Sarita Synthetics and Industries Ltd. के अकाउंट के लिये नोट

Mar 31, 2009

1) Contingent Liabilities not provided for 2008-09 2007-08

Rs.In Lakhs Rs.In Lakhs

a. Bank Guarantees 21.77.00 62.38

b. Interest on Income Tax under Dispute 0.00 41.62

c. Corporate Guarantee extended by Company on behalf of other bodies corporate to Financial Institutions / Banks 2766.70 2766.70

d. Sales tax under dispute under appeals at

various Levels. 453.51 218.41

e. Dispute with EPDCL of AP Ltd 20.01 20.01

f. Central Excise Including Interest & Penalty. 566.62 873.22

2. Investments (AS-23)

a) Investments in equity shares(unquoted) other than investment in subsidiary companies are valued at cost and the same is supported with buy back agreement.

b) Investment in equity shares(unquoted) in a subsidiary company are treated as current in nature and valued at cost as there are no financial statements prepared by the subsidiary company due to closure of operations

3. Segmental Reporting: (As-17)

The Company operates solely in the Textile segment. Revenue from the windmill is less than 10% of total revenue. Hence segment accounting is considered as not applicable.

4. Employees Terminal Benefits

A) Brief Description: A General description on the type of Defined Benefits Plans as follows

a) Earned Leave Benefit (EL) Accrual - 15 days per year Accumulation can be done for one year only EL accumulated after one year will be encashed while in service.

b) Gratuity

5 days salary for every completed year of service, vesting period is 5 years and the payment is restricted to Rs.350000

6. Related party Disclosure: (AS-18)

The Company has transactions with the following related parties / relatives of related parties on account of share holding by related party and their relatives.

A) Related Party:

Name of the Related Party Nature of Relationship

Smt. G. Saraswathi Chairperson

B) Relatives of Related party:

Shri G. Eswara Rao Vice-Chairman & Managing Director

person - Relative of Related Party.

C) Key Management Personnel:

Shri B.Krishna Murthy C.E.O

7. Lease Rentals (AS-19) : The company purchased mechanized looms from ER Textiles and leased them back. The receipt of lease rentals will commence from completion of payment of specified amount as per the lease agreement. All other lease rental are accounted on accrual basis.

8. Consolidated Accounts (AS-21):

The consolidated financial statements under AS-21 prescribed by ICAI have not been prepared for the following reason:

The Company has a Foreign subsidiary viz., M/s Savitry Textiles [Nepal] Private Limited, Kathmandu. As the Company could not fructify the project, the management is exploring the possibilities for disinvestments., As the control is intended to be temporary and the subsidiary is being held exclusively for disposal in the near future and also not in operation, the consolidation has not been done in view of Clause 11(a) of AS 21. The said company is not operational and no financial statements have been prepared by the subsidiary.

9. Taxes on Income as per (AS-22): The company has made provision for deffered Tax asset and deffered tax liability as per AS22 issued by ICAI of India.

10. a) Term loans both Rupee and Foreign Currency Loans, are secured by first charge on ail movable and immovable assets of the company - both present and future - subject to prior charge on specified current assets of the company created / to be created in favour of the working capital bankers on reciprocal basis. The loans are further secured by personal guarantees of promoters of the company.

b) The working capital borrowings of the company are secured by first charge on all the current assets of the company, both present and future, and by way of a second charge on the fixed assets of the company on reciprocal basis. The loans are further secured by personal guarantees of the promoters.

c) The term loan taken from IRDEA is secured by a specific first charge on the wind farm assets of the company.

11. The company has provided for FBT under Sec 115W of Income Tax 1962 for the year in the accounts amounting to Rs.1,62,621/- (Previous Year Rs.1,58,334/-).

12. a) The company has not provided interest on interest .overdue and penal interest on term loans of IDBLIREDA, IFCI, EXIM BANK and short term loan of Bharat Overseas Bank and ICD of MPSIDC as the company has submitted re-structure/OTS proposals.

b) Some of the Lenders have filed the cases against the company for the recovery of their dues.

13. The companys appeal for being declared as a sick industrial undertaking, is pending before Honble AAIFR.

14. The company has given Corporate Guarantee to banks in favour of other companies and the bankers are asked us to pay the guarantee amount of Rs.2766.99Lakhs. The same is under dispute and company is hoping of settlement of dues by that company, hence no provision has been made in the books of accounts.

15. There is no pending derivates and forward contracts as on balance sheet date.

16. The classification of the suppliers under Micro, small and medium enterprises development Act 2006 is made based on the submission of the registration certificate under the said act by the supplier. The outstanding to the micro, small and medium enterprises more than 16days of closing date is Rs.917482/-for 23 Parties(Previous year Nil)

17. Previous year figures have been regrouped/rearranged wherever considered necessary.