Loan Funds :

(a) Secured Loans 3 639140269 (b) Unsecured Loans 4 575236649

1214376918

3 Deferred Tax Liability (Net) NilTotal..... 1350290918


1 Fixed Assets : 5 (a) Gross Block 2062215330 (b) Less : Depreciation 1306966541

Net Block 755248789Add: Capital Work in Progress 5331673

2 Investments : 6 2221

3 Current Assets, Loans and Advances (a) Inventories 7 153488060 (b) Sundry Debtors 8 365427300 (c) Cash and Bank Balances 9 16434416 (d) Loans and Advances 10 301050918

836400694 4 Less :Current Liabilities and Provisions

(a) Current Liabilities 11 429295150 (b) Provisions 12 6931574

436226724 Net Current Assets 400173970

5 Miscellaneous Expenditure (to the Extent not W/off or adjusted) 13 189534265

Total..... 1350290918

115

SECTION XI

DETAILS OF OTHER GROUP COMPANIES INCLUDING THEIR CAPITAL STRUCTURE AND FINANCIAL STATEMENTS

1. NANDAN EXIM LIMITED

Capital structure as on 31.03.2011: Authorised:




Paid-up:


Financial Highlights:

The Audited financial highlights for the last 3 years are as follows:

(Rs. In Millions)

Share Price Information

The Equity shares of NEL are listed on BSE and NSE.

The high and low of the market price of the equity shares of NEL having a face value of Re. 1/- each on BSE year-wise for the last three years are as follows:

Scrip Code: 532641 For the Period: From year 2009 to year 2011

Particulars For the Fiscal Year 2010 2009 2008 Share Capital 455.49 455.49 455.49 Reserves (excluding Revaluation reserve) 825.39 709.62 719.19 Sales 375.83 3214.40 2891.14 Profit After Tax 115.76 (14.02) 64.92 Earnings Per Share 0.25 (0.03) (0.17) Net Asset Value at the face value of Re. 1 per share 2.81 2.55 2.58

Year Open Price

High Price

Low Price

Close Price

No. of Shares

No. of Trades

Total Turnover (Rs.)

* Spread (Rs.)

H-L C-O

2009 1.10 2.78 0.80 2.26 11,69,45,168 47,256 22,88,18,744 1.98 1.16

2010 2.32 3.46 1.86 2.45 14,47,75,507 44,019 37,22,89,568 1.60 0.13

2011 2.49 2.59 1.75 2.00 2,81,81,438 3,597 5,71,56,947 0.84 -0.49

116

GROUP COMPANIES SHAREHOLDING PATTERN

1. NANDAN EXIM LIMITED

(I)(a) Statement showing Shareholding Pattern

Name of the Company: NANDAN EXIM LIMITED Scrip Code, Name of the scrip, class of security: 532641 - NANDAN - EQUITY Quarter ended: 31.03.2011

Partly paid-up shares:- No. of partly paid-up shares As a % of total no. of partly paid-up shares

As a % of total no. of shares of the

company Held by Promoter / Promoters Group 0 0.00 0.00

Held by public 0 0.00 0.00

Total 0 0.00 0.00

Outstanding convertible securities:- No. of outstanding securities As a % of total No. of

outstanding convertible securities


company, assuming full conversion of the convertible securities

Held by Promoter / Promoters Group 0 0.00 0.00


Total 0 0.00 0.00

Warrants:- No. of warrants As a % of total no. of warrants


company, assuming full conversion of

warrants Held by Promoter / Promoters Group 0 0.00 0.00


Total 0 0.00 0.00 Total paid-up capital of the company assuming full conversion of warrants and convertible securities Face Value 1.00

Category Category of shareholder

Number of Total number

Number of shares

Total shareholding

as a percentage

Shares pledged or

code shareholders of shares held in

of total number of shares

otherwise encumbered

dematerialised As a As a Number of As a

form percent

age percentage

of shares percen

tage

of

(A+B) (A+B+C) (IX) =

(I) (II) (III) (IV) (V) (VI) (VII) (VIII)

(VIII)/ (IV)*10

0 (A) Shareholding of Promoter

and Promoter Group

1 Indian (a) Individuals/Hindu Undivided

Family 16 135,941,866 135,941,866 29.85 29.85 130,718,020 96.16 (b) Central Government/State

Government(s) 0 0 0 0.00 0.00 0 0.00 (c) Bodies Corporate 4 109,460,522 109,460,522 24.03 24.03 69,227,358 63.24 (d) Financial Institutions / Banks 0 0 0 0.00 0.00 0 0.00 (e) Any Other (specify) 0 0 0 0.00 0.00 0 0.00 Sub Total (A)(1) 20 245,402,388 245,402,388 53.88 53.88 199,945,378 81.48

117

2 Foreign (a) Individuals (Non-Resident

Individuals/Foreign Individuals) 0 0 0 0.00 0.00 0 0.00

(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00 (c) Institutions 0 0 0 0.00 0.00 0 0.00 (d) Any Other (specify) 0 0 0 0.00 0.00 0 0.00

Sub Total (A)(2) 0 0 0 0.00 0.00 0 0.00

Total Shareholding of Promoter and Promoter Group (A)=(A)(1)+(A)(2) 20 245402388 245402388 53.88 53.88 199945378 81.48


1 Institutions (a) Mutual Funds/UTI 0 0 0 0.00 0.00 (b) Financial Institutions / Banks 0 0 0 0.00 0.00 (c) Central Government/State

Government(s) 0 0 0 0.00 0.00 (d) Venture Capital Funds 0 0 0 0.00 0.00 (e) Insurance Companies 0 0 0 0.00 0.00 (f) Foreign Institutional Investors 0 0 0 0.00 0.00 (g) Foreign Venture Capital

Investors 0 0 0 0.00 0.00 (h) Any Other (specify) 0 0 0 0.00 0.00

Sub Total (B) (1) 0 0 0 0.00 0.00

2 Non-institutions (a) Bodies Corporate 692 42,685,628 42,685,628 9.37 9.37 (b) i) Individuals - shareholders

holding nominal share capital up to Rs 1 Lakh 49,357 79,823,778 79,690,364 17.52 17.52

ii) Individual shareholders holding nominal share capital in excess of Rs. 1 Lakh 2,197 85,754,998 85,721,998 18.83 18.83

(c) Non Residents

i NRI Rep 178 1,326,820 1,326,820 0.29 0.29 ii NRI Non -Rept 40 496,952 496,952 0.11 0.11 iii OCB 0 0 0 0.00 0.00 iv Foreign Bodies 0 0 0 0.00 0.00 v Foreign National 0 0 0 0.00 0.00 vi Any Other 0 0 0 0.00 0.00

Sub Total (B)(2) 52,464 210,088,176 209,921,762 46.12 46.12

Total Public Shareholding (B)=(B)(1)+(B)(2) 52,464 210,088,176 209,921,762 46.12 46.12 N.A N.A

Total (A)+(B) 52,484 455,490,564 455,324,150 100.00 100.00 (C) Shares held by custodians

and against which Depository Receipts have been issued 0

i Promoter and Promoter Group 0 0 0 xxxx 0.00 N.A N.A

ii

Public 0 0 0 xxxx 0.00 N.A N.A

Total Shares held by custodians and against which Depository Receipts have been issued 0 0 0 0.00 0.00 N.A N.A

GRAND TOTAL (A)+(B)+(C) 52,484 455,490,564 455,324,150 xxxx 100.00 199,945,378 43.90

118

2. CHIRIPAL INDUSTRIES LIMITED Capital structure as on 31.03.2011: Authorised: Rs.




Paid-up:


Financial Highlights


(Rs. In Millions)

Share capital structure of Chiripal Industries Limited as on 31.03.2011

Shareholding Pattern as on 31.03.2011

Name of shareholder

Number of shares

Percentage holding (%)

PROMOTER GROUP

1. PROMOTERS 93,87,750 42.06%

2. RELATIVES OF PROMOTERS 62,79,925 28.14%

3. BODY CORPORATE 27,82,250 12.46%

4. EMPLOYEES - -

5. PUBLIC 38,69,875 17.34%

TOTAL 2,23,19,800 100%

Particulars For the Fiscal Year 2010 2009 2008 Share Capital 207.83 207.83 207.83Reserves (excluding Revaluation reserve) 12365.40 10750.75 947.39Sales 5702.25 4784.72 4615.37Profit After Tax 179.90 145.44 45.87Earnings Per Share 7.77 7.01 2.21Net Asset Value at the face value of Re. 1 per share 69.50 61.73 64.80

119

3. VISHAL FABRICS PRIVATE LIMITED Capital structure as on 31.03.2011: Authorised: Rs.

115000 Equity Shares of Rs. 100/- each 11500000


115000 Equity Shares of Rs. 100/- each fully paid-up 11500000

Paid-up:

115000 Equity Shares of Rs. 100/- each fully paid-up 11500000

Financial Highlights


(Rs. In Millions)

Share capital structure of Vishal Fabrics Private Limited as on 31.03.2011

Shareholding Pattern as on 31.03.2011

Sr. No Share / Debenture

Holder Name Number of Shares/ Debenture Held

Amt. per share

1 CHIRIPAL SAVITRIDEVI 400 100 2 CHIRIPAL URMILADEVI 300 100 3 CHIRIPAL MANJUDEVI 300 100 4 CHIRIPAL PRITIDEVI 3700 100 5 AGARWAL SHIVANI 900 100 6 CHIRIPAL VISHAL 400 100 7 AGARWAL PRIYANKA 500 100 8 AGARWAL NISHI 900 100 9 AGARWAL SHALOO 600 100 10 DEEPAK J. CHIRIPAL 300 100 11 VEDPRAKASH

BRIJMOHAN – HUF 300 100

12 AGARWAL RONAK 300 100 13 CHIRIPAL INDUSTRIES

LIMITED 106100 100

TOTAL 115000

Particulars For the Fiscal Year 2010 2009 2008 Share Capital 11.5 11.5 11.5Reserves (excluding Revaluation reserve) 320.71 286.47 253.85Sales 1380.56 1346.88 1377.46Profit After Tax 39.83 33.09 40.86Earnings Per Share 297.64 287.75 355.34

Net Asset Value at face value of Re. 100 per share / B.V. 2888.75 2591.04 2307.39

120

SECTION XI

OUTSTANDING LITIGATION, MATERIAL DEVELOPMENTS AND OTHER DISCLOSURES:

There are no outstanding litigations, suits or civil or criminal prosecution against our Company, our Directors, or any disputes, tax liabilities, non-payment of statutory dues, overdues to banks/ financial institutions, defaults against banks/ financial institutions, defaults in dues towards instrument holders like debenture-holders, fixed deposits, bonds and arrears on cumulative preference shares issued by our Company, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Companies Act) against our Company, our Directors and our Promoters, except as described below. Further, our Directors and Promoters have not been declared as willful defaulter by the Reserve Bank of India and also have not been debarred from dealing in securities and/ or accessing the capital markets by SEBI and no disciplinary action has been taken against them by SEBI except as described below:

OUTSTANDING LITIGATIONS:

There are no outstanding material litigations against or any disputes, tax liabilities, non payment of statutory dues, overdue to banks/ financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits and arrears on cumulative preference shares issued by the Company, defaults in creation of full security as per terms of issue / other liabilities, proceedings initiated for economic / civil / any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII of the Companies Act, 1956) against the Company, its Directors, its Promoters and the Group Companies, except the following as per the Scheme:-

(a) Upon the coming into effect of this Scheme, all legal, taxation or other proceedings, whether civil or criminal, (including before any statutory or quasi-judicial authority or tribunal) by or against the Demerged Company and / or Resulting Company and / or demerged undertaking under any statute, pending on the Appointed Date and / or related to the period earlier than appointed date which may be instituted any time thereafter and in each such case, both the Companies shall be jointly and equally responsible or liable in relation to any such legal or other proceedings. If warranted, both the Companies shall jointly continue and enforce such proceedings after the Effective Date. The Resulting Company / Demerged Company, as applicable, shall be added as party to such proceedings and shall jointly prosecute or defend such proceedings. Similarly, financial liability / demand if any raised by such statutory or quasi-judicial authority or tribunal would be shared equally by both the Companies. A list of the legal, taxation and other cases/proceedings by or against the Demerged Company including relating to the Demerged Undertaking pending as on the date of filing this Scheme has been separately agreed between the Demerged Company and the Resulting Company.

(b) However, If proceedings are taken against the Demerged Company in respect of the matters referred to in sub-clause (a) above, it shall defend the same in accordance with the advice of the Resulting Company.

(c) However, If proceedings are taken against the Resulting Company in respect of the matters referred to in sub-clause (a) above, it shall defend the same in accordance with the advice of the Demerged Company.

Both companies shall make relevant applications in that behalf.

(d) However any proceeding whether civil or criminal by or against the Resulting Company under any statute, which may be instituted at any time after appointed date and related to the period after the appointed date, in each such case, the said proceeding shall be continued and enforced by or against the Resulting Company after the Effective Date, which shall keep the Demerged Company fully indemnified in that behalf. The Demerged Company shall in no event be responsible or liable in relation to any such legal or other proceeding against the Resulting Company.

The GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) has to file a reference before BIFR under the provisions of SICA Act 1985 on the basis of erosion of Net Worth of the Company as on adoption of audited accounts as at 31.03.2009. the Board for Industrial and Financial Reconstruction vide Order dated December 8, 2009 in case no. 37/2009 dismissed the reference as not maintainable as the relevant annual accounts of the financial year ending March 2009 had become unreliable and had to be altered substantially. Since the company had demerged by the order by the order of the high court of Gujarat dated 27th August, 2009.

121

Litigations of Nova Petrochemicals Limited Litigations against Nova Petrochemicals Ltd.

SEBI matter

Sr. No. Foru

m Case No.

Parties to proceedings

Brief particulars

Quantum (Rs.

approx.) Current Status

1. Securities and Exchange Board of India

Letter 2007 dated 18th October, 2007, from the Securities and Exchange Board of India, Investigation Department, vide their Ref. No. IVD / ID6 /BM /MR/NPL /106527/in connection with the investigation in the case of Nova Petrochemicals Ltd.

Securities and Exchange Board of India Vs. Nova Petrochemicals Limited

The Securities and Exchange Board of India issued a letter dated 18th October, 2007, seeking certain information / explanation / documents from the Company pursuant to the investigation into trading in the script of Nova Petrochemicals Ltd for the period 28.11.2005 to 14.12.2005. Nova Petrochemicals Limited has replied to the abovementioned letter, by their letter dated 29.10.07, giving the information / explanation / documents as desired and required by the Securities and Exchange Board of India. The Company has replied to clarifications sought by SEBI through various letters subsequent to the letter dated 18.10.07

- -

2. Securities and Exchange Board of India

Show Cause Notice Dated 01.06.2009 bearing ref no. IVD / ID6 / BM /MR/NPL /165104 under section 11, 11B, 11(4) of the SEBI Act (1992), read with regulation 11 of SEBI (Prohibition of Fraudulent and unfair trade practices relating to the Securities Market) Regulations, 2003

Securities and Exchange Board of India Vs. Nova Petrochemicals Limited

A show cause notice bearing no. IVD / ID6 / BM /MR/NPL /165104 dated 01.06.2009 was issued by SEBI under section 11, 11B, 11(4) of the SEBI Act (1992), read with regulation 11 of SEBI (Prohibition of Fraudulent and unfair trade practices relating to the Securities Market) Regulations, 2003 to NPL. The notice alleged that the company, by making misleading announcements, lured the gullible investors to invest in the scrip, and aided and abetted company related entities to offload shares in the market and thus violated section 12A of SEBI Act 1192, read with regulation 3 (c), 3(d), 4(1), 4(2)(k) and (r) of SEBI (Prohibition of Fraudulent and unfair trade practices relating to the Securities Market) Regulations, 2003 and thereby calling upon the company to show cause as to why suitable directions including direction of restraining the company from accessing the securities market for a specified period of time inder section 11, 11(B) and 11(4) of SEBI Act (1992), read with regulation 11 of SEBI (Prohibition of Fraudulent and unfair trade practices relating to the Securities Market) Regulations, 2003. Thereafter SEBI issued an order bearing no. WTM/PS/34/IVD/ID-4 /JAN/10 dated 12.01.2010 wherein, under the powers conferred by sections 19, read with Sections 11, 11B of the SEBI Act 1992, and Regulatin 11 of SEBI (Prohibition of Fraudulent and unfair trade practices relating to the Securities Market) Regulations, 200, restrained the company from buying, selling and dealing or accessing the securities market directly or indirectly, in any manner, whatsoever, for a period of 2 years from the date of the captioned order.

- Pursuant to an appeal filed by CIL Nova Petrochemical s Limited alongwith GSL Nova Petrochemicals Limited against the capitoned order, Securities Appellate Tribunal (“SAT”) vide its order dated January 27, 2010 has directed that the case shall come up for disposal on February 26, 2010 and in the meanwhile, the operation of the impugned order will remain stayed.

122

Sr. No.

Forum Case No.


Brief particulars Quantu m (Rs.

approx.)

Current Status

3. Securities and exchange Board of India

- SEBI Vs. Nova Petrochemicals Limited (Persons Acting in Concert)

SEBI issued notice dated September 10, 2009, bearing no. A&E/MK/IVD/NPL/176449/20 09 to Nova Petrochemicals Limited, under Rule 4 of SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995. The matter is under adjudication from SEBI to inquire into and adjudge under Section 15I read with 15A(b) of the SEBI Act, 1992 for the alleged irregularity in the trading in the shares of Nova Petrochemicals Limited, resulting in the possible violation of the provisions of the Securities and Exchange Board of India Act, 1992 and SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. The notice inter alia stated that Nova Petrochemicals Limited made a misleading announcement on February 20, 2006 pertaining to expansion plan after which the price of the scrip went up from Rs. 102.50 on February 20, 2006 to Rs. 146.85 on March 8, 2006 and the volume increased substantially. It was alleged that when the company was making misleading announcements and non-genuine results, 25 PACs of the company sold together 10,15,443 shares through Religare and SP Jain Securities which accounted for 12.80% of the traded volume (both BSE and NSE) during January 23, 2006 to March 31, 2006. It was alleged that during the investigation period, the holding of the PACs reduced substantially and therefore information was sought on the acquisition and trading details, bank statements, disclosures, etc of made by the PACs to the company and exchange under SEBI (SAST) Regulations, 1997 from the PACs. The company sought time on behalf of all 25 PACs, for the same. It was further alleged that Nova Petrochemicals Limited had not made disclosure to the BSE and NSE for change in holding of the PACs and had failed to comply Regulation 8 (3) of SEBI (SAST) Regulations. Nova Petrochemicals Limited also did not give an explanation to the exchanges for the substantial difference between the unaudited and audited results of the company. It was alleged that Nova Petrochemicals Limited failed to submit information / clarification, gave wrong information to SEBI inspite of ample opportunities being given and hence did not cooperate during the investigation. It was further stated that the investigation revealed that Nova Petrochemicals Limited showed profit in three quarters of 200506 while the yearly results of 2006 showed loss for which company could not give reasonable explanation. It was observed from the documents submitted by Nova Petrochemicals Limited for disclosure pertaining to the Reniwal group that the disclosure so made was not pertaining to the Reniwal

- The matter relating to SCN for adjudication against Nova Petrochemicals Ltd is pending for appropriate order from SEBI after consent procedure and personal appearance opted by the Company. Further, the SCN issued to the Chairmna of Nova Petrochemicals Ltd is pending for appropriate order from SEBI after consent procedure and personal appearance opted by the Company. Further, the matter relating to SCN issued to 21 PAC’s of NPL as listed below is disposed off after appropriate Adjudication order and its related action as per the order.

123

group, but of Deep Stock Broking. SEBI alleged that Nova Petrochemicals Limited violated provisions of regulation 7(3) and 8(3) of SEBI (SAST) Regulation. In respect of the same, Nova Petrochemicals Limited was asked to show cause as to why an enquiry should not be held in terms of Rule 4 of the SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995 and why penalty should not be imposed under section 15A(b) of the SEBI Act, 1992. SEBI issued a notice under Rule 4 SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995, dated September 14, 2009 addressed to the persons appearing in the below mentioned table, who are the “persons acting in concert”. The aforesaid notice was issued in respect of alleged irregularity in the trading in shares of Nova Petrochemicals Limited, resulting in possible violations of the provisions of regulation 3 (c&d), regulation 4(1), 4(2) (a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 2003 and read with section 12A (a & c) of the Securities and Exchange Board of India Act, 1992 and regulation 3(i) of SEBI (Prohibition of Insider Trading) Regulations, 1992 read with section 12A(d&e) of SEBI Act, 1992. In respect of the same, the following persons were asked to show cause as to why an enquiry should not be held in terms of Rule 4 of the SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995 and why penalty should not be imposed under section 15HA and 15G(ii) of the SEBI Act, 1992. SEBI, vide further notice dated November 5, 2009 modified paragraph 1 and paragraph 12 of the abovementioned notices dated September 14, 2009. Paragraph 1 of the original notice was modified to read as “The undersigned has been appointed as Adjudicating Officer vide order dated May 4, 2009 to inquire into and adjudge under Section 151 of the SEBI Act, 1992; Section 15G (i) read with Section 12A (d&e) of the SEBI Act, 1992 and Section 15HA read with Section 12A (c) of the SEBI Act, 1992 for the alleged irregularity in the trading in the shares of M/s Nova Petrochemicals Limited” Paragraph 12 was modified to read as “Thus it is alleged that you have violated the provisions of regulation 3 (a&d), regulation 4(1), 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to securities market) Regulations, 2003 and read with section 12A(c) of the SEBI Act, 1992 and regulation 3(i) of SEBI (Prohibition of Insider Trading) Regulations, 1992 read with section 12A(d&e) of SEBI Act, 1992.”

124

Sr. No.

Name of the person/entity to whom the notice

was issued

Date of the original notice and notice no.

Date of the modified notice and notice no.

Status

1. Brijmohan D (HUF)

Notice dated September 14, 2009 bearing no. A&E/MK/IVD/NPL/ 176644/2009

Notice dated November 5, 2009 bearing no. A&E/MK/IVD/NPL/182163/2009.

Adjudication Order Received & matter

closed. 2. Vedprakash &

Bros. (HUF) Notice dated September 14, 2009 bearing

no. A&E/MK/IVD/NPL/176657/2009 Notice dated November 5, 2009 bearing

no. A&E/MK/IVD/NPL/182194/2009 do”

3. Vishal V Chiripal Notice dated September 14, 2009 bearing no. A&E/MK/IVD/NPL/176662/2009

Notice dated November 5, 2009 bearing no. A&E/MK/IVD/NPL/182198/2009

‘do”

4. Nishi J Agarwal Notice dated September 14, 2009 bearing no. A&E/MK/IVD/NPL/176650/2009


‘do”

5. Vedprakash (HUF)

Notice dated September 14, 2009 bearing no. A&E/MK/IVD/NPL/176663/2009


‘do”

6. Savitridevi B Chiripal



‘do”

7. Manjudevi J Agarwal



‘do”

8. S Jyotiprasad (HUF)



‘do”

9. Deepak J Agarwal



‘do”

10. Devkinandan & Sons (HUF)



‘do”

11. S Vedprakash (HUF)



‘do”

12. V Jyotiprasad (HUF)



‘do”

13. Jaiprakash D Agarwal



‘do”

14. S Jayprakash (HUF)



‘do”

15. Vedprakash Jaiprakash (HUF)



‘do”

16. Vedprakash Jyotiprakash (HUF)



‘do”

17. V Brijmohan (HUF)



‘do”

18. Urmiladevi J Agarwal



‘do”

19. Pritidevi B Chiripal



‘do”

20. Vedprakash Brijmohan (HUF)



‘do”

21. V Jaiprakash (HUF)



‘do”

125

Matter before the Board for Industrial and Financial Reconstruction

Sr. No.

Forum Case No. Parties to proceedings

Brief particulars

Quantum (Rs. approx.)

Current Status

1. Board for Industrial and Financial Reconstruction

Case no.37/2009

- The Board for Industrial and Financial Reconstruction vide order dated December 8, 2009, in case no. 37/2009, dismissed the reference as not maintainable, as the relevant annual accounts of the financial year ending March 2009 had become unreliable, and had to be altered substantially. Since the company had demerged by the order by the order of the High Court of Gujarat dated August 27, 2009.

- -

Labour Cases:

Sr. No.

Forum Case No.


Brief particulars


Current Status

1. Presiding Officer, Labour Court, Ahmedabad

Recovery application bearing No. 2068/2002 dated December 17, 2002

Baban Maruti Gaekwad Vs Nova Petrochemicals Ltd

Baban Maruti Gaekwad filed a recovery application against Nova Petrochemicals in the Labour Court at Ahmedabad alleging that he was wrongfully dismissed from service with effect from November 29, 2001 and for recovery of outstanding amount of Rs. 87,042/- towards outstanding salary, double salary for overtime, leave encashment and bonus.

87,042 The matter is pending before the Labour Court at Ahmedaba d

2. Labour court Ahmedabad

Suit bearing No. 2069/2002 dated December 17, 2002

Atulbhai Umatiya Vs. Nova Petrochemicals Ltd.

Atulbhai Umatiya filed a suit against Nova Petrochemicals Limited in the Labour Court at Ahmedabad claiming Rs. 124,240 towards outstanding salary, conveyance and overtime and cost of the suit. Nova Petrochemicals Limited has filed a written reply dated February 28, 2003 to the said application.

124,240 The case is pending before the Labour Court at Ahmedab ad.

3. Labour Court, Ahmedabad

Application No.864/02 dated July 27, 2002

Atulbhai Umatia Vs. Nova Petrochemicals Limited

Atulbhai Umatia filed an application dated July 27, 2002 against Nova Petrochemicals Limited in the Labour Court at Ahmedabad, claiming reinstatement in service with back wages and considering continuous service. Nova Petrochemicals Limited in its written reply dated February 10, 2003 denied the said allegation.

- The case is pending

before the Labour Court at

Ahmedaba d.

126

Income Tax Disputes:

Sr. No.Forum Case

No.


Brief particulars


Current Status

1. Income Tax Appellate Tribunal, Ahmedabad

Appeal No. 3261/Ahd/2004 dated November 8,2004

Assistant Commissioner of Income Tax, Circle – 5, Ahmedabad Vs. Nova Petrochemicals Limited

The amount demanded from Nova Petrochemicals Limited under Section 234C of Income Tax Act, 1961for the assessment year 2001-2002 was Rs. 9,98,175/ which had been computed vide Assesment Order dated March 31, 2004, Nova Petrochemicals Limited filed an appeal bearing No. CIT(A)-XI/49/20042005 dated April 28, 2004 in the Office of Commissioner of Income Tax (Appeals)-XI, against the said Assessment Order of the Assistant Commissioner and against the demand of Rs. 998,175/- vide notice of demand. The Commissioner of Income Tax (Appeals)XI, by his order dated August 6, 2004 deleted the addition of Rs. 10,00,25,968/ under Section 68 of the Income Tax Act, 1961, and deleted the addition of 4,93,768/- being interest related to the amount borrowed for the expansion of the existing business. The Assistant Commissioner of Income Tax, Circle – 5, Ahmedabad, has filed an appeal bearing No. 3261/Ahd/2004 dated November 8, 2004 against the deletion of said amounts in the order of the Commissioner of Income Tax (Appeals) – XI dated August 6, 2004.

100,025,968 and 493,768

The appeal is pending before the Income Tax Appellate Tribunal.


Appeal no.1828/07/2001


The amount demanded from Nova Petrochemicals Limited for the Assessment Year 1998-1999 was NIL vide Notice of Demand under Section 156 of Income Tax Act, 1961 dated November 11, 2002. Nova Petrochemicals Limited filed an appeal to the Commissioner of Income Tax (Appeals) – XI, against the Assessment Order by the Joint Commissioner of Income Tax who directed the Assessing Officer certain expenses and further directed the Assessing Officer to delete the interest charged u/s 234B and 234C. The Assistant Commissioner of Income Tax, Circle – 5, Ahmedabad, has filed an appeal bearing No. 1828/07/2001 against the order dated June 18, 2001 of the Commissioner of Income Tax (Appeals) – XIII, in respect of allowing the deduction of Rs. 1,106,277 in the Income Tax Appellate Tribunal.

1,106,277 The appeal is pending before the Income Tax

Appellate Tribunal.


Appeal no. 801/ A /2002


The amount demanded from Nova Petrochemicals Limited for the Assessment Year 1999-2000 was Rs. 15,98,615/- vide Notice of Demand under Section 156 of Income Tax Act, 1961 dated August 16, 2000. Nova Petrochemicals Limited filed an appeal bearing No. CIT(A)XI/41/00-01 to the Commissioner of Income Tax (Appeals) – XI, against the Assessment Order by the Joint Commissioner of Income Tax. (Appeals) – XI vide Order dated January 23, 2002 allowed the said appeal. Thereafter, the Assistant Commissioner of Income Tax, Circle – 5, Ahmedabad, filed the appeal bearing no. 801 /A / 2002 dated March 27, 2002, against the said order of the Commissioner of Income Tax (Appeals) – XIII in the Income Tax Appellate Tribunal, Gujarat, in respect of deleting interest charged of Rs. 15,98,615/- while computing income under the Income Tax Act, 1961.

1598,615 The appeal is pending before the Income Tax Appellate Tribunal.

127


Appeal no. 1149/AHD/2002


The amount demanded from Nova Petrochemicals Limited for the Assessment Year 2000-2001 was Rs. 1,514,120 vide intimation given under Section 143(1)(a) of Income Tax Act, 1961 dated May 24, 2001 by the Joint Commissioner of Income Tax. Nova Petrochemicals Limited filed an appeal bearing no. CIT(A)XI/14/2000-01 to the Commissioner of Income tax (Appeals) – XI, Ahmedabad, against the said intimation order. The Commissioner of Income tax (Appeals) – XI, Ahmedabad, by Order dated February 2, 2002, allowed the said appeal. Thereafter, the Assistant Commissioner Income Tax, Circle – 5, Ahmedabad filed an appeal bearing No. 1149/AHD/2002 before the Income Tax Appellate Tribunal, against the order of the Commissioner of Income Tax (Appeals) for the Assessment year 20002001, in respect of interest of Rs.1,514,120/, charged under section 234B and 234C of the Income Tax Act, 1961.

1,514,120 The matter is pending before the Income Tax Appellate Tribunal.

Excise cases

Sr. No.

Forum Case No. Parties to

proceedings Brief particulars Quantum(Rs. approx.)

Current Status

1. Deputy Commissi oner of Central Excise, Div V, Ahmedabad –I

Notice bearing F.NO. STC/4-79/Audit/Nov a/04-05 dated September 1, 2004

Deputy Commissioner of Central Excise, Div V, Ahmedabad – I Vs. Nova Petrochemical s Limited

Notice bearing F.NO. STC/479/Audit/Nova/04-05 dated September 1, 2004 was issued by the Deputy Commissioner of Central Excise, Div V, Ahmedabad –I in respect of service tax on goods transportation services availed by Nova Petrochemicals Limited, of an amount of Rs, 2,15,902/-. Nova Petrochemicals Limited has filed a reply dated October 25, 2004 to the Deputy Commissioner of Service Tax Ahmedabad –I.

2,15,902 The matter is pending before the Deputy Commissio ner of Service Tax Ahmedaba d –I. No Change

2. Assistant Commissi oner of Customs, Group II D, JNCH

Show cause notice bearing no. F. No. S/26-MISC-1-20/2005IID dated May 9, 2005

Assistant Commissioner of Customs, Group II D, JNCH Vs. Nova Petrochemical s Limited

SCN was issued by the Assistant Commissioner of Customs, Group II D, JNCH in respect of erroneously short levying duty on import of polyester chips, amounting to Rs.2,442,362. Nova Petrochemicals Limited filed reply dated May 20, 2005 denying all allegation and averments made in the said show cause notice.

2,442,362 The matter is pending before the Assistant Commissioner of Customs, Group II D, JNCH. No Change

3. Customs, Excise Service Tax Appellate Tribunal, Mumbai

Appeal No. E/360/06-MUM

Commissioner Central Excise, Ahmedabad-II Vs. Nova Petrochemical s Limited

Thirteen Show Cause Notices were issued by the Central Excise Authorities, therein demanding AED(T&TA) of Rs. 87,169,809/- @ 15% of the basic excise duty. The adjudicating Commissioner found such demand unsustainable and ordered the withdrawal of all the 13 Show Cause Notices vide Order-in Original No. 8395/COMMR/2005 dated January 7, 2005. Upon Examination of the said Order, the Committee of Chief Commissioners, Central Excise and Customs, Ahmedabad vide Order No. R-15/2005 dated October 28, 2005 stated that Order of Commissioner was not legal and proper. Further, the Committee under the provisions of Section 35E(1) of the Central Excise Act, 1944 directed the Commissioner, Central Excise, Ahmedabad-II to apply in CESTAT for the correct determination of the demand amounting to Rs.

87,169,809 @ 15% of the basic excise duty

The matter is decided by the CESTAT, Ahmedabad in favour of the Company vide Order No. A/ 1282-1285 /WZB/ AHD/2010 10-8-2010 Decided in favour of the Company

128

87,169,809 and the interest to be charged thereon. The Commissioner of Central Excise, Ahmedabad – II filed an appeal bearing no. E/360/2006-MUM dated January 30, 2006 before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai. Nova Petrochemicals Limited filed a memorandum of Cross-objections dated April 27, 2006 to the Appellate Tribunal.

4. Customs, Excise Service Tax Appellate Tribunal, Mumbai

Appeal No. E/361/2006/M UM

Commissioner of Central Excise, Ahmedabad – II Vs. Nova Petrochemical s Limited

Seven Show Cause Notices were issued by the Central Excise Authorities, therein demanding AED(T&TA) of Rs. 47,176,754@ 15% of the basic excise duty. The adjudicating Commissioner found such demand unsustainable and ordered the withdrawal of all the 7 Show Cause Notices vide Order-in Original No. 4652/COMMR/2005 dated January 6, 2005. Upon Examination of the said Order, the Committee of Chief Commissioners, Central Excise and Customs, Ahmedabad vide Order No. R-13/2005 dated October 28, 2005 stated that Order of Commissioner was not legal and proper. Further, the Committee under the provisions of Section 35E(1) of the Central Excise Act, 1944 directed the Commissioner, Central Excise, Ahmedabad-II to apply in CESTAT for the correct determination of the demand amounting to Rs. 47,176,754 and the interest to be charged thereon. The Commissioner of Central Excise, Ahmedabad – II filed an appeal bearing no. E/361/2006-MUM dated January 30, 2006 before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai. Nova Petrochemicals Limited filed a memorandum of Cross-objections dated April 27, 2006 to the Appellate Tribunal.

47,176,754 @ 15% of the basic excise duty

The matter is decided by the CESTAT, Ahmedabad in favour of the Company vide Order No.A/1282-1285/WZB/AHD/2010 dt. 10-8-2010. .

5. Commissi oner of Central Excise, Ahmedabad-II

Show cause notice No. V/15-84/Dem/2008 dated February 3, 2009

Commissioner of Central Excise, Ahmedabad – II Vs. Nova Petrochemicals Limited

The show cause notice has been issued by the Commissioner of Central Excise, Ahmedabad – II to show cause as to why (a) Cenvat credit amounting to Rs. 7,460,264 wrongly availed during the period 2007-08, 2008-2009 (upto December 2008) and also failure to reverse the proportionate cenvat credit attributable to inputs used in or in relation to manufacture of exempted final goods i.e. goods manufactured on job-work basis at the time of clearance of such exempted goods from their factory in violation Rule 6(3)(a) of Cenvat credit Rules, 2004 should not be disallowed/demanded and recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11AB of the Central Excise Act, 1944 on the amount as mentioned above; (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated February 16, 2009 denied the allegations made in the show cause notice.

7,460,264 The matter is pending before the Commissio ner of Central Excise, Ahmedaba d-II No Change

129

6. Additional Commissioner of Central Excise, Ahmedabad – II

Show cause notice bearing no. F. No. V.54/15-83/Dem/2008 dated March 25, 2009

Additional Commissioner Central Excise, Ahmedabad – II Vs. Nova Petrochemical s Limited

The show cause notice was issued by the issued by the Additional Commissioner of Central Excise, Ahmedabad – II to show cause as to why (a) Inadmissible service tax credit amounting to Rs. 1,377,600 wrongly taken for the period from January 2005, February 2005, March 2005 and April 2005 to March 2006 on output service which is not admissible to them as they are the service provider (registered under category, “Business Auxiliary Service” under the Service Tax Act) should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited filed reply dated April 22, 2009 denying the credit alleged to have been availed by them.

1,377,600 along with interest and penalty

Commissioner (Appeals)Central Excise, Ahmedaba d has allowed appeal of the company and set aside the entire demand of duty, interest and penalty vide Order No. 166/2010(Ahd-II)CE/CMC/Commr(A) dated 23-6-2010

7. Additional Commissioner of Central Excise, Ahmedaba d-II

Show cause notice F. No. V/54/15-83/Dem/2008 dated March 26, 2009

Additional Commissioner of Central Excise, Ahmedabad – II Vs. Nova Petrochemical s Limited

The show cause notice has been issued by the Additional Commissioner of Central Excise, Ahmedabad-II to show cause as to why (a) Excise duty amounting to Rs. 814,106 not paid on the excisable goods cleared under tax invoices should not be recovered under proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 25 of the Central Excise Rules, 2002. Nova Petrochemicals Limited vide letter dated April 16, 2009 denied the allegations made in the show cause notice, stating that there was no merit recovering excise duty from the Company, for goods produced on job work basis .

814,106 The matter is pending before the Additional Commissioner of Central Excise, Ahmedabad-II. However, Commissio ner (Appeals) Central Excise, Ahmedaba d has allowed appeal of the company and set aside the entire demand of duty, interest and penalty.

130

8. Additional Commissi oner of Central Excise, Ahmedaba d-II



The show cause notice has been issued in respect of non-reversal of proportionate central excise duty on insurance claim received and to show cause as to why (a) Inadmissible cenvat credit amounting to Rs. 1,065,703 as insurance claim received on raw materials and capital goods which has not been proportionately reversed to the cenvat credit account should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 16, 2009 denied the allegations made in the show cause notice.

1,065,703 The matter ispending beforethe AdditionalCommissio nerof CentralExcise, Ahmedaba d-II.In appealbefore Commissioner Appeals, dutydemand hasbeen reducedto 6,72,975/-vide Order No.169/2010 Ahd-II)CE/CMC/Commr(A)dated 7-07-2010 Company’s appeal beforeCESTAT ispending andStay againstrecovery isordered videOrder No.S/241/WZB/ AHD/2011 dt.9-3-2011.




The show cause notice has been issued to show cause as to why (a) Cenvat credit amounting to Rs. 2,378,038 wrongly availed on service tax paid on GTA service on outward freight should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 08, 2009 denied all the allegations made in the show cause notice and further stated that a show cause notice bearing no. V.54/319/D/06 dated November 1, 2006 had already been issued for the matter of outward freight for the period from November, 2005 and December, 2005 and therefore another show cause notice under the proviso to section 11A(1) was illegal.

2,378,038 The matter is pending before the Additional Commissioner of Central Excise, Ahmedabad-II No Change

131

10. Assistant Commissi oner of Central Excise, Division IV, Ahmedaba d-II

Show cause notice F. No. V/54/3-68/D/08 dated February 25, 2009

Assistant Commissioner of Central Excise, Division IV, Ahmedabad – II Vs. Nova Petrochemical s Limited

The show cause notice has been issued to show cause as to why (a) Cenvat credit amounting to Rs.121,040 availed during the period 2007-08 on the manufacture of goods on job work basis and failure to reverse the proportional amount to cenvat credit, should be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944; and (c) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated March 26, 2009 denied all the allegations made in the show cause notice and further inter alia stated that the yarn was produced on job work were further used by the principals for manufacture of goods like other yarns cleared from principals’ factories on payment of duties, and that there was no irregularity or illegality in availment of cenvat for the materials used in relation to such final products, namely yarns, cleared from principals’ factories on payment of duties.

121,040 The matter is allowed in favour of Company by CESTAT Ahmedabad vide Order No. A/832/WZB/AHD/2010 dt. 28-6-2010.

11.

Additional Commissi oner of Central Excise, Ahmedaba d-II

Show cause notice F. No. V/54/15-25/DEM/2009 dated March 25, 2009


The show cause notice has been issued to show cause as to why (a) Inadmissible cenvat credit amounting to Rs.2,131,903 should not be recovered and disallowed under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 10, 2009 denied all the allegations in the show cause notice and further stated that Nova Petrochemicals was entitled to avail cenvat credits of inputs used to manufacture goods on job work basis.

2,131,903

The matter is pending before the Additional Commissioner of Central Excise, Ahmedabad-II No Change.

12.


Show cause notice F. No. V/54/15-21/DEM/2009 dated May 12, 2009


The show cause notice has been issued to show cause as to why

(a) cenvat credit amounting to Rs.2,012,181 should not be recovered and disallowed under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944.

2,012,181

The matter is pending before the CESTAT, Ahmedabad

132




The show cause notice has been issued to show cause as to why (a) central excise duty amounting to Rs. 1,959,742 not paid for the sale of scrap should not be recovered and disallowed under proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 25 of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 22, 2009 denied all the allegations in the show cause notice inter alia stating that there was no justification in proposing to recover any amount as excise duty on scrap of packaging material, etc., and further there was no justification in invoking extended period of limitation.

1,959,742

The matter is pending before the Commissio ner (Appeals) Central Excise, Ahmedabad

14.



Additional Commissioner of Central Excise, Ahmedabad – I I Vs. Nova Petrochemical s Limited

The show cause notice has been issued to show cause as to why (a) cenvat credit amounting to Rs. 559,138 should not be disallowed and recovered under proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 08, 2009 denied the allegations in the show cause notice.

559,138 The matter is pending before the Additional Commissioner of Central Excise, Ahmedaba d-II No change

Textile cases Service tax matters:

Sr. No.

Forum Case No.


Brief particulars Quantum

(Rs. approx.)

Current Status

1. Additional Commissioner of Service Tax, Ahmedabad

Show cause notice F. No. STC-143/O&A/SCN /NP/JC/RIX/D-II/08 dated June, 2009

Additional Commissioner of Service Tax, Ahmedabad Vs. Nova Petrochemicals Limited

The show cause notice has been issued to show cause as to why: (a) Service tax amounting to Rs. 926,576 not paid on the Goods Transport Agency Services received by them during April 2007 to February 2008 should not be demanded and recovered under Section 73(1) read with Section 68 of the Finance Act, 1944; (b) The cenvat credit of the above mentioned amount utilized towards payment of service tax should not be disallowed as it is not admissible towards payment of service tax as per Rule 3 read with Rule 14 of the Cenvat credit Rules, 2004; (c) Interest on the amount under Section 75 of the Finance Act, 1944 should not be recovered and the interest totaling to Rs. 50,452 paid by then should not be adjusted towards their interest liability; and (c) Penalty should not be imposed under Section 76 of the Finance Act, 1944 and also under Rule 15(3) of the Cenvat Credit Rules, 2004.

926,576 The matter is pending before the Commissioner (Appeals) Central Excise, Ahmedabad

133

2. Commissioner of Service Tax, Ahmedabad

Show cause notice F. No. STC/4-31/Prev-V/20 08-09-Nova dated April 6, 2009

Commissioner of Service Tax, Ahmedabad Vs. Nova Petrochemicals Limited

The show cause notice has been issued to show cause as to why (a) Service tax amounting to Rs. 74.34 lacs including education cess should not be demanded under section 73(1) read wit section 68 of the Finance Act, 1994, invoking the period from July 1, 2003 to March 31, 2007, which included subsequent payment of service tax of Rs. 601,418 and Rs. 36,223 could not be considered as the same was not paid or reflected in ST-3 return in the period aforementioned; (b) Interest at the prescribed rate under Section 75 of the Finance Act, 1944 should not be recovered; and (c) Penalty should not be imposed under Section 76, Section 77 and Section 78 respectively, of the Finance Act, 1944. Nova Petrochemicals Limited replied to the above show cause notice dated September 3, 2009 inter alia stating that the demand of service tax and further proposals for interest and penalty were unsustainable.

74.34 lacs

The matter is pending before the CESTAT, Ahmedabad

Civil Matters: Sr. No.

Forum Case

No.


Brief particulars Quantum (Rs. approx.)

Current Status

1. Debt Recovery Appellate Tribunal, Mumbai,

Miscellaneous Application no. 153 of 2007

Nova Petrochemicals Limited Vs. Union Bank of India and Konika Leasing Private Limited

Nova Petrochemicals filed a Miscellaneous Application in Appeal No. 81/07 dated August 16, 2007 in the Debt Recovery Appellate Tribunal at Mumbai for waiver of recovery under Section 21 of Law of Debt Recovery Act, on the grounds that Appellant is a bonafide purchaser of property situated at Trividh Chambers, Ring Road, Surat and is neither a debtor or a guarantor for the said property.

- The matter is pending before the Debt Recovery Tribunal at Mumbai.

Income Tax cases Excise and Customs Matters Textile cases Potential litigation

Sr. No.

Forum

Case No.


Brief particulars Quantum (Rs. approx.)

Current Status


Appeal No. 2624/Ahd2004 dated August 23, 2004

Nova Petrochemicals Limited Vs. Commissioner of Income Tax (Appeals) – XI, Ahmedabad

The amount demanded from Nova Petrochemicals Limited under Section 234C of Income Tax Act, 1961 for the assessment year 2001-2002 was Rs. 9,98,175/- which had beencomputedvide Assesment Order dated March 31,2004, Nova Petrochemicals Limited filed an appeal bearing No.CIT(A)-XI/49/ 2004-2005 dated April 28, 2004 in the Office of Commissioner of Income Tax (Appeals)-XI, against the said Assessment Order of the Assistant Commissioner and against the demand of Rs. 998,175/- vide notice of demand.The Commissioner of Income Tax (Appeals)-XI, in his Order dated August 6, 2004 partly allowed the appeal and also added a sum of Rs. 32,558,452 on the computed total income of Nova Petrochemicals Limited on account of allegedly unexplained expenditure. Nova Petrochemicals Limited has filed an appeal dated August 23, 2004 in the Income Tax Appellate Tribunal, against the said order of the Commissioner of Income Tax (Appeals) – XI, Ahmedabad in respect addition of Rs. 3,25,58,452in the computed total income of Nova Petrochemicals Limited on account of allegedly unexplained expenditure.

32,558,452 The appeal is pending before the Income Tax Appellate Tribunal.

134

2. Commissi

oner of Income Tax, Ahmedabad

Appeal no. 306/2006-2007 dated January 29, 2007

Nova Petrochemicals Limited Vs. Assistant Commissioner of Income Tax,

The amount demanded from Nova Petrochemicals Limited for the Assessment Year 20042005 was Rs. 2,100,108/vide Notice of Demand under Section 156 of Income Tax Act, 1961 dated December 29, 2006. Nova Petrochemicals Limited filed an appeal dated January 29, 2007 to the Commissioner of Income Tax, (Appeals)-XI against the Assessment Order by the Assistant Commissioner of Income Tax, Circle 5, Ahmedabad. Thereafter, Assistant Commissioner of Income Tax, revised the total amount demanded from Nova Petrochemicals Limited vide Notice of Demand under Section 156 of Income Tax Act, 1961 dated February 20, 2007. The revised amount payable for the Assessment Year 2004-2005 in the said notice of demand was was Rs.2,131,094 , and the revised .

2,131,094 The appeal is pending before the Commissioner Income Tax(Appeals)XI, Ahmedabad

3.

Commissioner of Income Tax

Appeal No. CIT (A)-XI/137-61/2006-07

Nova Petrochemicals Limited Vs. Assistant Commissioner Of Income Tax

The amount payable by Nova Petrochemicals Limited for the Assessment Year 20032004 was Rs. 63,19,869/vide Notice of Demand under Section 156 of Income Tax Act, 1961 dated March 8, 2006. Nova Petrochemicals Limited filed an appeal dated April 12, 2006 to the Commissioner of Income Tax (Appeals) – XI, against the Assessment Order by the Assistant Commissioner of Income Tax, Circle – 5, Ahmedabad. The Commissioner of Income Tax (Appeals) – XI, by order dated March 8, 2006, revised the total amount payable for the Assessment Year 2003 – 2004 to Rs. 34,00,599 vide order passed under Section 154 of Income Tax Act, 1961. The Deputy Commissioner of Income Tax, Circle – 5, Ahmedabad thereafter has issued a fresh Notice of Demand dated October 15, 2007 to Nova Petrochemicals Limited for Rs.9,04,733/-.

3,400,599 and 904,733

The matter is pending before the Deputy Commissioner of Income Tax, Circle – 5.

4.

Dy. Commissioner (Appeals) of Income Tax & Commissioner of Income Tax (Appeals)

Appeal is filled but it is yet to be heard.

Nova Petrochemicals Limited Vs. Of Income Tax Circle 5, Ahmedabad

Dy. Commissiner of Income tax Circle 5, Ahmedabad passed an Order U/s.143(3) of the Income Tax Act r.w.s. 147 of the Act Dt 18.11.2010 for AY 2003-04 disallowing of interest of Rs. 63,58,012/- u/s. 40(a)(i) & disallowance u/s. 14A if Rs, 2,26,714/-. Nova Petrochemicals Ltd. has appealed the order of commissioner of income tax circle 5 u/s. 246(1)(a) of the Income Tax Act.

63,58,012/- &

2,26,714/-

Appeal is filled but it is yet to

be heard.

5.




Dy. Commissiner of Income tax Circle 5, Ahmedabad passed an Order U/s.143 (3) of the Income Tax Act r.w.s. 147 of the Act Dt 18.11.2010 for AY 2004-05 disallowing of interest of Rs. 41,27,287/- u/s. 40(a)(i) & disallowance u/s. 14A if Rs, 1,71,495/- & disallowance of Depreciation of Rs. 2,09,56,984/- Nova Petrochemicals Ltd. has appealed the order of commissioner of income tax circle 5 u/s. 246(1)(a) of the Income Tax Act.

41,27,287/- &1,71,495/-& 2,09,56,984/-


135

6.




Dy. Commissiner of Income tax Circle 5, Ahmedabad passed an Order U/s.143 (3) of the Income Tax Act r.w.s. 147 of the Act Dt 18.11.2010 for AY 2005-06 disallowing of interest of Rs. 29,61,313/- u/s. 40(a)(i) & disallowance u/s. 14A if Rs, 1,98,620/- & disallowance of Depreciation of Rs. 66,55,118/- Nova Petrochemicals Ltd. has appealed the order of commissioner of income tax circle 5 u/s. 246(1)(a) of the Income Tax Act.

29,61,313/- & 1,98,620/- & 66,55,118/-


7.



CIL Nova Petrochemicals Limited Vs. Of Income Tax Circle 1, Ahmedabad

Dy. Commissiner of Income tax Circle 1, Ahmedabad passed an Order U/s.143 (3) of the Income Tax Act Dt 24.12.2010 for AY 2008-09 disallowing Interest on WIP of Rs. 8,91,121/-, Interest on non interest bearing advance of Rs. 18,11,845/-, Disallowance u/s. 40(a)(ia) of Rs. 13,23,946/-, Treating Revenue Exps as Capital Exps of Rs. 8,62,031/-, Disallowance u/s. 40(A)(2)(b) of Rs. 49,347/-, Late Payment of EPF of Rs. 1,97,943/-, Disallowance u/s. 43B of Rs. 7,49,511/- & Disallowance u/s. 14A of Rs. 6/-. CIL Nova Petrochemicals Ltd. has appealed the order of commissioner of income tax circle 1 u/s. 246(1)(a) of the income tax act

51,36,239/-


8 Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Appeal bearing no. E/S/1174/0 5

Nova Petroche micals Limited Vs. Commiss ioner of Central Excise, (Adj.)

Show Cause Notice bearing No. F.No. DGCEI/AZU/36-26/2004/1650 dated June 30, 2004 was issued by the Additional Director General, DGCEI, Zonal Unit, Ahmedabad. Nova Petrochemicals Limited filed a reply dated August 14, 2004 to the Commissioner of Central Excise. The Commissioner has passed Order in original bearing No. F.No.V.54/1528/NOVA/2004/588 dated February 17, 2005 therein dropping the demand of Rs. 2,683,420/-, confirming the demand of Rs.4,279,513/- and dropping the proposal to impose penalty. The Committee of Chief Commissioners (constituted vide notification no. 24/2005-CE (NT) dated May 13, 2005), Central Excise and Customs, Ahmedabad, by an order dated October 28, 2005 directed the Commissioner Central Excise, Ahmedabad – II to make an application in the Customs, Excise and Service Tax Appellate Tribunal to correctly determine whether the adjudicating authority was justified in not confirming the demand of Rs. 2,683,420/-and not imposing penalty under Rule 25 of the CER, 2002. Nova Petrochemicals Limited filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad for waiver of predeposit of Rs. 4,279,513/-. Nova Petrochemicals Limited filed an appeal bearing no. E/S/1174/05 in the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, which by its order dated August 16, 2005 directed Nova Petrochemicals Limited to deposit Rs. 501,467/-. Nova Petrochemicals Limited filed a stay application in the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad for extension of stay order no.

501,467 The matter is pending before the Commission er of Central Excise, Ahmedabad .

136

S/65/WZB/2005/C-III/EB dated August 16, 2005. Nova Petrochemicals Limited, by its letter dated December 4, 2007 to the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, filed a miscellaneous application for extension of stay order no. S/65/WZB/2005/C-III/EB dated August 16, 2005. Order in original bearing No. 5/COMMR./2004 dated June 30, 2004 (issued on August 16, 2004) was issued by the Commissioner of Customs, Ahmedabad, therein imposing a fine of Rs. 1,000,000/-, customs duty of Rs.1,707,929/- and penalty of Rs. 500,000/- each on Nova Petrochemicals Limited and its Director, Sunil Gupta. Nova Petrochemicals Limited has filed an appeal bearing no. E/1401 of 2004 in the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad praying to set aside Order in original bearing No. 5/COMMR./2004 dated June 30, 2004, passed by the Commissioner of Customs, Ahmedabad. Nova Petrochemicals Limited, by its letter dated December 4, 2007 to the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, filed a miscellaneous application for extension of stay order no. S/65/WZB/2005/C-III/EB dated August 16, 2005. The Customs, Excise & Service Tax Appellate Tribunal, Mumbai, by its order no. S/65/WZB/MUM/2005/GII/EB dated August 16, 2005, directed Nova Petrochemicals Limited in respect of both the abovementioned matters to deposit Rs. 501,467/-, and subject to this compliance being made, the pre-deposit of the balance amount would be waived during the pendency of the appeal. The Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad vide order dated November 19, 2008 bearing number A/2541/WZB/AHD/08 remanded the matter to the Commissioner to re-consider the issue in light of the two orders of the Commissioner namely 4652/COMMR/2005 dated January 6, 2005 and one order of the Commissioner (Appeals) dated February 29, 2008 bearing number 28-29/2008/Ahd-I)Central Excise/ID /Commr.(A).

9. Textile Committee Appellate Tribunal, Mumbai

Appeal no. [●]

Nova Petroche micals Limited Assessin g Officer, Textiles Committee, Ministry of Textiles Vs. Assessin g Officer, Textile Committ ee

The Assessing Officer, Textiles Committee, Ministry of Textiles has issued a notice dated July 22, 2005 to Nova Petrochemicals Limited in respect of payment of cess dues of Rs. 1,483,185 under the Textiles Committee Act and Cess Rules. Nova Petrochemicals Limited has filed an appeal on July 28, 2009 before the Textile Committee, Appellate Tribunal, Mumbai, praying that the impugned notice of demand for Rs. 4,132,456 be set aside, that Cess under the provisions of Section 5A of Textile Committee Act, 1963, is not leviable on the products manufactured by Nova Petrochemicals Limited and the impugned notice of demand be stayed pending hearing and final disposal of the appeal.

1,483,185 The matter is pending.

137

10. Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad

Appeal No. 94/2008

Nova Petroche micals Limited Vs. Assistant Commiss ioner Central Excise, Ahmeda bad – I

Show cause notice bearing no. F. No. V.54/3-19/D/06 dated November 1, 2006 was issued by Assistant Commissioner Central Excise, Ahmedabad – I, in respect of CENVAT credit of GTA Service Tax paid for outward Freight charges amounting to Rs.282, 957. Nova Petrochemicals Limited filed reply dated June 21, 2007 denying all allegations in the said show cause notice. The Assistant Commissioner Central Excise, Division IV, Ahmedabad – I, vide Order-In-Original dated December 26, 2007 confirmed the demand of Rs. 282,957 under Rule 14 of the Cenvat Credit Rules, 2004, read with the proviso to Section 11A(1) of the Central Excise Act, 1944, with interest at the appropriate rate under Rule 14 of the Cenvat Credit Rules, 2004 read with the proviso to Section 11AB of the Central Excise Act, 1944, and imposed a penalty of Rs. 10,000 on Nova Petrochemicals Limited. Nova Petrochemicals Limited filed an appeal along with stay application before the Commissioner (Appeals) Central Excise, Ahmedabad – I against Order-In-Original dated December 26, 2007 praying to set aside the impugned order and any other order as may be deemed fit. The Commissioner (Appeals) Central Excise, Ahmedabad – I vide Order-In-Appeal dated August 26, 2008 bearing number 94/2008(Ahd II)CE/SBS/Commr.(A)(Ahd) rejected the appeal and upheld the impugned Order-In-Original dated December 26, 2007. Nova Petrochemicals Limited filed an appeal and stay application before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, praying that the said Order-In-Appeal bearing no. 94/2008 (Ahd-II)CE/SBS/Commr(A)/Ahd dated August 26, 2008 passed by the Commissioner (Appeals-IV), Central Excise, Ahmedabad, may be set aside with consequential benefits; and for any further relief as may be deemed fit. Nova Petrochemicals Limited, in its stay application prayed that the condition of pre-deposit of the amounts of duty and penalty for entertaining the appeal on merits may be waived and stay against the recovery of the same during the pendency of the appeal against the impugned order may be granted, with any further relief as may be deemed fit.

282,957 The matter is pending before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad – II.

11. Appellate Tribunal, West Regional Bench, Mumbai

- Nova Petrochemic als Limited (‘Appellant ‘) Vs. Assessing Officer, Textile Committee (‘Responde nt’)

Nova Petrochemicals Limited has filed an appeal on July 28, 2009 before the Textile Committee, Appellate Tribunal, Mumbai, praying that the impugned notice of demand for Rs. 4,564,597 be set aside, that Cess under the provisions of Section 5A of Textile Committee Act, 1963, is not leviable on the products manufactured by Nova Petrochemicals Limited and the impugned notice of demand be stayed pending hearing and final disposal of the appeal.

4,564,597 The matter is pending.

138

Sr. No.

Forum

Case No.

Parties to proceedi ngs

Brief particulars


Current Status

12. Appellate

Tribunal, West

Regional Bench, Mumbai

- Nova Petrochemic als Limited

(‘Appellant ‘) Vs.

Assessing Officer, Textile

Committee

(‘Responde nt’)

The Chief Accounts Officer, Textiles Committee, Ministry of Textiles issued a notice dated January 17, 2005 to Nova Petrochemicals Limited in respect of payment of cess dues of Rs. 4,132,456/- under the Textiles Committee Act and Cess Rules, 1975. Nova Petrochemicals Limited has replied to the said notice vide letter dated February 12, 2005. Nova Petrochemicals Limited has filed an appeal on July 28, 2009 before the Textile Committee, Appellate Tribunal, Mumbai, praying that the impugned notice of demand for Rs. 4,132,456 be set aside, that Cess under the provisions of Section 5A of Textile Committee Act, 1963, is not leviable on the products manufactured by Nova Petrochemicals Limited and the impugned notice of demand be stayed pending hearing and final disposal of the appeal.

4,132,45 6

The matter is pending.

13.


Show cause notice F. No. V/54/15-81/Dem/200 8 dated March 23, 2009


The show cause notice has been issued to show cause as to why (a) Cenvat credit amounting to Rs. 3,284,076 wrongly availed by them should be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944; (b) Interest at the appropriate rate should not be recovered under Rule 14 of the Cenvat credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944; and (c) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 22, 2009 denied the made in the show cause notice.

3,284,076The Additional Commissio ner of Central Excise, Ahmedabad -II vide order dated December 14, 2009 confirmed the recovery of Rs. 3,284,076 and imposed a penalty of Rs. 3,284,076 and ordered recovery of interest on the amount confirmed.

14.


Show cause notice F. No. V/54/15-16/DEM/20 09 dated March 25, 2009

Additional Commissioner of Central Excise, Ahmedabad – I Vs. Nova Petrochemical s Limited

The show cause notice has been issued to show cause as to why (a) cenvat credit amounting to Rs. 2,330,228 wrongly availed should not be disallowed and recovered, under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of the Central Excise Act, 1944. however, since the same had been reversed, why the same should nto be adjusted against the cenvat credit wrongly availed; (b) Penalty should not be imposed under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944; and (c) Interest at the appropriate rate @ 13% amounting to Rs. 488,186 should not be recovered under Section 11AB of the Central Excise Act, 1944. Nova Petrochemicals Limited vide letter dated April 22, 2009 denied the allegations in the show cause notice therein inter alia stating that there was no justification in proposing to recover any amount as excise duty on scrap of packaging materials and in invoking an extended period of limitation.

Demand of Rs. 2,330,228 and penalty of Rs. 488,186

The Additional Commissioner of Central Excise, Ahmedabad -II vide order dated November 27, 2009 confirmed the recovery of Rs. 2,330,228a nd imposed a penalty of Rs. 2,330,228 and ordered recovery of interest of Rs. 488,186 on the amount confirmed.

139

Cases filed by and against the Directors Criminal Laws:

Sr. No. Forum Case

No.


Brief particulars


Current Status

1. High Court of Gujarat

Director General Central Excise, Ahmedabad Vs. Mr. Jyotiprasad Chiripal

Mr. Jyotiprasad Chiripal was arrested by the Director General Central Excise, Ahmedabad, during the search of the premises of Nova Petrochemicals Limited on 15th and 16th August 2002. Mr. Jyotiprasad Chiripal was subsequently granted bail by the Honourable High Court of Gujarat. The investigation was to ascertain illicit manufacture and removal of polyester oriented filament yarn through an export oriented unit, in the local market, without payment of duty. A show cause notice was issued to Nova Petrochemicals Limited on 30th June 2006. The hearing was fixed on 30th April 2007, was adjourned. The next date of hearing is to be intimated to the company

The adjudicate ion is still pending and the company is suitably defending g the matter before the adjudicate ion authority.

2. Income Tax Dept

CIT Appeal

Vedprakash D Chiripal Vz. Income

Tax (A.Y2008-09)

Assessment Order Passed U/S143(3) & disallow Rs.5475000/-

Paid Amount

Rs.1200000/-

Against Rs.2518727/-

Case Pending at CIT Apppeal

3. Court of the Chief Judicial Magistrate Bhuj (Kutch) Gujarat

Criminal case no. 893 of 2000

Union ofIndia through Deputy Commissioner of Customs(Legal), Kandla Vs.Chiripal Twisting andSizing Private Limited, Shanti Processors Limited andVedprakash Chiripal, Brijmohan Chiripal andothers

The Union of India, through the Deputy Commissioner of Customs, (Legal), Kandla, has filed a case against our Company, Jyotiprakash Chiripal, Jaiprakash Chiripal, Vedprakash Chiripal, Brijmohan Chiripal and Manubhai Patel, in the Court of the Judicial Magistrate at Bhuj. The matter pertains to availment of duty free imports allowed against advance license issued under DEEC scheme and claim of fulfilment of export obligation, by our Company and its Directors, as mentioned above. The Deputy Commissioner of Customs, (Legal), Kandla, vide O-I-O dated October 11, 1996, had imposed the following penalties: Rs. 1,000,000 on Chiripal Twisting and Sizing Pvt. Ltd and Rs. 200,000 each on Shanti Processors Pvt. Ltd, Jyotiprakash Chiripal, Jaiprakash Chiripal and Vedprakash Chiripal. The Sessions Judge at the Court at Bhuj, pursuant to his order dated July 5, 2005, transferred the above case from the Bhuj Court to the Additional Chief Judicial Magistrate at Gandhidham.

1,800,000

The case is not listed till date before Gandhid ham Court.

Cases filed by our Directors

NIL

140

SEBI MATTER

Sr. No

Forum Cas e No.


Brief particulars Quantu m (Rs. approx.)

Current Status

1. Securities and Exchange Board ofIndia

SEBI Vs Vedprakash Chiripal, Chairman, Nova Petrochemical s Limited

SEBI issued a notice dated September 11, 2009, bearing no. A&E/MK/IVD/NPL/176 753/2009, under Rule-4-SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules,1995 to Vedprakash Chiripal, Chairman, Nova Petrochemicals Limited, in respect of alleged irregularity in the trading in shares ofNova etrochemicals Limited, resulting in possible violations of the provisions of regulation 3 (c&d), regulation 4(1), 4(2) (k & r) of SEBI (Prohibitionof Fraudulent and Unfair TradePractices relating to securities market) Regulations, 2003 and read with section 12A (a, b & c) of the Securities and Exchange Board of India Act, 1992 and regulation 3(ii) of SEBI Prohibition of InsiderTrading) Regulations,1992 read with section 12A(e) of SEBI Act, 1992. (. In respect of the same, cause was to be shown as to why an enquiry should not be held in terms of Rule 4 of the SEBI(Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995 and why penalty hould not be imposed under section 15HA and 15G(ii) of the SEBI Act, 1992.

- SEBI, vide letters dated December 24, 2009, bearing no. A&E/MK/ IVD/NPL/188656/2/2009, issued a notice under Rule 4 SEBI (Procedure for holding enquiry and imposing penalties by Adjudicating Officer) Rules, 1995 addressed to Vedprakash Chiripal, Chairman and Managing Director, Nova Petrochemicals Limited and letter dated December 24, 2009, bearing no. A&E/MK/ IVD/NPL/188656/1/2009 issued to Nova Limited, called for a personal appearance at the office of SEBI at Ahmedabad. Nova Petrochemicals Limited vide an email dated January 5, 2010, sought extension of time up till January 20, 2010 to file a reply in the matter. Further, the Chairman of the Company had opted for the consent procedure under the above referred SCN and accordingly SEBI had held personal appearance, which was concluded after giving satisfactory re[ly and documents to SEBI during the personal appearance. Since then the suitable adjudication order from SEBI is awaited for their adjudication in this mater

2. Securities s and Exchang e Board of India

- Securities and Exchange Board of India Vs. Vedprakash Chiripal

For details of this case, please refer to case titled “SEBI Matter” under the caption titled “Cases filed against Nandan Exim Limited” in this Chapter.

- -

141

Cases filed against and by Chiripal Industries Limited Cases filed against Chiripal Industries Limited

Criminal Law:

Sr. No. Forum Case

No. Parties to the proceeding Brief particulars


Current status

1. Chief Judicial Magistrate Bhuj (Kutch) Gujarat

Criminal Case No. 893 of 2000

Union of India through Deputy Commissioner of Customs (Legal) Kandla Vs. Chiripal Twisting & Sizing Private Limited ,Shanti Processors Limited & Vedprakash Chiripal, and Brijmohan Chiripal & others

For further details of this case, please refer to case titled “Union of India through Deputy Commissioner of Customs (Legal), Kandla Vs. Chiripal Twisting and Sizing Private Limited, Shanti Processors Limited and Vedprakash Chiripal, Brijmohan Chiripal and others, bearing Criminal Case No. 893 of 2000 in the Court of the Chief Judicial Magistrate Bhuj (Kutch) Gujarat” under the caption titled “Cases filed against our Directors” on page 306 of the Red Herring Prospectus

1,000,000 (Penalty of Rs.1000,000 imposed on our oompany and the aggregate penalty imposed on our Co. and its directors is Rs.1800000

Case is still pending in Gandhidham, Kandla.

Civil Matters:

Sr. No. Forum Case

No. Parties to proceedings Brief particulars


Current status

1. City Civil Court at Ahmedabad

Civil suit no. 1692/2006

Chetak Roadways (India) Limited (“Plaintiff’) Vs. Goenka Impex Private Limited, Sandheer Enterprises and Shanti Processors Limited (“Defendants”)

Plaintiff is a company in business of transporting property and goods by land. The Defendants had hired the service of the Plaintiff to transport bales of cloth. The delivery of the consignment had been delivered to Defendant No. 2 on instructions received from Defendant No. 1. Our Company claimed that, Defendant no. 1 was not authorized to give instructions to the plaintiff in regards of delivery. Our Company has not filed a reply in the matter.

535,211 The matter is pending before the City Civil Court at Ahmedabad

142

Professional Tax matters, Excise matters, Service Tax matters & Labour Cases:

Sr. No.

Forum Case No. Parties to proceedings

Brief particulars Quantum (Rs.appx.)

Current status

1. Ahmedabad Municipal Corporation Assessment and Tax collection department

Hearing notice for professional tax dated July 1, 2008

Assistant Manager, Professional Tax Vs. Chiripal Industries Limited

The Assistant Manager, Professional Tax, issued a hearing notice for professional tax under the Gujarat State Trade and Commerce, Business and Income Tax Rules, 1976.

- The matter is pending.

2. Assistant Commission er of Customs, Group II C and II D, JNCH, Nhava Sheva

Show Cause Notice

F.No S/26-Misc-1450/2007 Gr. II C & D dated. February 01, 2007

Assistant Commissioner of Customs, Group II C and II D, JNCH, Nhava Sheva Vs. Chiripal Petrochemicals Limited.

SCN was issued by the Assistant Commissioner of Customs requiring our company to state the reason for non-consideration of goods imported as Polyester Chips Semi-dull “A” Grade and non-encashment of the submitted Bond. Our Company has filed a reply dated March 02, 2007 to the said Show Cause Notice stating that the documents like Bills of entry, packing list, etc declares the goods as Polyester Chips Semi-dull “B” Grade and further the Customs laboratory test reports of the samples of the goods have not been made available to us till the date of reply.

- The matter is pending before the Assistant Commissioner of Customs, Group II C and II D, JNCH, Nhava Sheva

3. Assistant Commission er of Customs, Group II C and II D, JNCH, Nhava Sheva

Show Cause Notice F. No S/26-Misc-1451/2007 Gr. II C & D dated February 1, 2007

Assistant Commissioner of Customs, Group II C and II D, JNCH, Nhava Sheva Vs. Chiripal Industries Limited

SCN was issued by the Assistant Commissioner of Customs requiring our company to state the reason for non-consideration of goods imported as Polyester Chips Semi-dull “A” Grade and nonencashment of the submitted Bond. Our Company has filed a reply dated March 02, 2007 to the said Show Cause Notice stating that the documents like Bills of entry, packing list, etc declares the goods as Polyester Chips Semi-dull “B” Grade and further the Customs laboratory test reports of the samples of the goods have not been made available till the date of reply.

- The matter is pending before the Assistant Commissioner of Customs, Group II C and II D, JNCH, Nhava Sheva

4. Customs, Excise and Service Tax Appellate Tribunal

Appeal no. E/809/07-DB, F. No. V/CESTAT/Shanti Process2007 filed by the Commissioner r, Central Excise, Ahmedabad-I against Shanti Processors Limited

Commissioner of Central Excise (Appeal -1) Vs. Shanti Processors Limited

SCN was issued by the Additional Commissioner of Central Excise requiring our company to state the reasons for allowance of Deemed Cenvat Credit amounting to Rs. 4,025,955/- to be taken in Cenvat Credit Account and the non-imposition of interest and penalty. Our Company has filed a reply dated September 10, 2004 to the said Show Cause Notice stating that the accumulated untilised amount of Rs.4,025,955/- maintained in the Cenvat Register was intimated to the Central Excise Department by filing ER-1 for the month of October, 2003 and that no provision of the Cenvat rules would debar us from utilizing the accumulated deemed credit for paying duties on final products. Subsequently an order was passed under Order-in-OriginalNo. 09/Additional Commissioner / 2007 dated February 09, 2007 was passed against our Company for which our Company filed an appeal to set aside the said Order. Thereafter the Commissioner (Appeal 1), Central Excise passed

4,025,955 withpenalty and interest

The matter is currently pending before the said Tribunal.

143

an order under Order-in-Appeal No. 146/2007 (Ahd-1) dated March 30, 2007 allowing the appeal made by our Company.Thereafter, Commissioner of Central Excise (Appeal -1), Central Excise has madean appeal to the Customs, Excise & Service Tax Appellate Tribunal under Appeal No. E/809/07-DB dated July 18, 2007.

5. Customs, Excise and Service Tax Appellate Tribunal, WRB, Mumbai

Appeal No. E/2341/2004MUM dated July 26, 2004

Commissioner of Central Excise-I, Ahmedabad Vs. Shanti Processors Limited

SCN was issued by the Additional Director General, DGAE, Zonal Unit, requiring our company to reply against the duty amounting to Rs. 2,989,162 along with interest and penalty and the confiscation of land, building, plant and machinery and other belongs in connection with the excisable goods. Our Company has filed its reply dated December 26, 2002, February 17, 2003 and March 19, 2003 to the said Show Cause Notice. Subsequently an order was passed in favour of our company by Commissioner of Central Excise and Customs, Ahmedabad, to which the Commissioner of Central Excise and Customs , New Delhi has filed an appeal with the Customs, Excise & Service Tax Appellate Tribunal under Appeal No. E/2341/2004- MUM dated July 26, 2004

2,989,162 alongwith penalties and interest

The matter is currently pending before the said Tribunal.

6. Deputy Commissioner of Service Tax, Division-II, Ahmedabad

Show Cause Notice F. No. SD-02/110/GTA/ Chiripal/ 0708 dated January 17, 2007

Deputy Commissioner of Service Tax, Division- II, Ahmedabad Vs. Chiripal Industries Limited

Our Company has filed a reply dated February 13, 2007 to the SCN in respect of Rs. 353,122 paid as Service Tax for the month of May 2007 to September 2007 payable on the goods transport agency from the Cenvat Credit Account.

353,122 Matter is closed as Order in Original F.No. SD-02/ 110/GTA/CHIRIPAL/07-08 DT. 7.4.2010.

7.

The Customs, Excise and Service Tax Appellate Tribunal

Appeal no. E/1276/09

Commissioner of Central Excise, Ahmedabad – 1 Vs. Chiripal Industries Limited

A show cause notice was issued by the Additional Commissioner, Central Excise Ahmedabad I, dated September 1, 2008, to show cause as to why cenvat credit of Rs. 1,910,807 against National Calamity Contingent duty should not be disallowed and why National Calamity Contingent duty of Rs. 1,910,807, along with interest and penalty should not be recovered. Our Company has filed a reply dated September 29, 2008 to the Addl Commissioner, Central Excise, Ahmedabad – I, stating therein that Cenvat credit of basic excise duty could be utilized to pay National Calamity Contingent duty and that there was no restriction on utilizing credit of basic excise duty for discharging the National Calamity Contingent duty. Further, the levy of interest and penalty was not maintainable. The Addl Commissioner of Central Excise, Ahmedabad I, vide Order-In-Original issued on January 7, 2009 bearing F. No. V.54/15237/Chiripal OAI/DivIV/0809 disallowed the amount of Rs. 1,910,807 paid under protest from the Cenvat credit account against NationalCalamity Contingent duty and further confirmed the demand of Rs. 1,910,807 against National Calamity Contingent duty to be recovered from the Company. Further, interest to be recovered at the prescribed rate and imposed penalty of Rs. 20,000 on the Company. The Company, being aggrieved by the Order-in-Original of the Additional Commissioner of

1,910,807

Cestat Appeal No. E/1276/2009 dated 24.7.2009 PH Fixed Awaiting for order,

144

Central Excise, Ahmedabad I, dated December 31, 2008, filed an appeal. The Commissioner (Appeals-I), vide an Order-In-Appeal no. 98/2009(Ahd-I)CE/ID/Commr(A)/Ahd dated May 27, 2009 set aside the Order-in-Original dated January 7, 2009 with consequential benefits. The Commissioner, Central Excise, Ahmedabad – I, filed an appeal before the Customs, Excise and Service Tax Tribunal, Ahmedabad order of the Commissioner (Appeals) – I dated May 27, 2009. therein praying (i) that the impugned Order-In-Appeal dated May 27, 2009 be set aside; (ii) that the Tribunal may be pleased to hold that the National Calamity Contingent duty had been correctly paid and that the payment under protest was without any basis being aggrieved by the; (iii) to stay the operation of the Order-In-Appeal dated May 27, 2009 during the pendency of the appeal proceedings, as it involved refund of huge amount of revenue; and (iv) any other orders as may be deemed fit and proper.


Appeal bearing number E/270/08 dated April 16, 2008

The Commissioner, Central Excise, Ahmedabad I Vs. Chiripal Industries Limited

The Commissioner, Central Excise, Ahmedabad, has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, against the Order-In-Appeal no. 329/AI/2007 (Ahd-I) dated December 27, 2007, issued on January 2, 2008 passed by the Commissioner of Income Tax (appeals) –I, Central Excise. The matter pertains to alleged wrong utilization of cenvat credit of Rs. 3,977,697 being duty paid on perlite rigid insulation, moly kote, etc. The said appeal has been filed praying to set aside the aforesaid Order-In-Appeal and for a suitable order confirming the duty evaded alongwith interest and penalty.

3,891,104

Cestat Appeal No. E/270/08 dated 16.04.2008. Awaiting for personal Hearing.

145

9. High Court of Gujarat at Ahmedabad

Tax appeal no. 326 of 2009

Commissioner of Central Excise, Ahmedabad – I Vs. Priti Processors Limited

The Commissioner of Central Excise, Ahmedabad – I preferred the present appeal being aggrieved by the common order no. M/14001405/WZB/ AHD/08dated November 27, 2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad in application no. E/COD/918-923 OF 2008 and in appeal no. E/11511156 of 2008. The said appeal is filed on the grounds that if an order passed by the authority was not challenged and therefore it had acquired finality and could not have been challenged alongwith the order refusing refund and there would be further delay, which could not have been condoned by CESTAT. Since Priti Processors Limited had nt challenged the Annual Capacity of Production fixed by the Commissioner, therefore the same acquired finality and therefore the order dated November 27, 2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad required to be set aside. The Commissioner of Central Excise, Ahmedabad – I, has prayed: (i) that the appeal be admitted and allowed; (ii) for framing of substantial questions of law as enumerated therein for the consideration of the Court and/or frame any other substantial questions of law as may be deemed fit; (iii)to quash and set aside order no, M/14001405/WZB/AHD/08 passed by the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad in application no. E/COD/918-923 of 2008 and in appeal no. E/1151-1156 of 2008; (iv)pending the admission, hearing and the final disposal of the appeal, stay the impugned order and be further pleased to stay the further proceedings pending before the Customs, Excise and Service Tax Appellate Tribunal,; (v) cost of the appeal; and (vi)any other and further relief necessary. The High Court of Gujarat, vide order dated July 13, 2009 granted stay in the proceedings for one month.

762,652 The matter is pending before the High Court of Gujarat at Ahmedabad

146

10. Deputy Commissi oner of Service Tax Division -II, Ahmedaba d

Show cause notice bearing F. No. SD. 02/16/GTA/C hiripal/SCN/ 08-09 dated June 11, 2008

Deputy Commissioner of Service Tax Division -II, Ahmedabad Vs. Chiripal Industries Limited

A Show Cause Notice was issued by the Deputy Commissioner, Service Tax, Division II, Ahmedabad I, dated June 11, 2008, to show cause as to (i) service tax amounting to Rs. 432,556 should not be demanded and recovered; (ii) tax credit for Rs. 432,556 utilised by the Company towards payment of service tax should not be disallowed as it is not admissible towards the payment of tax as per Rule 3 read with Rule 14 of the Cenvat Credit Rules, 2004; (iii) interest on service tax amount of Rs. 432,556 should not be recovered; (iv) penalty should not be imposed for failure to pay tax on time; (v) penalty should not be imposed for contravention of Rule 3 of the Cenvat Credit Rules, 2003. Our Company has filed a reply dated June 18, 2008 to the Deputy Commissioner of Service Tax, Division II, Ahmedabad, stating that it has been unreasonably alleged in the show cause notice that service tax amounting to Rs. 432,556 is short paid or not paid, however the same was paid through the cenvat credit account. Further, the penalty was wrongly imposed and the Company is not liable to pay any penal liability

432,556 SCN DROPPED as per Order in Original No. F.No. SD-02/110/GTA/CHIRIPAL/07-08 dated 26.4.2010.

11. Assistant Commissioner of Service Tax Division II, Ahmedabad

Show cause notice bearing F. No. SD. 02/16/GTA/C hiripal/SCN120/08-09 dated May, 2009

Assistant Commissioner of Service Tax Division -II, Ahmedabad Vs. Chiripal Industries Limited

A Show Cause Notice was issued by the Assistant Commissioner, Service Tax, Division II, Ahmedabad I, dated May, 2009, to show cause as to (i) an amount of Rs. 153,966 paid through PLA should not be disallowed; (ii) service tax amounting to Rs. 153,966 short paid/not paid should not be demanded and recovered; (iii) interest on service tax amount of Rs. 153,966 should not be recovered; and (iv) penalty should not be imposed for failure to pay tax on time Our Company has filed a reply dated June 11, 2009 to the Deputy Commissioner of Service Tax, Division II, Ahmedabad, stating that it has been unreasonably alleged in the show cause notice that service tax amounting to Rs. 153,966 is short paid or not paid, however the same was paid through the cenvat credit account. Further, it has been stated no penalty is imposable, as proposed in the show cause notice.

153,966 Appeal before OIO filed with Commissioner (Appeals) dated 16.04.2010, PH Hearing 11.06.2010, This matter is pending for Adjudication for Commissioner (Appeals) Ahmedabad.

147

Labour Cases:

1. - Notice dated September 2, 2009

Indrajit Dinesh Patel Vs. Chiripal Industries Limited

A notice was issued in respect of the accident which occurred on June 5, 2008 and death on June 16, 2008 in the factory premises. The Company provided medical treatment of approximately Rs. 180,000 and cash help of Rs. 67,600.

- The Insurance companyhas given a letter datedAugust 25, 2009 thatMr. Indrajit Patel dieddue to AIDS (HIV).

No Change 2. Labour

Court, Ahmedabad

T-App. No. 157/2008

Vishnu Narayan Pawar v/s. Manager, Chiripal Industries Limited.

Vishnu Narayan Pawar worked as a helper in the workshop of the Company. He has filed the present application under Bombay Industrial Relations Act, for termination from October 1, 2008, which was without prior notice and procedure, by verbal order. Vishnu Narayan Pawar has claimed reinstatement with back wages.

13,171 Case is in compromise stage with Union Advocatedt.25.4.’11.

3. Labour Court,

Ahmedabad

T-App. No. 149/2008

Babulal Devilal v/s. Manager, Chiripal Industries Limited.

Babulal Devilal worked as a fitter in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from October 1, 2008, without any prior notice and procedure by verbal order. Babulal Devilal has claimed reinstatement with back wages of Rs. 18,062. The Company has filed its reply dated October 14, 2008, October 31, 2008 and November 03, 2008 and has asked Babulal Devilal to resume duty.

13,159 Case is in compromise stage with Union Advocatedt.25.4.2011.

4.. Labour Court, Ahmedabad

T-App. No. 153/2008

Rasikbhai Prahladbhai Patel v/s. Manager, Chiripal Industries Limited.

Rasikbhai Prahladbhai Patel worked as a fitter in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from October 1, 2008, without any prior notice and procedure by verbal order, Rasikbhai Prahladbhai Patel has claimed reinstatement with back wages.

15,184 Case is in compromise stage with Union Advocatedt.25.4.2011..

5. Labour Court,

Ahmedabad

T-App. No. 159/2008

Kirtansingh Mulsingh Rathod v/s. Manager, Chiripal Industries Limited.

Kirtansingh Mulsingh Rathod worked as a fitter in the workshop of the Company. Kirtansingh Mulsingh Rathod filed an application under Bombay Industrial Relations Act, for termination from October 1, 2008, without any prior notice and procedure by verbal order, Kirtansingh Mulsingh Rathod has claimed reinstatement with back wages amounting to Rs.20,509.

12,531 Case is in compromise stage

with Union Advocatedt.25.4.2011

.

148


T-App. No. 31/2009

Manhar Ambalal Vyas v/s. Manager, Chiripal Industries Limited

Manhar Ambalal Vyas worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Manhar Ambalal Vyas has claimed reinstatement with back wages amounting to Rs. 48,150.

48,150 The case is pending. The next date of hearing is 30.5.2011

7. Labour Court,

Ahmedabad

T-App. No. 26/2009

Bhanu M Patel v/s. Manager, Chiripal Industries Limited.

Bhanu M Patel worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Bhanu M Patel has claimed reinstatement with back wages amounting to Rs. 50,232.

50,232 The case The case is pending. The next date of hearing is 30.5.2011.


T-App. No. 32/2009

Manhar P. Darbar v/s. Manager, Chiripal Industries Limited.

Manhar P. Darbar worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Manhar P. Darbar has claimed reinstatement with back wages amounting to Rs. 32,200.

32,200 The case is pending. The next date of hearing is 30.5.2011.


T-App. No. 28/2009

Chandrakant Jayantibhai Parmar v/s. Manager, Chiripal Industries Limited.

Chandrakant Jayantibhai Parmar worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Chandrakant Jayantibhai Parmar has claimed reinstatement with back wages amounting to Rs.48,150.

48,150 The case is pending. The next date of hearing is 30.5.2011.

10.

Labour Court,

Ahmedabad

T-App. No. 29/2009

Naveen Jayantilal Parmar v/s. Manager, Chiripal Industries Limited.

Navneet Jayantilal Parmar worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Navneet Jayantilal Parmar has claimed for reinstatement with back wages.

48,150 The case is pending. The next date of hearing is 30.5.2011..

149

11. Labour Court,

Ahmedabad

T-App. No. 162/2008

Murari Prasad Patel v/s. Manager, Chiripal Ind.

Limited.

Murari Prasad Patel was working as a helper in the workshop of the Company. He has filed the present application under Bombay Industrial Relations Act, for termination from October 1, 2008, without any prior notice and procedure, by verbal order, Murari Prasad Patel has claimed for reinstatement with back wages of Rs.14,721.

11,000 Case is in compromise stage with Union Advocatedt.25.4.2011.

12.

Labour Court, Ahmedabad

T-App. No. 160/2008

Rajesh Chaudhry v/s. Manager, Chiripal Industries Limited.

Rajesh Chaudhry worked as a fitter in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from October 1, 2008, without any prior notice and procedure by verbal order, Rajesh Chaudhry has claimed for reinstatement with back wages amounting to Rs.14,721.

11,000 Case is in compromise stage with Union Advocatedt.25.4.2011..

13.


T-App. No. 12/2009

Kanubhai Virambhai Desai v/s. Manager, Chiripal Industries Limited.

Kanubhai Virambhai Desai worked as a driver of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 21, 2008, without any prior notice and procedure by verbal order, Kanubhai Virambhai Desai has claimed for reinstatement with back wages.

15,000 The case is pending. The next date of hearing is 4/5/2011

14 Labour Court, Ahmedabad

T-App. No. 27/2009

Vinod Ishwarbhai Parmar v/s. Manager, Chiripal Industries Limited.

Vinod Ishwarbhai Parmar worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Vinod Ishwarbhai Parmar has claimed for reinstatement with back wages amounting to Rs. 32,200.

32,200 The case is pending. The next date of hearing is 30.5.2011

15.

Labour Court,

Ahmedabad

T-App. No. 16/2009

Pradeep Dayashanker Mehta v/s. Manager, Chiripal Industries Limited.

Pradeep Dayashanker Mehta worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Pradeep Dayashanker Mehta. The Company, as per the order of the Labour Court paid Rs.10,000 to the workers and the company offered him employment.

- The matter is pending. The next date of hearing is 26.4.2011

150

16. Labour Court,

Ahmedabad

T-App. No. 30/2009

Hemant R. Parmar v/s. Manager, Chiripal Industries Limited.

Hemant R. Parmar worked as a knitting machine operator in the workshop of the Company. He filed an application under Bombay Industrial Relations Act, for termination from December 14, 2008, without any prior notice and procedure by verbal order, Hemant R. Parmar has claimed for reinstatement with back wages.

42,600 The matter is pending. The next date of hearing is 30.5.2011


Application no. 648/08

Mohan Parmar and three others Vs. Chiripal Industries Limited

Mohan Parmar and others have filed an application dated November 26, 2008 in respect of claiming backwages, praying that the amount of Rs. 292,993 be paid to them as back wages, the costs of the application and any other order as may be deemed fit. Three applicants have settled the matter and only the application by Mohan Parmar is pending.

292,993 The matter is pending. No change

Cases filed by Chiripal Industries Limited

Income Tax matters:

Sr. No. Forum Case No. Parties to

proceedings Brief particulars Quantum

(Rs. approx.)

Current Status

1. Commissioner of Income Tax (Appeals)

Appeal dated January 29, 2009

Chiripal Industries Limited Vs. Assistant Commissioner of Income Tax, (OSD), Range – 1, Ahmedabad

The Assistant Commissioner of Income Tax (OSD), Range -1, Ahmedabad vide notice of demand dated February 26, 2008 issued to the director/principal officer of our Company under section 142(1) of the Income Tax Act, 1961, and sought information and particulars pertaining to bank account and other details. The Assistant Commissioner of Income Tax (OSD), Range -1, Ahmedabad vide notice of demand and assessment order dated December 30, 2008 demanded an amount of Rs. 367,509 from our Company for the Assessment Year 2006-2007, wherein penalty proceedings were initiated for concealing particulars of income. Our Company filed an appeal before the Commissioner of Income Tax (Appeals), against the Assessment Order of the Assistant Commissioner of Income Tax, on the grounds that the Assessing Officer had erred in not considering the revised return of income, had further erred in not granting depreciation on branch assets, erred in making addition to the returned income on account of short term capital gain, and making addition for income from house property, charging interest of and initiating

367,509 The matter is pending with Income-Tax Appellant Tribunal., Ahmedabad Dt..14/12/2010

151

penalty proceedings. Our company has addressed a letter dated January 28, 2009, to the Assistant Commissioner of Income Tax, Range 1, for rectification of mistake under section 154 in respect of additional TDS certificate of Rs. 234,167 found on record which remained to be submitted at the time, and the income reflected in the TDS certificate had been considered in the audited accounts for the assessment year 2006-07.

2. Income Tax Dept

CIT Appeal Chiripal Industries Ltd

Vz. Income Tax

(A.Y2008-09)


Rs.258526/- Rs.924000/- Rs.163283/- Rs.168000/-

Rs..975140/-

Case Pending at CIT Apppeal and

rectification filed for refund.

Excise Matters:


proceedings Brief particulars Quantum (Rs. approx.)

Current Status

1. Customs, Excise andService TaxAppellate Tribunal, Ahmedaba d

Appeal No. 8/577/07 of 2007 dated May 23, 2007

Chiripal Petrochemicals Limited Vs. Commissioner of Central Excise (Appeals-I), Ahmedabad.

The Additional Commissioner of Central Excise, Ahmedabad issued two SCN’s bearing number V.54/15-9/Demand/Chiripal/2005 dated August 1, 2005 and V.54-60/15-52/Demand/Chiripal/ 05-06 dated February 23, 2006 to our Company* to recover amounts for the period July, 2004 to June, 2005 and July, 2005 to December, 2005, to which our Company replied vide letters dated September 12, 2005, December 30, 2005 and March 29, 2006 respectively. Upon hearing, the Additional Commissioner passed OYO no. 33 and 34/ ADDITIONAL COMMISSIONER/2006 dated November 20, 2006(issued on November 22, 2006) confirming the demands Rs. 3,446,772 and Rs. 2, 577,665 for the said time period. The Additional Commissioner also confirmed liability under Section 11AB of the Central Excise Act on the said amounts. Our Company filed an appeal before the Commissioner (Appeals), Ahmedabad bearing NO. 24/Ahd-1/2007 which was rejected vide OIA no. 78/2007. Our Company hence filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad vide Appeal No. 8/577/07 of 2007 dated

3,446,772 and

2,77,665

Cestat Appeal No. E/577/07 Dtd. 23.05.2007 Awaiting for Personal Hearing

152

May 23, 2007 appealing that Order-In-Appeal No. 78/2007 (AHD-1) dated February 27, 2007 passed by the Commissioner of Central Excise(Appeals-1), Ahmedabad may be set aside with consequential benefits.


Appeal no. E/1165/07

Chiripal Industries Limited Vs. Commissioner of Central Excise (Appeal s), Ahmedabad.

Show Cause Notice F. No. 54/03-28/07-08/Div-IV/DA dated December 19, 2007 was issued by the Joint Commissioner of Central Excise with a proposal to confirm and adjust an amount under protest of Rs. 1,413,366 which had already been deposited by our Company at the Excise Department. Our Company filed a reply dated January 5, 2007 to the Joint Commissioner of Central Excise. The Joint Commissioner has passed OIO 55/JOINT COMMISSIONER/2007 dated April 12, 2007(issued on April 13, 2007) confirming the demand of the said amount in protest and confirmed interest liability under Section 11AB of the Central Excise Act on the said amount under protest. Our Company filed an appeal before the Commissioner (Appeals), Ahmedabad, against the order of the Joint Commissioner of Central Excise. The Commissioner(Appeals), Ahmedabad thereafter passed OIA No. 298/2007(AHD-1) dated August 31, 2007(issued on September 12, 2007) dismissing the appeal filed by our Company. Our Company filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad for setting aside the said order with consequential benefits.

1,413,366 along with interest

Cestat Appeal No. E/1165/07 dated 06.12.2007. Awaiting for Personal Hearing

3.

Government of India,Ministry ofFinance, Department of Revenue,New Delhi

Revision Application F. No. 195/99/08-RA

Chiripal Industries Limited Vs. Assistant Commissioner of Central Excise, Division-IV, Ahmedabad – I.

SCN was issued by the Assistant Commissioner of Central Excise with a proposal to reject the rebate claims of Rs. 923,496. Our Company filed a reply dated June 18, 2007 to the Assistant Commissioner of Central Excise. Thereafter, the Assistant Commisssioner has passed OIO 181-182/07-R dated July 9, 2007 rejecting the rebate claims under Rule 18 read with Section 11B of the Central Excise Act. Our Company filed an appeal bearing No. 231 of 2007 before the Commissioner of Central Excise (Appeals), Ahmedabad, against the order of the Assistant Commissioner of Central Excise for setting aside the said order with consequential benefit of

923,496 The appeal is pending before the Government of Pending with GOI, MOF, India

153

granting rebate of Rs. 923, 496 and interest thereon. The Commissioner of Central Excise (Appeals), Ahmedabad vide Order-In-Appeal dated December 27, 2007 bearing number 328/AI/2007(Ahd-I) rejected the appeal on the ground that the applicant had imported two consignments of Polyester Filament Yarn which were not fit for use in the manufacture of final goods and hence, the goods were re exported, therefore the goods exported were not excisable as required for availing rebate claim and also stated that granting of rebate would result in double benefit. Our Company filed a revision application bearing F. No. 195/99/08-RA before Government of India, Ministry of Finance, Department of Revenue, New Delhi for setting side the Order-In-Appeal dated December 27, 2007 bearing number 328/AI/2007(Ahd-I) with consequential benefits of granting rebate of Rs. 923, 496/- and interest thereon and for any further reliefs that may be granted.

4. The Customs, Excise and Service Tax Appellate Tribunal

Appeal EA – 1 no. 1493 of 2009

Chiripal Industries Limited Vs. Commissioner (Appeals) Central Excise, Ahmedabad

Our Company filed an appeal bearing No. 1493 of 2009 before the Customs, Excise and Service Tax Appellate Tribunal, against the OIA No. 221/2009(Ahd-I)CE/CMC/ Commr(A) dated September 3, 2009, which upheld the order of the Assistant Commissioner, Central Excise, Div-IV, Ahmedabad – I dated May 4, 2009 wherein cenvat credit to the tune of Rs.485,917 was disallowed and duty was confirmed and penalty of Rs. 485,917 was imposed. Our Company also filed a stay application bearing appeal no. E/1606 of 2009 praying that the OIA no. 221/2009(Ahd-I) CE/CMC/Commr(A), issued on September 3, 2009 and/or pass suitable orders waiving requirement of pre-deposit of balance duty, interest and penalty till final disposal of the appeal and any other order, as deemed fit. The Customs, Excise and Service Tax Appellate Tribunal vide an order dated October 26, 2009, waived the pre-deposit of interest and penalty and stay petition was allowed during the pendency of the appeal.

485,917 Awaiting for personal Hearing.

154

Sr. No.

Forum Case No. Parties to proceedings Brief particulars

Quantum (Rs.appx.) Current Status

5. Government of India,Ministry ofFinance, New Delhi

Revision Application bearing F.NO.195/4 3/RA

Chiripal Industries Limited Vs. Commissioner of Central Excise, Ahmedabad

Our company filed a Revision application bearing no. F.NO. 195/43/RA before the Government of India, Ministry of Finance, New Delhi to (i) set aside the impugned Order-In-Appeal no. 306 to 316/07 (Ahd) with consequential benefits, including a declaration that payment of National Calamity Contingent duty by utilizing Cenvat and rebate of such Cenvat utilized for paying National Calamity Contingent duty was in accordance with law; and (ii) any further relief as may be deemed fit in the facts and circumstances of the case.

- The matter is pending before the Government of India, Ministry of Finance, New Delhi

6. Customs, Excise and Service Tax Appellate Tribunal, Ahmedaba d

Miscellaneo us application for early hearing no. 972 of 2009 in appeal no. E/655 of 2009

Shanti Processors Limited Vs. Commissioner, Central Excise, Ahmedabad – I

An appeal was filed before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, against the order of the Commissioner of Central Excise, Ahmedabad, dated January 29, 2009 bearing order in original no. 5-7/Commissioner/2009, which confirmed the duty of Rs. 12,979,625 and imposed a penalty of Rs. 12,979,625. The appeal was filed praying that the impugned order may be set aside with consequential benefits and any other and further relief that may be deemed fit. A Stay application was also filed in the matter, praying that the condition of pre-deposit of the amounts of duty and penalty for entertaining the appeal on merits may be waived and stay against the recovery of the same during the pendency of the appeal may be granted, alongwith any other and further relief. The Commissioner, Central Excise, Ahmedabad – I, filed an early hearing application before the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, against the Order in Original no. 0507/Commr/09 dated January 20, 2009,. The order pertains to three show cause notices bearing nos. V.52/3-104/0304/Div.IV/ DA dated July 3, 2003, V.52/3-104/0304/Div.IV/ DA dated August 1, 2003 and V.52/3-104/0304/Div.IV/ DA dated August 22, 2003. The Company has filed the application praying that as the amount involved in the case is Rs. 12,979,625, the tribunal may be pleased to grant an early hearing. The Customs, Excise and Service Tax Appellate Tribunal vide order dated August 3, 2009 bearing no. S/1124/wzb/ahd/2009 dated August 03, 2009, granted an unconditional stay in the appeal bearing no. E/655 of 2009.

12,979,625 The matter is pending with CESTAT

155

7. The Commissi oner, Central Excise, (Appeals – I) Ahmedaba d

Appeal bearing number MP/03/DA/ 2008-09

Priti Textiles Vs. Commission (Appeals), Vs. Priti Textiles.

An appeal bearing no. MP/03/DA/08-09 and stay application bearing no. 09/2009 was filed before the Commissioner (Appeals-I), Central Excise, Ahmedabad against the Order-In-Original no. MP/03/DA/08-09 dated May 8, 2009, of the Assistant Commissioner, Central Excise, Division IV, Ahmedabad – I. Priti Textiles had filed refund claim of Rs. 367,822 on September 28, 1998 arising out of the order in appeal no. 1114/99 dated July 23, 1999, passed by the Commissioner (Appeals), Ahmedabad, which was sanctioned by the Deputy Commissioner Central Excise Division VI, Ahmedabad vide OIO No.327/MP/99-Ref dated November 25, 1999. Further, the department filed an appeal and stay application before Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad on October 26, 1999 against the aforesaid order of the Commissioner (Appeals). The Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, vide its order no. A/282/C-4/WZB/04 dated May 17, 2004 remanded the matter back to the adjudicating to authority for denovo consideration. The matter pertains to alleged wrong utilization of cenvat credit of Rs. 3,977,697 being duty paid on perlite rigid insulation, moly kote, etc. The present appeal has been filed praying to set aside the aforesaid Order-In-Appeal and for a suitable order confirming the duty evaded alongwith interest and penalty. The Commissioner, (Appeals-I) vide order dated October 5, 2009, directed Priti Textile to deposit 25% of the duty amount confirmed in the impugned Order-In-Original no. MP/03/DA/08-09 dated May 8, 2009, as pre-deposit and report compliance within 3 weeks on receipt of the order. Upon pre-deposit of the amount directed, the remaining amount under the impugned order was waived and stay against recovery of the same was granted till final decision, and accordingly the stay application was disposed off The Commissioner (Appeals – I), Central Excise, Ahmedabad, vide order dated December 8, 2009, held the refund sanctioned to be erroneous and confirmed the protective demand raised and directed recovery alongwith interest under section 11A and 11AB of the Central Excise Act, 1944.

367,822 passed the final order. We had deposited 25% amount of Rs.3,67,822.00 i.e Rs.91,956.00

156

Potential litigation:



Current Status

1. Joint Commissi oner Excise Ahmedab ad – I

Show Cause Notice F. No. V-54-60/15-31/Deman d/OA--I/Chiripal/ 06-07/1318 dated June 2, 2006

Joint Commissioner Excise Ahmedabad – I Vs. Chiripal Petrochemicals Limited

SCN was issued by the Joint Commissioner Excise requiring our Company* to state the reasons for not to demand and recover Central Excise duty of Rs. 1,263,741/, penalties under Rule 25 and 27 of The Central Excise Rules, 2002 and interest on duty under Section 11AB of The Central Excise Act, 1944. Our Company has filed a reply dated July 15, 2006 to the Joint Commissioner ofCentral Excise, requesting him to withdraw the demand of the said amount along with proposals of imposition of penalty and recovery of interest

1,263,741 along with penalties and interest

The Joint Commissione r, Central Excise, Ahmedabad – I vide order dated December 15, 2009 dropped the proceedings initiated against the Company

Litigation of Nandan Exim Limited Litigation filed against Nandan Exim Limited SEBI matter

Income tax cases

Sr. No. Forum Case

No.


Brief particulars Quantum (Rs.


1. The Deputy Commissioner of Income Tax, Circle-5, Ahmedabad

Appeal No. [•] of [•]

Deputy Commissioner of Income Tax Range -5, Ahmedabad Vs Nandan Exim Limited

Commissioner of Income Tax (Appeals), Ahmedabad-I vide order dated January 16, 2009 partly allowed the appeal stating that disallowance of Rs.1311,030. The Deputy Commissioner of Income Tax, Circle-5, Ahmedabad filed an appeal bearing number 936/Ahd/09 before the Income Tax Appellate Tribunal, Ahmedabad. TheDeputy Commissioner of Income Tax, Circle -5, Ahmedabad vide notice of demand dated November 23, 2009 issued a fresh notice for the assessment year 2005-2006 for nil amount

Nil The matter is pending with Appelant Tribunal Appeal No.601/ Ahd – 2011.

Central Excise, Customs, Service Tax and DGFT Law:

Sr. No. Forum Case No.


Brief particulars Quantum

(Rs. approx.)

Current Status

1. Assistant Commissioner Central Excise, Ahmedabad -1

Show cause notice bearing No.F. V-54/18-230/2007R-Part-I1716 dated November 14, 2007

Assistant Commissione r Central Excise, Ahmedabad 1 Vs. Nandan Exim Limited

The Assistant Commissioner Central Excise, Division – IV, Ahmedabad -1 issued a SCN to Nandan Exim Limited in respect of recovery of rebate claim amounting to Rs. 514,545 and recovery of interest under Section 11AB of Central Excise Act, 1944. Nandan Exim Limited replied to the said show cause notice by a letter dated November 21, 2007 denying the allegations and averments in the said Show Cause Notice.

514,545 along with interest

The matter is pending hearing before the Assistant Commissioner Central Excise, Division – IV, Ahmedabad -1.

157

2. Government of India, Ministry of Finance, Department of Revenue, New Delhi

- Commissioner of Central Excise, Ahmedabad – I Vs. Nandan Exim Limited

The Assistant Commissioner of Central Excise, Division – IV, Ahmedabad –I, under the authority of the Commissioner of Central Excise, Ahmedabad –I, before the Joint Secretary, Government of India, Ministry of Finance, Department of Revenue (RA Unit), has filed a revision application, praying to quash and set aside the Order-In-Appeal dated November 28, 2008 bearing number 203205/2008(Ahd-I)/CE/ID/Commr(A), which allowed three appeals with consequential benefit of rebate and set aside all the three orders-inoriginal bearing nos. 146/2008-Reb dated July 28, 2008, 181/2008-Reb dated August 08, 2008, and order bearing no. 240/2008-Reb dated September 18, 2008, passed by the Assistant Commissioner, Central Excise, Division – IV, Ahmedabad – I, and has prayed for suitable order to be passed for recovering the rebate if disbursed, as per the Order-in-Original with interest as per section 11AB of the Central Excise Act, 1944. Nandan Exim Limited vide letters dated April 2, 2009 and May 11, 2009 addressed to the Joint Secretary (RA Unit), Government of India, Ministry of Finance, Department of Revenue have prayed for the dismissal of the revision application filed by the Commissioner of Central Excise, Ahmedabad –I, and to direct the Assistant Commissioner of Central Excise, Division – IV, Ahmedabad –I, to pay rebate with interest by cheque only.

1,652,399 The matter is pending before the Government of India, Ministry of Finance, Department of Revenue, New Delhi. Hearing over, order pending

Litigations filed by Nandan Exim Limited

Income tax cases

Sr. No.

Forum Case No.


Brief particulars

Quantum (Rs.


1. Commissioner of Income

Tax (Appeals

) –XI, Ahmeda

bad

CIT(A)-LI/453-ITNS/0

809

Nandan Exim Limited Vs. Assistant Commissioner of Income Tax (OSD), Range -5, Ahmedabad

The Assistant Commissioner of Income Tax, Ahmedabad issued a Notice of demand and Assessment order both dated May 30, 2008 in respect of assessment year 2006-07 for a sum of Rs. 1,237,447. Nandan Exim Limited filed an appeal before the Commissioner of Income Tax (Appeals) – XI, Ahmedabad, praying for deletion of the disallowance of Rs. 1,311,030 under Section 14A of the Income Tax Act, 1961, for deletion of disallowance of claim of depreciation on motor car amounting to Rs. 256,688, for deletion of interest and penalty levied.

1,237,447 Appeal partly

allowed vide order

dated 24/11/2010

2. Income Tax Dept..

CIT(A)-XI/160/10-11 order dt.31.5.11

Nandan EximLtd Vs. Income Tax, Circle – 5 (A.Y2007-08)

Assessment Order Passed U/S143(3) & disallow 1. Rs.1311030/- 1. Rs.444218/- 2. Rs.456996/-

- Dy.CIT Filed ITATAppeal No.2419.Ahd-2010 on28.7.2010

158

2 Income Tax Dept

CIT-Appeal

Nandan Exim Ltd Vs. Income Tax, Circle – 5 (A.Y2007-08)

Penalty Order U/s 271(1) © dt.20.10.2010 Rs.153824/- Case pending at CIT Appeal.

3. Income Tax Dept

CIT-Appeal

Nandan Exim Ltd Vs. Income Tax, Circle – 5 (A.Y2009-10)

Assessment Order Passed U/S143(3) & disallow 1. Rs.3937981/-- Rs.1024692/- Rs.5976398/- Rs.526962/-

Rs.5082184/-

Case pending at CIT Appeal.

Central Excise, Customs, Service Tax and DGFT Law:

Sr. No.

Forum Case No.


Brief particulars

Quantum (Rs.


1. Under Secretary, (R.A Unit), Government of India, Ministry of Finance, Department of Revenue

- Nandan Exim Limited Vs. Commissioner of Central Excise, Ahmedabad –I

Nandan Exim Limited has filed an appeal praying to set aside the impugned order bearing no. 212/2009(Ahd-I)CE/CMC/Commr/(A)/ Ahd dated August 28, 2009 and the Order-In-Original dated January 30, 2009 bearing number 312/2008-R of the Assistant Commissioner of Central Excise, Division – IV, Ahmedabad – I, and to direct the Assistant Commissioner of Central Excise, Division IV, Ahmedabad-I to pay rebate of Rs. 422,834 with interest, by cheque only and pass any other order/direction, as deemed fit..

422,834 Hearing over. Order pending

2. ESIC 49/2010

ESIC vs. Nandan Exim Ltd.

N.A Last hearing date was 30/01/2011, attended by corporate office

3. Bonus Act.

3954/2010

G L O vs. Nandan Exim Ltd.

N.A. N.A ( lawyer Mr. K.S. Patel has been engaged by corporate office) Last hearing date was 27/02/2011

159

4. Labor court

184/2010

Gopal Kumar Shah vs. Nandan Exim Ltd.

Case of reinstatement 5000/- Last hearing was 16/03/2011, appeared by Mr. Vipeen Patel from NEL HR. Next date yet not rec’d. Written statement is to be filed.

Litigations of Vishal Fabrics Private Limited Filed against Vishal Fabrics Private Ltd.

Sr. No.

Forum Case No.


Brief particulars Quantum (Rs.

approx.)

Current Status

1 Income Tax Dept

CIT Appeal

Vishal FabricsPvt

Ltd Vz. Income

Tax (A.Y2006-07)

Assessment Order Passed U/S143(3) & disallow Rs.400000/- & 80IA Claim

Rs.1685460/-

Case Pending at

CIT Apppeal

and Rectification filed for refund.

2 Income Tax Dept

CIT Appeal

Vishal Fabrics Pvt Ltd

Vz. Income Tax

(A.Y2008-09)

Assessment Order Passed U/S143(3) & disallow 80IA Claim

Nil- Case Pending at CIT

Apppeal

Labour cases

Sr. No.

Forum Case No.


Brief particulars


Current Status

1. Labour Court Ahmedabad

Application No.11/2005 dated January 31, 2005

Mr. Mahendra Kashiram Lodha Vs. Vishal Fabrics Private Limited

Mr. Mahendra Kashiram Lodha has filed a case against Company for reinstatement with back wages. The company made a written submission dated December 6, 2005 before the court. Rs.0.50 lacs

0.50 lacs The application is still pending before the Honourable Labour Court.

160

Cases Filed by Vishal Fabrics Private Limited Excise cases

Sr. no. Foru

m Case no.

Parties to the proceeding

Brief particulars


Current status


Appeal bearing and stay application bearing no. -of 2009

Vishal Fabrics Private Limited Vs. The Commissioner of Central Excise, Ahmedabad – I

Vishal Fabrics Private Limited filed an appeal before the Customs, Excise, Service Tax Appellate Tribunal, Ahmedabad, against the order of the Commissioner, Central Excise, Ahmedabad –I, dated January 20, 2009 bearing number 34/Commissioner/2009, and a stay application. The said appeal has been filed against the impugned order which confirmed the duty of Rs. 10,927,213 along with interest under Section 11AA and Section 11AB of the Central Excise Rules, 2002 and imposed penalty of Rs. 10,927,213 on Vishal Fabrics Private Limited, originating out of show cause notices bearing no.V-52/3-141/0304/Div.IV/DA, dated June 6, 2003 and Show Cause Notice bearing No.V-52/3-141/0304/Div.IV/DA dated June 6, 2003. Vishal Fabrics Private Limited has filed the said stay application praying that the condition of pre-deposit of the amounts of duty and penalty for entertaining the appeal on merits may be waived and stay against the recovery of the same during the pendency of the appeal against the Order in Original No. 34/Commissioner/2009 dated January 20, 2009, may be granted in favour of the applicant and any further relief as may be deemed fit. Vishal Fabrics Private Limited has filed the appeal praying that the Order-in-Original no. 34/Commisssioner 2009 dated January 20, 2009 passed by the Commissioner of Central Excise, Ahmedabad-I may be set aside with consequential benefits and any other relief as may be deemed fit.

Duty of Rs.10,927,213 andpenalty ofRs. 10,927,213

The matter ispending before the Customs, Excise,Service Tax Appellate Tribunal Ahmedabad-I.

Textile Committee, Ministry of Textiles.

Sr. No.

Forum Case No.


Brief particulars


Current Status

1. High Court of Gujarat

Appeal before the Tribunal constituted under section 5B of the Textile Committee Act, 1963, filed by Vishal Fabrics Pvt. Ltd against the Textile Committee inspect of notice bearing no. TC/Cess/Sur/20062007/A/c issued by textile Commissioner Govt. Of India Ministry of Textiles Dated 12.12.2005.

Vishal Fabrics Private Limited Vs. The Textiles Committee, Ministry of Textiles

The Textiles Committee, Ministry of Textiles, demanded recovery textile cess of Rs. 1,141,668 from Vishal Fabrics Private Limited vide notice dated December 12, 2005. Vishal Fabrics Private Limited filed an appeal, application for condonation of delay and an application for stay dated January 23, 2007 before the Tribunal constituted under section 5-B of the Textile Committee Act, 1963 against the said Notice. Vishal Fabrics Private Limited preferred a petition in the High Court of Gujarat at Ahmedabad, challenging the order of the Appellate Tribunal dated January 18, 2008 in TCA appeal no. 1 of 2007. The High Court of Gujarat, vide order dated August 28, 2008 summarily rejected the petition on the ground of the Tribunal correctly having held the appeal was barred by limitation. The Supreme Court of India vide order dated August 3, 2009 in petition for special leave to appeal (civil) bearing no. 3190/2009, set aside the judgement of the Gujarat High Court dated August 28, 2008 in Special Civil Application bearing no. 9843/2008 and remitted the matter to the High Court for de novo consideration.

1,141,668 The matter has been remitted to the High Court for de novo consideration.

161

Litigations of Prakash Calendar Private Limited Cases filed against the Company:

Labour Cases:


proceedings Brief particulars Quantum

(Rs. approx.)

Current Status

1. Presiding Recovery Krishna Singh For further details of this case, Officer,


Application No. 2107/2003 Dated December 23, 2003

Ramdev Singh Vs. Vishal Fabrics Private Limited, Prakash Calender Private Limited and Bhushan Processors Private Limited

please refer to case titled “Recovery Application No. 2107/2003 Dated December 23, 2003 Before Presiding Officer, Labour Court, Ahmedabad filed by Krishna Singh Ramdev Singh against Vishal Fabrics Private Limited, Prakash Calender Private Limited and Bhushan Processors Private Limited” under the section titled “Litigations of Vishal Fabrics Private Limited” on page 370 of the Red Herring Prospectus.

2. Income Tax Dept

CIT Appeal PrakashCalenderPvt Ltd

Vz. Income Tax (A.Y2008-09)

Assessment Order Passed U/S143(3) & disallow Rs.3,21,13,810/- Rs.2,31.00,000/-

Paid Amount

Rs.25,00,000

Against Rs.65,69,

990/-

Case Pending at CIT Apppeal

Litigations of Bhushan Processors Private Limited Cases filed against the Company:

Labour cases

Sr. No.

Forum Case No. Parties to proceedings Brief particulars


Current Status

1. Presiding Officer, Labour Court, Ahmedabad

Recovery Application No. 2107/2003 Dated December 23, 2003

Krishna Singh Ramdev Singh Vs. Vishal Fabrics Private Limited, Prakash Calender Private Limited and Bhushan Processors Private Limited

For further details of this case, please refer to case titled “Recovery Application No. 2107/2003 Dated December 23, 2003 Before Presiding Officer, Labour Court, Ahmedabad filed by Krishna Singh Ramdev Singh against Vishal Fabrics Private Limited, Prakash Calender Private Limited and Bhushan Processors Private Limited” under the section titled “Litigations of Vishal Fabrics Private Limited” on page 370 of the Red Herring Prospectus.

2. Income Tax Dept

CIT Appeal Bhushan Petrofils Pvt Ltd Vz. Income Tax (A.Y2007-08)


Rs.76545/- Case Pending at CIT Apppeal

162

Litigations of Shanti Exports Private Limited



Current Status

1. Sales Tax Tribunal

Appeal / 407 / 2010

Sales Tax Department

Deferment Certificate of erstwhile Arunoday Mills Morbi was Cancelled we have filed the appeal against the cancellation of the defferment certificate

NIL Appeal Admitted Stay Granted Next dt. 31.03.2011 For Hearing

2. Sales Tax Tribunal

Appeal / 405 & 406 / 2010

Sales Tax Appeal 2005-06 CST & GST

The Defferement Sales Tax dues of Earstwhile Arunoday Mills Morbi is Challanged in Appeal.

CST - Rs. 3340497/-GST- Rs. 11630733

Appeal Admitted Stay Granted Next dt. 31.03.2011 For Hearing

3.

Dy. Collector, Morbi

Appli. No. 86 / 09

Sales tax Dept. Sales Tax Dept. Attached Earstwhile Arunoday Mills, we have challenged the Attachment

Nil Attachment Lifted. Proceedings Closed

4. Jt.Commissiner Sales Tax, Rajkot

Appeal / 2010

Sales Tax Appeal, 2003-04 2004-05, CST & GST

The Defferement Sales Tax dues of Earstwhile Arunoday Mills Morbi is Challanged in Appeal

2003-04 CST - Rs. 6765982 /- GST- Rs. 14163330/-2004-05 CST- Rs. 12629228/- GST- Rs. 25461704/-

Appeal AdmittedNext Date: 19.03.11

5. Dp.Commissiner Sales Tax, Rajkot

Appeal / 2010

Sales Tax Appeal, 2006 - 07 CST & GST

The Defferement Sales Tax dues of Earstwhile Arunoday Mills Morbi is Challanged in Appeal

GST Rs. 2358792/- CST Rs. 448550/-

Appeal Admitted Next Date: 19.03.11

6. Jt. Reg. Diretor ESI Ahmedabad

Notice ESI vs Shanti Exports

Intrest & Damages on ESI Dues of Earstwhile Arunoday Mills

Rs. 896644/-

We have Filed the reply & Denied our Liability

7 Income Tax Dept

CIT Appeal Shanti Export Vz. Income Tax (A.Y2007-08)

Assessment Order Passed U/S143(3) & disallow Rs.696282/- Rs.20000/-

- Case Pending at CIT Apppeal.

8 Income Tax Dept

CIT Appeal Shanti Export Vz. Income Tax (A.Y2008-09)

Assessment Order Passed U/S143(3) & disallow Rs.1853478/- Rs.397804/-

- Case Pending at CIT Apppeal.

163

Litigations of Chiripal Textile Mills Private Limited Cases filed against the Company:

Labour cases

Sr. No. Forum Case No.

Parties to proceedings Brief particulars

Quantum (Rs. appx.)

Current Status

1. Labour Court at Nadiad

Workmen Compensation Case No. 14 of 2002

Bhalabhai Vajesingh Vs. Chirirpal Textile Mills Pvt Ltd

Bhalabhai Vajesingh filed a case in the Labour Court at Nadiad against Chirirpal Textile Mills Pvt Ltd in respect of a claim of Rs. 3,00,000/- towards compensation for permanent disability due to loss of right hand in an accident in the factory of Chirirpal Textile Mills Pvt Ltd.

3,00,000 The matter is pending before the Labour Court at Nadiad.

Litigations of Shanti Educational Initiatives Limited (Formerly, Chiripal Enterprises Limited) Cases filed against the Company:

Investigation from SEBI.



Current Status

1. Securities Exchange Board ofIndia

Securities Exchange Board of India Vs. Chiripal Enterprises Limtied

The Securities and Exchange Board of India (“SEBI”), vide various letters, had sought various clarifications and information from Chiripal Enterprises Limited (“CEL”), inter alia, pertaining to information regarding trading in Teledata Informatics Limited in the month of December 2006. CEL videvarious letters, provided certain information and also sought extension of time for filing the reply. The following are the details of the letters addressed by SEBI to CEL: 1. Letter dated September 10, 2008 bearing no. ISD/SP/VJ/137345/2008; 2. Letter dated July 8, 2009 bearing no. IVD/ID4/AM/AD/16914 1/09; 3. Letter dated December 7, 2009 bearing no. IVD/ID4/AM/AD/18637 9/09; and 4. Letter dated December 24, 2009 bearing no. IVD/ID4/AM/AD/188699/09. CEL replied to various letters addressed by SEBI vide the following letters: 1. Letter dated September 19, 2008 2. Letter dated October 15, 2008; 3. Letter dated October 27, 2008; and 4. Letter dated December 14, 2009.

- The Company had replied to the SEBI’s various letters to their satisfaction and thereafter in continuation of the investigation, SEBI called the Director of the Company for the personal appearance in connection with the matter. The Director, Shri Jaiprakash D Chiripal, appeared before the Investigation Officer at their Office at Mumbai and replied their queries along with the documents required by the SEBI. Thereafter, there is no communication from SEBI.

164

PAST PENALTIES LEVIED IN THE LAST FIVE YEARS

The amount of penalties levied on our Company in last five years towards alleged non-compliance / violation of

applicable law / rules / regulations / orders are as follows:

(Rs. In million)

Year Brief description Status Amount

2005- 2006 Customs (Shanti Processors Limited)

Paid 0.01

2006-2007 Sales tax penalty Paid (Rs. 6000)

Penalties levied on Promoter Group Entities in last five years. (Rs. In million)

Year Brief description Status Amount 2007-08 Vishal Fabrics Private Limited Paid 0.01

(Rs. In million)

Year Brief description Status Amount 2008-2009 Nandan Exim Limited Paid 0.01

(Rs. In million)

Year Brief description Status Amount 2008-2009 Chiripal Lifestyle Limited Paid 0.001

165

SECTION XIII

The high and low of the market price of the equity shares of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) having a face value of Rs.10/- each on BSE year wise for the last three years are as follows:

Year High (Rs.) Low (Rs.) 2010 12.80 5.64 2009 32.90 6.95 2008 35.05 5.75

The trading of the share of face value Rs.5/- each fully paid up of GSL Nova Petrochemicals Ltd has commenced since 14.2.2009.

The high and low of the market price of the equity shares of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) having a face value of Rs.5/- each on BSE and NSE month wise after demerger i.e. fresh listing from 14.12.2009 are as follows: BSE

Year High (Rs.) Low (Rs.)

Dec 09 32.15 10.75

Jan 10 12.80 9.25

Feb 10 10.45 7.48

Mar 10 9.75 7.40

Apr 10 9.85 7.42

May 10 8.37 6.51

Jun 10 7.89 6.71

Jul 10 7.60 6.55

Aug 10 8.85 6.53

Sep 10 8.00 6.94

Oct 10 7.60 6.56

Nov 10 7.34 5.64

Dec 10 6.50 5.65

Jan 11 6.50 4.62

Feb 11 5.21 3.68

Mar 11 4.39 3.41

166

SECTION XIV

OTHER INFORMATION

Material Contracts and Documents for Inspection

The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Information Memorandum) which are or may be deemed material have been entered or to be entered into by our Company:- Not Applicable.

Documents for Inspection:

1. Memorandum and Articles of Association, as amended till the date of Information Memorandum.

2. Certification of Incorporation dated 17.12.2003 and fresh Certificate of incorporation dated 19.10.2009 pursuant to change of name.

3. Bipartite agreement entered into by CIL NPL with NSDL

4. Bipartite agreement entered into by CIL NPL with CDSL.

5. Reports of the statutory Auditors of the Company dated March 31, 2010 and December 31, 2010.

6. Scheme of Arrangement in the nature of demerger sanctioned by the Hon’ble High Court of Gujarat at Ahmedabad vide its order dated 27.08.2009, the copy of which is issued on 18.09.2009.

7. Order dated 27.08.2009 of the Hon’ble High Court of Gujarat at Ahmedabad approving the Scheme of Arrangement in the nature of demerger.

8. ROC filing of the Scheme vide FORM No.21 dated 24.09.2009.

9. Copy of an order of Hon’able Gujarat High Court dated 21.03.2011

167

THE UPDATED EVENTS SINCE APPROVAL OF THE SCHEME AND FILING OF EARLIER INFORMATION MEMORANDUM TO TILL DATE

1. CHANGE IN CAPITAL STRUCTURE OF THE COMPANY.

As insisted by CDR EG to make the net worth positive before 31.03.2010, the Company converted loan of one of its associates M/s. Sparow Exports Pvt Ltd of Rs.5 Crore by issuing 5,00,000 preference shares of Rs.100/- each aggregating Rs. 5,00,00,000/- and there by complied with the stipulation of CDR EG and made the networth of the Company positive.

As directed by CDR to make net worth of the company positive by converting unsecured loans of associates and relatives of the promoters of the company, the company decided to make changes in the capital structure of the company. In the wake of with promulgation of SEBI order dated 12.01.2010, the issue of equity shares was not found to be advisable. Therefore The Board of Directors in their meeting held on 05/02/2010 approved the reclassification of Authorized Share Capital of the Company by reclassifying the same into 5,50,00,000 Equity shares of Rs. 5/- each and 5,00,000 Preference shares of Rs.100/- each which was approved by the members of the Company in an Extra Ordinary General Meeting held on 19th March, 2010. The Company has filed the necessary Form no. 5 and Form no. 23 regarding reclassification of Share Capital and Special Resolution under Section 81 (1A) respectively on 15th May, 2010. Now, separate application for change in Capital structure and listing of preference shares will be made as may be advised by Stock Exchanges. MEMORANDUM OF ASSOCIATION AS ON DATE

V. The Authorised Share Capital of the Company is Rs.32,50,00,000/- (Rupees Thirty Two Crores Fifty Lacs Only) divided into 5,50,00,000 (Five Crores Fifty Lacs Only) Equity Shares of Rs.5/- (Rupees Five only) each and 5,00,000 (Five Lacs) Preference Shares of Rs.100/- (Rupees One Hundred Only) each with the rights, privileges and conditions attached thereto with the power to vary, modify or abrogate such rights, privileges and conditions as may be provided by the Articles of Association of the Company for the time being. The Board of Directors shall have the power to classify as and when required the shares as equity or preference shares and attach thereto respectively such preferential, deferred, qualified or special rights, privileges and conditions and also the power to increase or reduce the capital of the Company as may be determined in accordance with the Articles of Association of the Company.

ARTICLES OF ASSOCIATION AS ON DATE

“5(a).The Authorised Share Capital of the Company is Rs.32,50,00,000/- (Rupees Thirty Two Crores Fifty Lacs Only) divided into 5,50,00,000 (Five Crores Fifty Lacs Only) Equity Shares of Rs.5/- (Rupees Five only) each and 5,00,000 (Five Lacs) Preference Shares of Rs.100/- (Rupees One Hundred Only) each with the power to increase or reduce such capital from time to time in accordance with the regulations of the company and the legislative provisions for the time being in force in this behalf and with the power also to divide the shares in the capital for the time being into equity share capital and preference share capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions.”

In view of the above the Capital Structure changes as follows:

Capital Structure: Post Scheme Pursuant to the scheme, the company was required to issue 1(One) equity share of Rs. 5/- each to the shareholders of demerged company being GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited), on its record date, 22nd October 2009. Accordingly, the Company filed form no 21 with office of ROC Gujarat who has registered the form no 21 and amended the master data of the Company by raising the Authorised Share Capital of the Company to Rs. 32,50,00,000/- consists of 6,50,00,000 equity shares of Rs. 5/- each. The Board of Directors of the company at its meeting held on 26th October, 2009 issued 1 (one) equity shares of Rs.10/- each fully paid up against 1(One) equity share of Rs. 5/- each fully paid up to the shareholders of GSL Nova Petrochemicals Limited (Formerly Nova Petrochemicals Limited) whose name appeared in the Register of Member as on record date 22nd October, 2009 of that company. The company filed form no 2 with ROC Gujarat. Therefore the share capital structure of the Company, at present, is 2,71,00,000 equity shares of Rs. 5/- each fully paid up aggregating Rs. 13,55,00,000/-.

168

Later on, the Company re-classified its Authorized Share Capital of Rs. 32,50,00,000divided into 5,50,00,000 Equity Shares of Rs. 5/- each and 5,00,000 Preference Shares of Rs. 100/- each vide filing of Form no. 5 & Form no. 23 with ROC, Gujarat

Authorised: Rs.

5,50,00,000 Equity Shares of Rs. 5/- each 27,50,00,000

5,00,000 Preference Shares of Rs. 100/- each 5,00,00,000




Paid-up:


5,00,000 8% Non – Cumulative Redeemable Preference Shares of Rs. 100/- each 5,00,00,000

Capital Evolution:

At the Time of Incorporation:

Authorised: Rs.

15000000 Equity Shares of Rs. 10 each 15,00,00,000



Paid-up:


Pursuant to Scheme:

Authorised:




Paid-up:


Modified after Scheme:

Authorised: Rs.

5,50,00,000 Equity Shares of Rs. 5/- each 27,50,00,000


169




Paid-up:


5,00,000 8% Non – Cumulative Redeemable Preference Shares of Rs. 100/- each 5,00,00,000

Converted the loans of following entities by issuance of Preference Shares of at its meeting of Board of Directors held on 26.03.2010

1. Sparow Exports Private Limited

170

2. CHANGE IN SHAREHOLDING PATTERN OF THE COMPANY:-

Shareholding pattern as on 31.03.2011


Statement showing Shareholding Pattern as per Clause 35

Code:

Quarter 31-March-2011

Face Value Rs. 5/-

Category Category of shareholder Number of Total number

Number of

shares

Total shareholding as a

percentage Shares pledged or otherwise

code shareholders of shares held in of total number of shares encumbered

dematerialized As a As a Number As a

form percentage of percentage of of shares percentage

(A+B) (A+B+C) (IX) =

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (VIII)/(IV)*100

(A) Shareholding of Promoter and

Promoter Group

1 Indian

(a) Individuals/Hindu Undivided

Family 26 5877839 5827839 21.6894 21.6890 190620 3.2430

(b) Central Government/State

Government(s) 0 0 0 0.00 0.00 0 0.00

(c) Bodies Corporate 9 6602917 4902917 24.3650 24.3650 504517 7.6408

(d) Financial Institutions / Banks 0 0 0 0.00 0.00 0 0.00

(e) Any Other (specify) 0 0 0 0.00 0.00 0 0.00

Sub Total (A)(1) 35 12480756 10730756 46.0545 46.0545 695137 5.5697

2 Foreign

(a) Individuals (Non-Resident

Individuals/Foreign Individuals) 0 0 0 0.00 0.00 0 0.00

(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00

(c) Institutions 0 0 0 0.00 0.00 0 0.00

(d) Any Other (specify) 0 0 0 0.00 0.00 0 0.00

Sub Total (A)(2) 0 0 0 0.00 0.00 0 0.00

Total Shareholding of

Promoter and Promoter

Group (A)=(A)(1)+(A)(2) 35 12480756 10730756 46.0545 46.0545 695137 5.5697


1 Institutions

(a) Mutual Funds/UTI 0 0 0 0.00 0.00 0 0.00

(b) Financial Institutions / Banks 1 600 600 0.0022 0.0022 0 0.00

(c) Central Government/State

Government(s) 0 0 0 0.00 0.00 0 0.00

(d) Venture Capital Funds 0 0 0 0.00 0.00 0 0.00

(e) Insurance Companies 0 0 0 0.00 0.00 0 0.00

(f) Foreign Institutional Investors 0 0 0 0.00 0.00 0 0.00

(g) Foreign Venture Capital Investors 0 0 0 0.00 0.00 0 0.00

(h) Any Other (specify) 0 0 0 0.00 0.00 0 0.00

Sub Total (B) (1) 1 600 600 0.0022 0.0022 0 0.00

2 Non-institutions

(a) Bodies Corporate 214 11020800 11017011 40.6672 40.6672 0 0.00

171

(b) i) Individuals - shareholders holding

nominal share capital up to Rs 1

Lakh 6916 2749464 2154489 10.1456 10.1456 0 0.00

ii) Individual shareholders holding

nominal share capital in excess of

Rs. 1 Lakh 1 197417 197417 0.7285 0.7285 0 0.00

(c) Any Other (Specify)

i NRI Rep 254 515917 105117 1.9038 1.9038 0 0.00

ii NRI Non -Rept 17 28014 28014 0.1034 0.1034 0 0.00

iii OCB 1 5000 5000 0.0185 0.0185 0 0.00

iv Trust 1 5000 5000 0.0185 0.0185 0 0.00

v Clearing Member 33 97032 97032 0.3581 0.3581 0 0.00

Sub Total (B)(2) 7437 14618644 13609080 53.9433 53.9433 0 0.00

Total Public Shareholding

(B)=(B)(1)+(B)(2) 7438 14619244 13609680 53.9455 53.9455 0 0.00

Total (A)+(B) 7473 27100000 24340436 100.00 100.00 0 0.00

(C) Shares held by custodians

and against which Depository

Receipts have been issued 0 0 0 0.00 0.00 0 0.00

GRAND TOTAL (A)+(B)+(C) 7473 27100000 24340436 100.00 100.00 695137 2.565

172

3. HOLDING OF CHIRIPAL GROUP AS PER CLAUSE 35 AS ON 31.03.2011

Sr. No.

Name of Shareholder No. of Shares

Percent

1 CHIRIPAL INDUSTRIES LIMITED 3036000 11.20 2 NANDAN EXIM LTD 1332000 4.92 3 NANDAN EXIM LIMITED 1032000 3.81 4 VED PRAKASH D CHIRIPAL 808219 2.98 5 BRIJ MOHAN D CHIRIPAL 616620 2.28 6 Brijmohan D Chiripal 600000 2.21 7 VISHAL V CHIRIPAL 500200 1.85 8 MANJUDEVI J. AGARWAL 500200 1.85 9 SAVITRIDEVI V. CHIRIPAL 500200 1.85

10 URMILADEVI J. AGARWAL 500200 1.85 11 MANJUDEVI JAYPRAKASH AGARWAL 500000 1.85 12 SHANTI EXPORTS PVT. LTD. 449617 1.66 13 SHANTI EXPORTS PVT. LTD. 402000 1.48 14 VISHAL VEDPRAKASH CHIRIPAL 400000 1.48 15 URMILADEVI JYOTIPRASAD AGARWAL 400000 1.48 16 SAVITRIDEVI VEDPRAKASH CHIRIPAL 400000 1.48 17 CHIRIPAL PETROCHEMICALS LIMITED 266000 0.98 18 Vedprakash Devkinandan Chiripal 100000 0.37 19 CHIRIPAL ENTERPRISE LIMITED 34900 0.13 20 SHANTI EDUCATIONAL INITIATIVES LIMITED 30400 0.11 21 PRITI PROCESSORS PVT LTD 20000 0.07 22 JYOTIPRASAD CHIRIPAL 12500 0.05 23 JAI PRAKASH CHIRIPAL 12500 0.05 24 VEDPRAKASH CHIRIPAL 12500 0.05 25 BRIJMOHAN CHIRIPAL 12500 0.05 26 VEDPRAKASH DEVKINANDAN CHIRIPAL 400 0.00 27 VANSH J CHIRIPAL 200 0.00 28 NIDHI J AGARWAL 200 0.00 29 NISHI J AGARWAL 200 0.00 30 PRITIDEVI B. CHIRIPAL 200 0.00 31 RONAK B AGARWAL 200 0.00 32 RUCHI B AGARWAL 200 0.00 33 BRIJMOHAN D H U F 200 0.00 34 DEEPAK J AGRAWAL 200 0.00 35 JAY PRAKASH D. AGARWAL 200 0.00

TOTAL: 12480756 46.05

173

4. CHANGE IN NAME OF TEN LARGEST SHAREHOLDERS.

Name of 10 largest shareholders as on 31.03.2011

Sr. No

Name No of Shares

(%) of share

Interest, if any

1 GUPTA SILK MILLS PVT LTD 4012400 14.8059 - 2 CHIRIPAL INDUSTRIES LIMITED 3036000 11.203 - 3 MILLENNIUM INFOSOFT PVT LTD 1700000 6.2731 -

4 NANDAN EXIM LTD 1332000 4.9151 - 5 NANDAN EXIM LIMITED 1032000 3.8081 - 6 GUPTA SYNTHETICS LTD 918400 3.3889 -

7 VED PRAKASH D CHIRIPAL 808219 2.9824 - 8 TRIPOLI MANAGEMENT PVT.LTD. 709023 2.6163 - 9 JM FINANCIAL SERVICES PRIVATE LIMITED 645000 2.3801 -

10 BRIJ MOHAN D CHIRIPAL 616620 2.2754 -

TOTAL 14809662 54.6483

174

5. INTER SE TRANSFER OF SHARES AMONG PROMOTER & PROMOTER GROUPS

Change in shareholdings of promoter & promoter group (chiripal group) of the company after post demerger pursuant to exchange of shares between gupta group & chiripal group as per the scheme of demerger, there is a increase in the shareholdings of the promoter of the company by thirty five lacs equity shares.

INTER SE TRANSFER OF SHARES BETWEEN GUPTA FAMILY AND CHIRIPAL FAMILY

1. Share transfer by Chiripals’ to Guptas’

Sr. No.

Name of Transferor (Promoters of CIL Nova)

No. of shares

Name of Transferee (Promoters of GSL Nova)

1 Vedprakash D.Chiripal 600000 Comptel Infosys Pvt. Ltd.

2 Vishal V.Chiripal 500000 Comptel Infosys Pvt. Ltd.

3 Savitridevi V.Chiripal 500000 Shikha Investments Pvt. Ltd.

4 Nandan Exim Ltd 166800 Shikha Investments Pvt. Ltd.

5 Manjudevi J.Agarwal 126200 Shreemohan Gupta

6 Urmiladevi J.Agarwal 7220 Prakash Gupta

7 Urmiladevi J.Agarwal 28000 Neeta Gupta

8 Urmiladevi J.Agarwal 21000 Gaurav Prakash Gupta

9 Urmiladevi J.Agarwal 4220 Shreemohan N. Gupta

10 Urmiladevi J.Agarwal 81400 Umadevi M. Gupta

11 Urmiladevi J.Agarwal 53400 Umadevi M. Gupta

12 Urmiladevi J.Agarwal 19000 Shefali M. Gupta

13 Brijmohan D.Chiripal 600000 Comptel Infosys Pvt. Ltd.

14 Manjudevi J.Agarwal 227000 Prakash Gupta

15 Urmiladevi J.Agarwal 19750 Jatin Gupta

16 Urmiladevi J.Agarwal 190610 Shyam Sunder Gupta

17 Urmiladevi J.Agarwal 54600 Savita Gupta

18 Urmiladevi J.Agarwal 20800 Nikunj S.Gupta

19 Nandan Exim Ltd 133200 Sunilkumar N.Gupta

20 Manjudevi J.Agarwal 33000 Sunilkumar N.Gupta

21 Manjudevi J.Agarwal 113800 Sunainadevi S.Gupta

Total 3500000

175

2. Share transfer by Guptas’ to Chiripals’

Sr. No.

Name of Transferor (Promoters of GSL Nova)

No. of shares

Name of Transferee (Promoters of CIL Nova)

1 Comptel Infosys Pvt. Ltd. 600000 Vedprakash D.Chiripal

600000 Brijmohan D.Chiripal

500000 Vishal V.Chiripal

2 Shikha Investments Pvt. Ltd.

500000 Savitridevi V.Chiripal

166800 Nandan Exim Ltd

3 Sunilkumar N. Gupta 133200 Nandan Exim Ltd

Sunainadevi S. Gupta 33000 Manjudevi J.Agarwal

4 Shreemohan Gupta 126200 Manjudevi J.Agarwal

Umadevi Gupta

5 Sunainadevi S. Gupta 113800 Manjudevi J.Agarwal

Sunilkumar N. Gupta

6 Prakash Gupta 227000 Manjudevi J.Agarwal

7220 Urmiladevi J.Agarwal

7 Shyamsunder Gupta 190610 Urmiladevi J.Agarwal

8 Savita Gupta 54600 Urmiladevi J.Agarwal

Shyamsunder Gupta

9 Nikunj S. Gupta 20800 Urmiladevi J.Agarwal

10 Neeta Gupta 28000 Urmiladevi J.Agarwal

Prakash Gupta

11 Jatin Gutpa 19750 Urmiladevi J.Agarwal

12 Gaurav Prakash Gupta 21000 Urmiladevi J.Agarwal

13 Shreemohan N. Gupta 4220 Urmiladevi J.Agarwal

14 Umadevi M. Gupta 81400 Urmiladevi J.Agarwal

Shreemohan N. Gupta

15 Umadevi M. Gupta 53400 Urmiladevi J.Agarwal

16 Shefali M. Gupta 19000 Urmiladevi J.Agarwal

Total 3500000 6. Change in networth of resultant company – CIL Nova Petrochemicals Limited:-

The Net worth of the Resultant Company as on 31.0.2011 is Rs. 252.57 Crore.

7.Change In Email Id:-

The new Email Id for the investors & shareholders is “[email protected]”

176

8. SHAREHOLDERS/INVESTORS GRIEVANCE

The company has been in receipt of email correspondences from few shareholders with respect to non availability of trading of the shares of the Company. The Company replied and reirated that the formalities with respect to listing has been complied with by the Company with BSE & NSE. While inquiring with the stock exchanges it has also come to the knowledge of the Company that the Stcok Exchange has furnished all records to SEBI and awaiting the approval from SEBI under section 19(2)(b) of SC(R) Rules, 1957. The desperation of shareholders instigated them to file a petition before the Hon’ble Gujarat High Court at Ahmedabad bearing Petition no. 10768 of 2010. the Hon’ble Gujarat High Court has been pleased to passed an order being order dated 21.03.2011 directing SEBI to give approval to the Stock Exchanges within 4 weeks from the date of Order. Accordingly, the Company has been in receipt of letter from the stock exchanges inviting the documents to comply with the listing requirements.

9. DETAILS OF THE CHANGE IN SHAREHOLDING OF OUR DIRECTORS

Details of shareholding of Directors as at 31st march, 2011:

Name of Directors No. of shares held as on 31/03/2011 % holding

Shri Vedprakash D. Chiripal 820719 3.03% Shri Jyotiprasad D. Chiripal 12500 0.05%

10. THE FOLLOWING ENTITIES HAVE BEEN CREATED SINCE FILING OF INFORMATION

MEMORANDUM WITH STOCK EXCHANGES TO TILL DATE:-

Relationship Vedprakash D. Chiripal

Jaiprakash D. Chiripal Jyotiprasad D. Chiripal Brijmohan D. Chiripal

Any Limited Liability Partnership (LLP) in which the aggregate share of the promoter and his immediate relatives is equal to or more than 10% of the total holding

1. Chiripal Exim LLP. 2. Nandan Chiripal Energy Corporation LLP 3. Nandan Corporation LLP




11. THE STATUS OF PROPOSED IPO OF CHIRIPAL INDUSTRIES LIMITED

Pusuant to the order of debarrment by the Whole Time Member, SEBI being order dated 12.01.2010, the proposed issue of Chiripal Industries Limited i kept on hold.

12. LISTING STATUS

The Company has received listing permission from BSE dated 22.02.2010 and Ahmedabad Stock Exchange Limited dated 08.04.2011 and the Company has taken steps for completion of necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above.

177

13. THE STATEMENT OF TAX BENEFITS APPLICABLE AS ON DATE OF FILING OF INFORMATION MEMORANDUM

To The Board of Directors CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA POLYYARN LIMITED, RESULTANT COMPANY) Chiripal House Shivranjani Cross Roads Satellite Ahmedabad - 380015 India

Sub: Statement of Tax Benefits

Dear Sirs, We hereby certify that the enclosed annexure states the tax benefits available to CIL Nova Petrochemicals Limited (the “Company”) and to the Shareholders for the Company under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in future, the Company may or may not choose to fulfill. The benefits discussed in enclosed annexure are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequence s and changing tax laws, each investor is advised to consult his own tax consultant with respect to specific tax implications arising out of their participation in the issue, particularly in view of the fact that there could be different interpretations of legislation. Unless otherwise specified, sections referred to in the annexure are sections of Income Tax Act, 1961. All the provisions set out in the annexure are subject to conditions specified in the respective sections. We do not express any opinion or provide any assurance as to whether:

- The Company or its shareholders will continue to obtain these benefits in future; or - The conditions prescribed for availing the benefits have been or would be met with.

The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. While all reasonable care has been taken in preparation of this statement, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it.


PLACE : AHMEDABAD DATED: 13.04.2011

(J. T. SHAH) PARTNER

[M.No.3983]

178

ANNEXURE TO THE CERTIFICATE DATED 13.04.2011

BENEFITS UNDER THE INCOME TAX ACT, 1961 GENERAL PROVISIONS: A: TO THE COMPANY:

1. Dividends earned are exempt from tax in accordance with and subject to the provisions of section 10(34) read with section 115-O of the Act. However, as per section 94(7) , losses arising from sale/ transfer of shares, where such shares are purchased within three months prior to the record date and sold within three months from the record date, will be disallowed to the extent such loss does not exceed the amount of dividend claimed exempt.

2. The company is eligible to exemption under section 10(34) in respect of income by way of dividend received from other Domestic Companies. However, as per section 94(7), losses arising from the sale/ redemption of units purchased within three months prior to the record date (for entitlement to receive income) and sold within nine months from the record date, will be disallowed to the extent such loss does not exceed the amount of income claimed exempt.

3. Income by way of interest, premium on redemption or other payment on notified securities, bonds, certificates issued by the Central Government is exempt from tax under section 10(15) in accordance with and subject to the conditions and limits as may be specified in notifications.

4. The company is eligible to exemption under section 10(35) in respect of income by way of dividend received from mutual fund specified under section 10(23D) and other specified under takings / companies. However, as per section 94(7), losses arising from sale/ transfer of shares, where such shares are purchased within three months prior to the record date and sold within three months from the record date, will be disallowed to the extent such loss does not exceed the amount of dividend claimed exempt.

5. The Company is eligible to exemption under section 10(36) in respect of Long Term Capital Gain arising from transfer of an ‘Eligible Equity Share in a company purchased or after the first day of March, 2003 and before the first day of March, 2004 (both days inclusive) and held for a period of 12 months or more.

6. In accordance with the provisions of section 10(38) the long-term gains arising on the transfer of securities in a transaction entered into in a recognized Stock Exchange in India and such transaction is chargeable to Securities Transaction Tax Under Chapter VII of the finance (No.2) Act, 2004, shall be exempt from income tax.

7. The long-term capital gains accruing to the company otherwise than as mentioned in 4 above, shall be chargeable to tax in accordance with and subject to the provisions of section 112 as follows :

a) @ 20% (Plus applicable surcharge, Cess and Higher Education Cess) after deducting from the sale proceeds the indexed cost of acquisition or

b) In the case of certain listed shares, securities and units, in a transaction not entered into in a recognized stock exchange, if long term capital gain is computed without indexation @ 10% (plus applicable surcharge, Cess and Higher Education Cess)

8. The company is eligible to claim exemption in respect of tax on long-term capital gains [(not covered by section 10(36) & 10(38)] under section 54EC if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified in the said section.

9. In accordance with Section 111A, the tax on capital gains arising from the transfer of a short term asset being an equity share in a company or a unit of an equity oriented fund, is chargeable to tax at the rate of 15% (plus

179

applicable surcharge and education cess), where such transaction is chargeable to Securities Transaction Tax. And if the provisions of Section 111A are not applicable to the short term capital gains, in case of non chargeability to Securities Transaction Tax, then the tax will be chargeable at the rate of 30% (plus applicable surcharge and education cess) as applicable.

10. As per the provisions of Section 32 of the Act, the company is eligible to claim depreciation on tangible and specified intangible assets as explained in the said section and the relevant Income Tax rules there under. In accordance with and subject to the conditions specified in Section 32(I)(iia) of the Act, the company is entitled to an additional depreciation allowance of 20% of the cost of new machines acquired and put to use during the year.

11. Under section 36(1) (vii), any bad debt or part thereof written off as irrecoverable in the accounts is allowable as a deduction from the total income.

12. The amount of tax paid under Section 115JB by the company for any assessment year beginning on or after 1st April 2006 will be available as credit for ten years succeeding the Assessment Year in which MAT credit becomes allowable in accordance with the provisions of Section 115JAA.

13. In case of loss under the head “Profit and Gains from Business or Profession”, it can be set-off against other income and the excess loss after set-off can be carried forward for set-off - against business income of the next seven Assessment Years.

14. The unabsorbed depreciation, if any, can be adjusted against any other income and can be carried forward indefinitely for set-off against the income of future years.

15. Section 14A of the Act restricts claim for deduction of expenses incurred in relation to incomes which do not form part of the total income under the Act. Thus, any expenditure incurred to earn tax exempt income is not tax deductible expenditure. Section 115-O Tax rate on distributed profits of domestic companies (DDT) is 15%, the surcharge on Income tax is at 5 %, and the Education & Higher Education Cess is at 3%. Tax Rates The tax rate is 30%. The surcharge on Income tax is at 5 %, and the Education & Higher Education Cess is at 3%. B: TO THE SHAREHOLDERS OF THE COMPANY: I. RESIDENTS

1. Under section 10(32) of the IT Act, any income of a minor child clubbed in the total income of the parent under section 64(1A) will be exempt from tax to the extent of Rs. 1500/- per minor child.

2. Members will be entitled to exemption, under section 10(34) in respect of the income by way of dividend received from the company. However, as per section 94(7) , losses arising from sale/ transfer of shares, where such shares are purchased within three months prior to the record date and sold within three months from the record date, will be disallowed to the extent such loss does not exceed the amount of dividend claimed exempt.

180

3. The long-term capital gains accruing to the members of the company on sale of the company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transaction Tax would be exempt from tax as per the provisions of section 10(38).

4. The short –term capital gains accruing to the members of the company on sale of the company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transaction Tax would be chargeable to tax @ 15% [plus applicable surcharge and education cess] as per the provisions of section 111A.

5. As per the provisions of section 2, the long-term capital gains accruing to the members of the company from the transfer of the shares of the company, otherwise than as mentioned in point 3 above, shall be charged to tax.

a. @ 20% (plus applicable surcharge and education cess) after deducting from he sale proceeds the Indexed cost of acquisition or

b. @ 10% (plus applicable surcharge and education cess) after deducting from the sale proceeds the cost of acquisition without indexation.

6. The members are entitled to claim exemption in respect of tax on long term capital gains under section 54EC, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified in the said section.

7. Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration for purchase/construction of a residential house within the specified time period and subject to the fulfillment of the conditions specified in those sections.

8. Under section 36(1)(xv) of the Act, securities transaction tax paid by a shareholder in respect of taxable securities transactions entered into in the course of its business, would be allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head “Profits and gains of business or profession”.

9. Section 14A of the Act restricts claim for deduction of expenses incurred in relation to incomes which do not form part of the total income under the Act. Thus, any expenditure incurred to earn tax exempt income is not tax deductible expenditure.

10. As per the provision of Section 71(3), if there is a loss under the head “Capital Gains”, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be set-off against both Short term and Long term capital gain. But Long term capital loss cannot be set-off against short term capital gain. The unabsorbed short term capital loss can be carried forward for next eight assessment years and can be set off against any capital gains in subsequent years. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off only against long term capital gains in subsequent years.

11. As per the provision of Section 56 (2)(vi) if an individual or HUF receives any property, which includes shares, without consideration, the aggregate fair market value of which exceeds Rs 50,000, the whole of the fair market value of such property will be considered as income in the hands of the recipient. Similarly, if an individual or HUF receives any property, which includes shares, for consideration which is less than the fair market value of the property by an amount exceeding Rs 50,000, the fair market value of such property as exceeds the consideration will be considered as income in the hands of the recipient. However provision of their section are not applicable under certain circumstances subject to fulfillment of specified conditions

181

12. Tax Rates

For Individuals, HUFs, BOI and Association of Persons: Notes: (i) In respect of women residents below the age of 65 years, the basic exemption limit is Rs. 190,000. (ii) In respect of senior citizens resident in India, the basic exemption limit is Rs. 250,000. (iii) In respect of Very senior citizens resident in India, the basic exemption limit is Rs. 5,00,000. (iV) Education cess will be levied at the rate of 3% on income tax. II. NON-RESIDENTS 1. Under section 10(32) any income of a minor child clubbed in the total income of the parent under section 64(1A) will be exempt from tax to the extent of Rs.1500 per minor child. 2. Non-resident members will be entitled to exemption, under section 10(34), in respect of the income by way of dividend received from the company. However, as per section 94(7) , losses arising from sale/ transfer of shares, where such shares are purchased within three months prior to the record date and sold within three months from the record date, will be disallowed to the extent such loss does not exceed the amount of dividend claimed exempt. 3. The long-term capital gains accruing to the members of the company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transaction Tax would be exempt from tax as per the provisions of section 10(38). 4. In accordance with section 48, capital gains arising out of transfer of capital assets being shares in the company shall be computed by converting the cost of acquisition, expenditure in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer into the same foreign currency as was initially utilized in the purchase of the shares and the capital gains computed in such foreign currency shall be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing/arising from every reinvestment thereafter in, and sale of, shares and debentures of, an Indian company including the Company. 5. The short-term capital gains accruing to the members of the company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transactions Tax would be chargeable to tax @ 15% [plus applicable surcharge and education cess] as per the provisions of section 111A.

Slab of income (Rs.) Rate of tax (%) 0- 180,000 Nil 180,001 – 500,000 10% 500,001 – 8,00,000 20% 800,001 and above 30%

182

6. As per the provisions of section 112 the long-term capital gains accruing to the members of the company from the transfer of the shares of the company, otherwise than as mentioned in point 3 above, shall be charged to tax. a) @ 20% (Plus applicable surcharge and education cess) after deducting from the sale proceeds the indexed cost of acquisition or b) @ 2% (Plus applicable surcharge and education cess) after deducting from the sale proceeds the cost of acquisition without indexation. 7. The members are entitled to claim exemption in respect of tax on long-term capital gains under sections 54EC, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified in those sections. 8. Individuals or HUF members can avail exemption under section 54F by utilization of the sale consideration for purchase/construction of a residential house within the specified time period and subject to the fulfillment of the conditions specified therein. 9. Under the provisions of section 90(2), if the provisions of the Double Taxation Avoidance Agreement [DTAA] between India and the country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be applicable. 10. Non-Resident Indians (as defined in section 115C(e)), being shareholders of an Indian Company have the option being governed by the provisions of Chapter XII-A, which inter-alia entitles them to the following benefits in respect of income form shares of an Indian Company acquired, purchased or subscribed to in convertible foreign exchange. a. As per provisions of section 115E and subject to the conditions specified therein, long-term capital gains arising on the transfer of Company’s shares will be charged to Income tax @ 10% (plus applicable surcharge and education cess.). b. As per the provisions of section 115F and subject to the fulfillment of the conditions specified therein, the Long Term Capital gains arising on the transfer of Company’s shares shall be exempted from income tax entirely/ proportionately if all or a portion of the net consideration is invested within 6 months of the date of transfer in specified assets as defined in section 115C (f) or any savings certificates referred to in section 10(4B). The amount so exempted shall, however, be chargeable to tax as long term capital gains under the provisions of section 115F(2) if the specified assets are transferred or converted in to money within three years from the date of acquisition thereof a as specified in the said section. c. As per the provision of section 115G, Non-resident Indians are not obliged to file a return of income under section 139(1), if their only source of income is income form investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-A. d. Under section 115H, where a Non-Resident Indian, in relation to any previous year, becomes assessable as a resident in India in respect of the total income of any subsequent year, he / she may furnish to the Assessing Officer a declaration in writing, along with his/ her return of income under section 139 for the assessment year for which he/she is so assessable, to the effect that the provisions of the Chapter XII-A shall continue to apply to him/her in relation to such income for that assessment year until the transfer or conversion (otherwise than by transfer into money of such assets.

183

e. As per the provision of section 115-I, when a Non Resident Indian, elects not to be governed by the provision of Chapter XII-A, then his/her total income shall be computed and charged in accordance with other provisions of the Income Tax Act,1961. III. FOREIGN INSTITUTIONAL INVESTORS 1. Income by way of dividend received on shares of the company is exempt under section 10(34) of the IT Act. However, as per section 94(7) , losses arising from sale/ transfer of shares, where such shares are purchased within three months prior to the record date and sold within three months from the record date, will be disallowed to the extent such loss does not exceed the amount of dividend claimed exempt. 2. The long-term capital gains accruing to the members of the company on sale of the company’s shares in a transaction entered into in a recognized stock exchange in India and the transaction is chargeable to Securities Transaction Tax, would be exempt from tax as per the provisions of section 10(38). 3. The short-term capital gains accruing to the members of the company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India and chargeable to Securities Transaction Tax would be chargeable to tax @ 15% (plus applicable surcharge and education cess) as per the provisions of section 111A. 4. Under section 115AD (1)(b)(ii), income by way of Short Term capital Gain arising from the transfer of shares (otherwise than as mentioned in 4 above) held in the company for a period of less than 12 months will be taxable @ 30% (plus applicable surcharge and education cess). 5. Under section 115AD (1)(b)(iii) income by way of Long Term Capital Gain arising from the transfer of shares (otherwise than as mentioned in 2 above) held in the company will be taxable @ 10% ((plus applicable surcharge and education cess). It is to be noted here that the benefits of indexation and foreign currency fluctuation protection as provided by section 48 of the Act are not available to Foreign Institutional Investors. 6. Long Term Capital Gains on sale of shares of the company by the members shall be exempt from income tax if such gains are invested in bonds/equity shares specified in section 54EC respectively subject to the fulfillment of the conditions specified in those sections. 7. Under the provisions of section 90(2), if the provisions of the Double Taxation a voidance agreement [DTAA] between India and the country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be applicable. 8. Under section 196D (2) of the Income-tax Act, 1961, no deduction of tax at source will be made in respect of income by way of capital gain arising from the transfer of securities referred to in section 115AD. 9. Under section 36(1)(xv) of the Act, securities transaction tax paid by a shareholder in respect of taxable securities transactions entered into in the course of its business, would be allowed as a deduction if the income arising from such taxable securities transactions is included in the income computed under the head “Profits and gains of business or profession”. IV. MUTUAL FUNDS Under section 10(23D) of the Act, exemption is available in respect of income (including capital gains arising on transfer of shares of the Company) of a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 or such other Mutual fund set up by a public sector bank or a public financial institution or authorized by the Reserve Bank of India and subject to the conditions as the Central Government may specify by notification.

184

V. BENEFITS TO THE VENTURE CAPITAL COMPANIES/FUNDS As per the provisions of section 10(23FB), any income of Venture Capital Company/Fund registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, would be exempt from Income Tax, subject to conditions specified. VI. BENEFITS UNDER THE WEALTH TAX ACT, 1957, ‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957 does not include shares in Companies and hence, shares are not liable to wealth tax. VII. BENEFITS UNDER THE GIFT-TAX ACT, 1958 1. Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Any gift of shares of the Company is not liable to gift-tax. However, in the hands of the Donee the same will be treated as income unless the gift is from a relative as defined under Explanation to Section 56 (2) (vi) of Income-tax Act, 1961. Notes: • The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequence of the purchase, ownership and disposal of equity shares : • The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the Company and to the shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws : • This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for a professional tax device. In view of the individual nature of tax consequences, the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their participation in the issue : • In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and • The stated benefits will be available only to the sole/first named holder in case the shares are held by joint shareholders.


PLACE : AHMEDABAD DATED: 13.04.2011

(J. T. SHAH) PARTNER

[M.No.3983]

185

14. Audited Balance Sheet 6 months prior to filing of this Infromation memorandum.

LATEST FINANCIAL STATEMENT AS ON 31.12.2010

AUDITORS’ REPORT

To, The Members of CIL - NOVA PETROCHEMICALS LIMITED (FORMERLY KNOWN AS NOVA POLY YARN LIMITED) Ahmedabad 1. We have audited the attached Balance Sheet of CIL-NOVA PETROCHEMICALS LIMITED as at 31st

December 2010, the Profit and Loss Account and also Cash Flow Statement for the year ended on that date annexed thereto (together read as financial statements). These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These

Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (i) We have obtained all the information and explanations, which are to the best of our knowledge

and belief, were necessary for the purpose of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are

in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of written representation received from the directors, as on 31st December, 2010 and

taken on record by the Board of Directors, none of the directors is disqualified as on 31st December 2010, from being appointed as director of the company in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us,

the said accounts, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

186

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st December, 2010;

(ii) In the case of the Profit and Loss Account, of the Profit of the Company for the period

ended on that date; and

(iii) In the case of the Cash Flow Statement, of the Cash Flow of the Company for the period ended on that date.

For J. T. Shah & Company Chartered Accountants (FRN No. 109616W) Place : Ahmedabad Date : 20/04/2011 (J. T. Shah) Partner [M. No. 3983]

187

Audited Balance Sheet as at 31st December, 2010


As at

31.12.2010

Rs.

As at

31.03.2010

Rs.

SOURCES OF FUNDS

1 Shareholders' Funds :

(a) Share Capital 1 185500000 185500000

(b) Share Application Money 414000 414000

(c) Reserves and Surplus 2 529863446 529863446

715777446 715777446

2 Loan Funds :

(a) Secured Loans 3 578629782 621036991

(b) Unsecured Loans 4 342042719 344650270

920672500 965687260

3 Deferred Tax Liability (Net) 0 0

Total..... 1636449946 1681464706


1 Fixed Assets : 5

(a) Gross Block 2558607915 2517238502

(b) Less : Depreciation 1398275992 1328436696

Net Block 1160331923 1188801806

Add: Capital Work in Progress 32562332 25858988

2 Investments : 6 12221 12221

3 Current Assets, Loans and Advances

(a) Inventories 7 165014001 186678381

(b) Sundry Debtors 8 557683549 298084043

(c) Cash and Bank Balances 9 17740474 15167934

(d) Loans and Advances 10 70367138 74029748

810805162 573960106

4 Less :Current Liabilities and Provisions

(a) Current Liabilities 11 654485053 407881590

(b) Provisions 12 0 0

654485053 407881590

Net Current Assets 156320109 166078516

3 Miscellaneous Expenditure 13

(To the Extent not w/off or adjusted)

(a) Profit and Loss Account 287223361 300713175

Total..... 1636449946 1681464706

Notes on Accounts 20 (0) 0.0

FOR, CIL-NOVA PETROCHEMICALS LIMITED

Chairman Director

PLACE : AHMEDABAD Co. Secretary

DATE:20/04/2011

188

Audited Profit and Loss Account for the Period ended 31st December, 2010


For Nine Months

ended

31.12.2010

Rs.

For the year

ended

31.03.2010

Rs.

INCOME

1 Sales and Job Charges (Gross) 2113227998 2062682882

Less : Excise Duty 148924430 120546063

Sales (Net) 1964303568 1942136819

2 Other Income 14 3097814 8302518

3 Increase/(Decrease) in stock 15 (16741362) 90433429

Total..... 1950660020 2040872766

EXPENDITURE

1 Materials 16 1361199432 1279607294

2 Payments to and Provisions

for Employees 17 26912222 26380654

3 Operational and Other Expenses 18 408611154 558635301

1796722808 1864623249

Profit before Interest, Depreciation

and Taxation 153937212 176249517

Less

: Interest and Financial Charges 19 70608103 91065874

Profit before Depreciation

and Taxation 83329110 85183643

Less

: Depreciation 5 69839296 90079445

Profit / (Loss) before Taxation 13489814 (4895802)

Add: Exceptional Item Nil 12730550

Profit / (Loss) before Taxation 13489814 7834748

Less

: Provision for Taxation

- Current including Wealth Tax Nil Nil

- Fringe Benefit Tax Nil Nil

- Deferred Nil Nil

Profit / (Loss) after Taxation 13489814 7834748


Basic and Diluted earning per share 0.50 0.29

As per our report of

even date attached herewith FOR, CIL-NOVA PETROCHEMICALS LIMITED

FOR, J T SHAH & COMPANY

CHARTERED ACCOUNTANTS

Chairman Director

(J.T.SHAH)

PARTNER

PLACE : AHMEDABAD Co. Secretary

DATE:20/04/2011

189

SCHEDULES "1 TO 20" FORMING THE PART OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE PERIOD

ENDED 31.12.2010

Particulars Rs.

As at

31.12.2010

Rs.

As at

31.03.2010

Rs.

SCHEDULE - 1

SHARE CAPITAL

1 Authorised Capital

5,50,00,000 Equity Shares (Previous Year

5,50,00,000 of Rs.5/- each) of Rs. 5/- each. 275000000 275000000

5,00,000 8% Non Cumulative Redeemable 50000000 50000000

Preference Shares (Previous Year 5,00,000

of Rs.100/- each) of Rs. 100/- each. 325000000 325000000

2 Issued, Subscribed and Paid-up Capital

2,71,00,000 (Pr. Year 2,71,00,000 of Rs.5/- each)

Equity shares of Rs.5/- each fully paid up 135500000 135500000

5,00,000 (Pr. Year 5,00,000 of Rs.100/- each) 50000000 50000000

8% Non Cumulative Redeemable Preference shares

of Rs.100/- each fully paid up

185500000 185500000

3 Share Application Money 414000 414000

Total..... 185914000 185914000

SCHEDULE - 2

RESERVES AND SURPLUS

1 Revaluation Reserve

Balance as per last year 410893433 Nil

Add: on revaluation Nil 410893433

Less: Tr to Profit & Loss A/c Nil Nil

410893433 410893433

2 Share Premium


Add: Addition/Deduction during the year Nil Nil

118970013 118970013

3 General Reserve


Less : Adj.against Dr.Bal of P &l a/c (22500000) (22500000)

Nil Nil

4 Profit and Loss Account

Balance as per last year (323213175) (331047923)

Add : Additions during the year 13489814 7834748

(309723361) (323213175)

Add: Amt Adjusted against Cr bal of General Reserve 22500000 22500000

Add : Transferred to Miscellaneous (287223361) (300713175)

Expenditure 287223361 300713175

Nil Nil

Total..... 529863446 529863446

190

Particulars Rs.

As at

31.12.2010

Rs.

As at

31.03.2010

Rs.

SCHEDULE - 3

SECURED LOANS

1 Term Loans from Banks 505761450 550098646

2 Working Capital Loans from Banks 72431370 69553684

3 Other Loan 436961 1384660

Total..... 578629782 621036991

1 Term Loans are secured by first charge of fixed assets (through mortgage/hypothication of Immovable and Movable

assets), both present and future; subject to prior charge in favour of bankers/othres on specified Assets for Working

Capital loans/other loans and further secured by personal guarantee of Promoter Directors and Corporate guarantee of

Promoter's Group Companies and also further secured by second charge on book debts and stocks.

2 Working Capital loans are secured by first charge on Book Debts and Stocks, and further secured by personal

guarantee of the Promoter Directors and corporate guarantee of the Promoter's Group Companies and also further secured

by second charges on fixed assets specified under point 1 as above.

SCHEDULE - 4

UNSECURED LOANS

1 From Banks Nil Nil

2 Security Deposits 4591757 7199308

3 From Corporate Bodies 337396962 337396962

4 From others 54000 54000

Total.... 342042719 344650270

191

CIL Nova Petrochemicals Limited (Combined Block)

SCHEDULE - 5 : FIXED ASSETS

SR. NO. PARTICULARS

GROSS BLOCK DEPRICIATION NET BLOCK

AS AT ADDITION DEDUCTION AS AT AS AT ADDITION DEDUCTION AS AT AS AT AS AT

DURING DURING DURING DURING

01/04/2010 THE YEAR THE

YEAR 31/12/2010 01/04/2010 THE YEAR THE YEAR 31/12/2010 31/12/2010 31/03/2010

1 FREEHOLD LAND 422386556 Nil Nil 422386556 Nil Nil Nil Nil 422386556 422386556

2 BUILDING 226612341 22168749 Nil 248781090 70612397 5993086 Nil 76605484 172175606 155999944

3 FURNITURE & FIXTURES 146576 4184230 Nil 4330806 39594 205605 Nil 245199 4085606 106981

4 ELECTRICAL INSTALLATION 251472170 3653378 Nil 255125548 94467526 9200608 Nil 103668135 151457413 157004644

5 COMPUTER** 3403444 112850 Nil 3516294 3091095 421034 Nil 3512129 4164 312348

6 PLANT & MACHINERY 1591773520 9731098 () 1601504618 1145885267 52944524 Nil 1198829791 402674827 445888253

7 EQUIPMENTS 14209636 1519106 Nil 15728742 10312926 558998 Nil 10871924 4856818 3896710

8 VEHICLE 7234260 Nil Nil 7234260 4027890 515440 Nil 4543330 2690930 3206370

S U B T O T A L 2517238502 41369411 () 2558607914 1328436695 69839297 Nil 1398275992 1160331912 1188801806

9

CAPITAL WORK IN PROGRESS 25858989 33691743 26988399 32562332 Nil Nil Nil Nil 32562332 25858989

S U B T O T A L 25858989 33691743 26988399 32562332 Nil Nil Nil Nil 32562332 25858989

G R A N D T O T A L 2543097491 75061154 26988399 2591170246 1328436695 69839297 Nil 1398275992 1192894244 1214660796

PREVIOUS YEAR 2029568406 103107001 Nil 471349 2543097491 1238717439 90079444 360188 1214660796 790850967

192


31.12.2010 Rs.

As at 31.03.2010

Rs.

SCHEDULE - 6 INVESTMENTS


1 Nil (Previous Year 1) Equity Shares of Reliance Natural Resources Ltd., of Rs. 5/- each fully paid-up Nil

3 2 50 (Previous Year 50) Equity Shares of

Century Enka Ltd., of Rs. 10/- each fully paid-up 1890

1890 3 50 (Previous Year 50) Equity Shares of

Garden Silk Mills Ltd., of Rs. 10/- each fully paid-up 328

328 2218 2221


1 National Saving Certificate 10000 10000

Total... 12221 12221


SCHEDULE - 7

INVENTORIES

1 Raw Materials 27973410 26254402 2 Stores, Spares and Fuel 33824962 37702697 3 Packing Materials 992662 1054012 4 Work-In-Process 72964873 77007118 5 Finished Goods 17059451 29758568 6 Goods inTransit Nil Nil 7 Trading Stock 12198643 14901584

Total... 165014001 186678381

SCHEDULE - 8

SUNDRY DEBTORS (Unsecured except reported at Note no 27 of Schedule 19)

Considered Good 1 Outstanding for a Period exceeding 6 Months Nil Nil 2 Others 557683550 298084043



6346194 6346194 564029744 304430237

Less: Provision for Doubtful Debtors 6346194 6346194

Total.... 557683550 298084043

193

Particulars Rs.

As at 31.12.2010 Rs.

As at 31.03.2010 Rs.

SCHEDULE - 9



- In Current Account 6099764 2633583 - In Fixed Deposit 11394207 12454353 17738460 15165920

3 Balance with Non Scheduled Bank in Current Accounts 2014 2014

Total.... 17740474 15167934SCHEDULE - 10

LOANS AND ADVANCES (Unsecured)



31109319 35198896 2 Deposits 25057677 23981538 3 Advance to Staff Nil 347409 4 Balance with Excise authority (Payable on Demand) 2325935 573263 5 Advance Tax and TDS 21150736 20860215

Less:Provision for Taxation (9276529) (6931573) 11874207 13928642

Total..... 70367138 74029748

SCHEDULE - 11

CURRENT LIABILITIES

1 Sundry Creditors 638338429 398773596 2 Book Overdraft Nil 8910693 3 Advance from Customers / Employees 15253196 (696127) 4 Unclaimed dividend 893428 893428

Total.... 654485053 407881590

SCHEDULE - 12

PROVISIONS

1 Proposed Dividend Nil Nil 2 Provision for Tax on Proposed Dividend Nil Nil

Total.... Nil Nil

194

SCHEDULE - 13

MISCELLANEOUS EXPENDITURE Preliminary & Pre Operative Expense

Balance as per last year Nil 1216046 Add : Additions During The Year Nil 19772

Nil 1235818 Less: Preli. Exps. Written Off Nil Nil (1235818)

Nil Nil Profit & Loss Account


Total.... 287223361 300713175

SCHEDULE - 14 OTHER INCOME

1 Interest (TDS Rs. 322423/- Previous year Rs. 655218/) 1543720 1045343

2 Miscellaneous Balances Written off (614) 590061 3 Miscellaneous Income 1549517 6111557 4 Dividend 5191 3626 5 Provision for Doubtful Debtors and Advances (Net) Nil 551931

Total.. 3097814 8302518

SCHEDULE - 15

INCREASE / (DECREASE) IN STOCK

Closing Stock : 1. Finished Goods 17059451 29758568 2. Work-In-Process 72964873 77007118



106765686 16332257

Total.. (16741362) 90433429

SCHEDULE - 16

MATERIALS

Raw Materials Consumed 1123717548 1195164612 Purchase of Finished Goods 237481884 84442682

Total.. 1361199432 1279607294

SCHEDULE - 17 PAYMENTS TO AND PROVISIONS FOR EMPLOYEES

1 Salary and Wages 25332735 24941452 2 Contribution to P.F. and other funds 824472 1056383 3 Staff and Labour Welfare 755015 382819 4 Leave Encashment Nil Nil

Total.. 26912222 26380654

195

Particulars Rs.

For Nine Months ended

31.12.2010 Rs.

For the year ended

31.03.2010 Rs.

SCHEDULE - 18 OPERATIONAL, ADMINISTRATIVE AND SELLING EXPENSES

1 Stores and Spares Consumed 24633828 30205198 2 Power and Fuel Consumed 193610462 283380321 3 Packing Material Consumed 56868204 73331642 4 Freight,Cartage and Octroi 2751024 20271771 5 Insurance 2265735 3021820 6 Rent,Rates and Taxes 92036 573623 7 Vat Expense 81439044 88108265 8 Excise Duty Expenses (1185172) 2531767 9 Service Tax 356602 496579 10 Postage and Telephone Expenses 394393 530712 11 Stationery, Printing and Advertisement 329988 721827 12 Selling and Distribution Expenses 27345592 30499351 13 Travelling, Conveyance and Vehicle Expenses 1687200 2278043 14 Repairs and Maintenance :

(a) Plant 2667698 3170166 (b) Building 15253 81324 (c) Others 511067 701939

3194018 3953429 15 Legal and Professional Exps. 5000955 4883927 16 Exchange Rate Difference 1512927 Nil 17 Auditor's remuneration :

(a) Audit fees 225000 150000 (b) Tax Audit fees 37500 25000 (c) Taxation and Others 37500 25000 (d) Certification Nil 204000

300000 404000 18 Miscellaneous Expenses 8014318 13397866 19 Loss on Sale of Fixed Asset Nil 45161

Total ... 408611154 558635301

SCHEDULE - 19


1 Interest on Term Loans 36434625 46825914 2 Interest on Working Capital Loans 13339076 18986467 3 Bank and Other Charges 19209091 18395270 4 Interest to Others 1625311 6858224

Total ..... Total ... 70608103 91065874

196

CASH FLOW STATEMENT FOR NINE MONTHS ENDED 31ST DECEMBER,2010

For Nine Months ended

31.12.2010 2009-10 RS. RS. RS. RS.

A)

CASH FLOW FROM OPERATING ACTIVITIES:- Net Profit after Tax and Extraordinary Items 13489814 7834748Adjustment for:- 1) Prior Year Adjustement Nil Nil 2) Loss on Sale of Fixed Assets Nil 45161 3) Depreciation 69839296 90079445 4) Interest Paid 70608103 91065874

5) Interest Received (1543720) (1045343) 6) Provision for Taxation (Incl. Provision for Deferred Tax Liability) Nil

Nil

7) Provision for Doubtful Debtors and Advances Nil (551931) 8) Dividend Received (5191) (3626)

138898488 179589580 Operating Profit Before Working Capital Changes 152388302 187424328 Adjustment for:- 1) Trade & Others Receivable (259599507) (7635957) 2) Inventories 21664380 (88290943) 3) Loans & Advances 2832209 (3201400) 4) Current Liabilities 225925381 21403711

(9177538) (77724587)Cash Generated From Operation 143210764 109699740 Adjustment for:- 1) Prior year adjustment Nil Nil 2) Preliminary & Preoperative Expense Nil 1235818 2) Tax Paid (290521) (2279036)

(290521) (1043218)NET CASH FROM OPERATING ACTIVITIES (1) 142920243 108656522

B)

CASH FLOW FROM INVESTMENT ACTIVITIES:-

1) Purchase of Fixed Assets (26273751) (79122043) 2) Interest Received 1543720 8445406 3) Sale of Fixed Assets Nil 66000 3) Dividend Received 5191 3626 4) Decrease in Investment Nil (10000)

(24724840) (70617011)NET CASH USED IN INVESTMENT ACTIVITIES (2) (24724840) (70617011)

197

C)

CASH FLOW FROM FINANCING ACTIVITIES:- 1) Proceed from Share issue 50000000 2) Increase/(Decrease) of Long term borrowings (46944747) (2602473) 3) Increase/(Decrease) of Short term borrowings 1929987 6037968 4) Interest Paid (70608103) (91065874) 5) Dividend Paid (incl. Div.Tax) (3675)

(115622864) (37634055)NET CASH FROM FINANCING ACTIVITIES (3) (115622864) (37634055)Net Increase/(Decrease) in Cash & Cash Equivalent 2572539 405457Opening Cash & Cash Equivalent as on 1st April 15167934 14762478Closing Cash & Cash Equivalent as on Balance Sheet Date 17740474 15167934Notes: (1) The above Cash Flow Statement has been prepared under the "Indirect Method" setout in Accounting Standard - 3 issued by the Institute of Chartered Accountants of India.

As per our report of FOR,CIL NOVA PETROCHEMICALS LIMITED

even date attached herewith FOR, J T SHAH & COMPANY CHARTERED ACCOUNTANTS

(J.T.SHAH)

PARTNER Chairman Mg.

Director

PLACE : AHMEDABAD DATE:20/04/2011

198

SELECTED NOTES ATTACHED TO AND FORMING PART OF ACCOUNTS FOR THE PERIOD ENDED 31ST DECEMBER, 2010





d. Inventories Inventories at year-end are valued at the lower of cost and net realizable value. The basis

of determining the cost for various categories of inventories is as follows:

(i) In case of Raw Materials, Stores, Spares, Fuel and Packing Materials on FIFO basis. (ii) In case of Finished Goods and Work-In-Progress on FIFO basis.



f. Sales Sales are accounted for on dispatch of goods to the customers and are inclusive of Excise Duty and Sales Tax but net of sales returns and trade discounts.

g. Investments Long Term Investments are stated at its cost.


i. Taxation

i) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per the applicable provisions of the Income Tax Act, 1961.


j. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

199

k. Impairment of Assets The Management Periodically assesses using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes the an impairment loss as the excess of the carrying amount of the asset over the recoverable amount.

l. Earning Per Share Basic earning per share is calculated by dividing net profit after tax for the year attributable to equity share holders of the company by the weighted average number of equity shares issued during the year. Diluted earning per share is calculated by dividing net profit attributable to equity share holders (after adjustment for diluted earnings) by average number of weighted equity shares outstanding during the year.

m. Employee Benefits

(i) The employee and Company make monthly fixed Contribution to Government of India Employee’s Provident fund equal to a specified percentage of the covered employee’s salary, Provision for the same is made in the year in which service are rendered by the employees.

(ii) The Liability for Gratuity to employee, which is a defined benefit plan, is determined on the basis of actuarial Valuation based on Projected Unit Credit method. Actuarial gain/Loss in respect of the same is charged to the profit and loss account.

(iii) Leave encashment benefit to eligible employee has been ascertained on actuarial basis and provided for. Actuarial gain/loss in respect of the same is charged to the profit and loss account.


For the Period Ended

31/12/2010 Rs. (in Lacs)

2009-2010 Rs. (in Lacs)

a)

Letters of Credit Outstanding 1902.84 1738.53

b) Income Tax demands disputed in appeal by the Company/ Income Tax Authorities (Against which the Company has paid amount of Rs. 20.00 Lacs)

277.38 272.60

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

2905.28 2905.28

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

50.90 50.90

e) Service Tax demand disputed in appeal by the Company/Authority 33.48 33.48

f) Claims not acknowledged as debts by the company 1.13 1.13

200

g) Show Cause Notices received from various authorities (Against which the Company has paid amount of Rs. 400.00 Lacs)

137.99 65.85

h) Employees Demands pending before Labour Courts



56. 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 December 2010 is Rs.13.75 Lacs (Previous Year Rs. 694.75 Lacs).

57. 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.

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

Signature to Schedules "1" to "20"

As per our report of

even date attached herewith

FOR, CIL NOVA PETROCHEMICALS LIMITED

FOR, J T SHAH & COMPANY

CHARTERED ACCOUNTANTS

Chairman Mg. Director

(J T SHAH)

PARTNER

Co. Secretary

PLACE : AHMEDABAD

DATE : 20/04/2011

201

15. LEGAL MATTER IN HIGH COURT OF GUJARAT Special Civil Application no. 10768 of 2010 was filed with Hon’ble High Court of Gujarat by some of the group of shareholders in connection with the non listing of Equity Shares of CIL Nova Petrochemicals Limited after the approval of scheme of demerger by Hon’ble High Court of Gujarat on 27th August, 2009. The matter was heard by the Court and thereafter Hon’ble High Court of Gujarat was pleased to pass an order wherein SEBI shall be granting relaxation under Rule 19(2)(B) of SCCR, 1995, subject to the compliance with appropriate Rules & Regulations and the Court order shall be communicated to the concerned Stock Exchange who shall comply within a period of 4 weeks from the date of order dated 21.03.2011.the copy of said order is submitted to the concerned Stock Exchanges and SEBI and the same is also available for the inspection at the Registered Office of the Company along with the other documents as stated herein above in Documents for Inspection.

16. LETTER OF SEBI GIVING RELAXATION OF RULE 19(2)(b) OF SECURITIES CONTRACTS (REGULATION) RULES, 1957 FOR LISTING OF THE EQUITY SHARES OF CIL NOVA PETROCHEMICALS LIMITED.

CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA … · 2 table of contents sr. no particulars page...

Documents

Transcript of CIL NOVA PETROCHEMICALS LIMITED (FORMERLY NOVA … · 2 table of contents sr. no particulars page...