Terms / Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. No dividends were proposed by the Board of Directors for the financial year 2014-2015. In the event of liquidation of the company, equity shareholders will be entitled to receive remaining assets in proportion to the number of shares held by them.

Terms / Rights attached to Preference Shares

The Company has only one class of preference shares having a par value of Rs. 100/- per share. No preference shares have been issued by the Company.

2. Related Party Transactions

Related parties during the year March 31, 2015 :

(a) Directors

(1) Rajababu Kalla

[2] Mr.Anish Shah

[3] Mr.Hansraj Gala

[4] Mr.Sanjay Nandu

[5] Mrs.Forum Shah

(b) Key Managerial Personnel

(1) Rajababu Kalla

[2] Hitesh Shah (CFO)

(c) Relatives of Directors/ Key Managerial Personnel

(1)  Shantilal L Shah                (5) Dhaval Shah - HUF

(2) Sonalben S Shah                  (6) Dhaval S Shah

(3)  Manjari H Shah                  (7) Forum D Shah

(4)  Hitesh S Shah - HUF             (8) Sushila H. Gala

[1] Neelam Metal & Hardware

[2] Gurukul Enterprises Private Limited

[3] Euro Decor Private Limited

[4] Kanch Ghar

[5] Disti Multimedia & Communications Pvt Ltd

[6] Zenith Corporation

[7] Monex Stationers

3. During the years 2011-2012 and 2012-2013, the Company had incurred significant losses which had resulted in erosion of its net worth. The severe fall in the prices of Solar Photovoltaic cells globally is on account of reduced demand which resulted in large inventory at reduced prices, leading to necessity for booking losses and thereby depleting working capital. During the year 2011-2012, there was default in the repayment obligations to banks and the relevant loan accounts viz. Term Loans, Cash Credit Accounts and revolvement of letters of credit.

Consequently, the Company received summons/ notice from the office of Debt Recovery Tribunal-II, Ahmedabad, Gujarat in response to the application filed by State Bank of India Baroda, Gujarat vide O.A. No. 56/2012 for the recovery of their loan under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The hearings of the said case is in process.

The Company has received notices u/s 13(2) of Securitization & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 from the Cosmos Co-op Bank Ltd and the State Bank of India for recovery of its outstanding dues towards various credit facilities extended to the Company from time to time. Further, State Bank of India has taken symbolic possession of immovable property of Optical Disc and Solar Photovoltaic Cells Unit under the Securitization & Reconstruction of Financial Assets & Enforcement of Security (Second) Interest Act, 2002 and in exercise of the powers under Section 13(4) of the said Act read with rule 8 of the security Interest (Enforcement) Rules 2002.

Further, vide an order dated 4th March 2014, issued by Zilla Magistrate (Kutch-Bhuj) directing local Mamlatdar to take physical possesion of the said factory premises and to handover the same to State Bank of India. In response to the said order the Company has filed a writ petition with the Supreme Court of India and obtained a stay order stating that the respondent bank shall be restrained from proceeding further under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

In the financial year 2012-2013, the Company on the basis of the audited accounts for the financial year ended March 31, 2012, and being mandatory, filed the reference u/s 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 before the Hon'ble Board for Industrial & Financial Reconstruction (BIFR). The above reference has duly been registered by the learned Registrar of Hon'ble BIFR and hearings of which are in the process for determination of sickness.

4. Going Concern

The years 2011-2012 to 2014-2015 have been challenging for the global solar cell manufacturers as well as the Indian manufacturers; which on the one hand witnessed steep fall in solar cell prices and on the other hand market flooded with products from Chinese and Taiwanese manufacturers which led to the growth of large Chinese manufacturers.

The Governments in India and other countries are eager to increase the overall share of solar energy by concurrently improving infrastructural conditions, especially through solar parks and schemes like 'development of solar cities', energy efficient green buildings', generation-based incentives, and subsidies and promotion for solar PV devices that are also encouraging PV installation. Recently, in India, it was made mandatory to have domestic content requirement for cell and module for crystalline silicon based plant in all the projects granted under JNNSM Phase1, batch II. Individual states in India, are also adopting policies and programs to promote the expansion of solar power. Further, the Indian Government is considering safeguarding its own industry by some regulation such as anti-dumping for Solar Cells.

In the present situation, the Company is now considering sustainable business model with the various options to restructure the capital base including but not limited to approaching the lender banks for arbitraging the partial debt with equity, concessions and / or waiver in the interest along with haircuts in certain debt portion with an objective to bring it at a serviceable level. Considering the changed and new developments taking place in the Solar Industry and as detailed in the management discussion analysis, the financial statements have been prepared on the basis that the Company is a going concern.

5. Figures of previous year have been regrouped / reclassified wherever necessary.

6. Contingent Liabilities not provided for

(a) The Company for its Optical Disc's manufacturing unit, has imported various Capital Goods under the Export Promotion Capital goods Scheme (EPCG), of the Government of India, through various licenses, at concessional rates of Custom Duty on an undertaking to fulfill quantified exports within a period of eight years from the date of respective licenses. The custom Duties so saved amounts to Rs. 25,38,56,218/- and the corresponding Export obligation as on 31st March 2015 to be fulfilled is Rs. 191,21,59,657/-. If the said Export is not made within the stipulated time period; the company is required to pay the said saved Custom Duty together with interest @ 15% p.a.The Company has filled a reference with hon'ble BIFR petitioning a relief from export obligation of the Company.Furthet the Company has provided in the past bank guarantees in favor of custom authorities amounting cumulatively to Rs. 508,76,000 towards payment of custom duty on account of failure to satisfy such an export obligation.

(b) The Company's Solar Photovoltaic Cells manufacturing unit is located in self owned sector specific Special Economic Zone. According to the SEZ Act, the units should have positive Net Foreign Exchange Earning (NFE), which shall be calculated as per applicable rules in cumulative blocks of five years, starting from the commencement of production. In case the unit does not achieve positive Net Foreign Exchange, the SEZ shall be subject to penalty, that may be imposed by the adjudicating authority.

* Note:- The Company falls under 1st Schedule to Central Excise Tariff Act, 1985 (5 of 1985). The unit was set up after 31-07-2001 and hence eligible for Excise Refund benefit envisaged in Notification No:39/2001-CE dated 31- 07-2001 as amended. The Company also duly applied to Central Excise Department for availing benefit under the said notification and the Department approved the same. The Company commenced commercial production of its first phase on 04-04-2005 with five manufacturing lines and doubled its capacity in January 2007 by adding five more manufacturing lines. The Department took the stand that the eligibility is only for the first phase and will not be applicable for the expansion phase. The Company was duly in receipt of Excise Refund on the first five lines till the financial year 2007-2008, however from financial year 2008-2009 onwards the Department rejected the Excise Refund claim even for the first five lines.

The company, while taking stand that the excise benefit should be made available for the second phase as well, provided for excise refund on the first phase on proportionate basis. Currently the matter is pending with CESTAT (Ahmedabad). The Company had recognised Excise Refund amount of Rs. 63,41,853/- in the year 2008-2009 and Rs. 86,67,688/- in the year 2009-201* on this account, of which the company had received Rs. 1,14,31,016/- as excise refund from the Central Excise Department and Rs. 16,42,522/- were declared as non refundable by the Central Excise Department. Thus for the balance amount of excise refund recognised during the year 2009-1* of Rs. 19,36,003/- will not materialise if the appeal is not disposed of in favour of the company and the same amount continues for the current financial year also.

(d) Claims against the Company not Acknowledged as Debts as on 31st March 2015 amounting to Rs. Nil.

7. Secured loans from the banks are subject to confirmation.

8. The following bank loan and cash credit accounts are subject to confirmation:-

Bank Name & Address                                     Account No.

State Bank of India, Stressed Assets Term Loan A/c No. Management Branch, "Paramsiddhi Complex, 31083458260 2nd Floor, Opp. V.S. Hospital, Ellisbridge, Ahmedabad 380 006, Gujarat

State Bank of India, Stressed Assets Cash Credit A/c No. Management Branch, "Paramsiddhi Complex, 30105861083 2nd Floor, Opp. V.S. Hospital, Ellisbridge, Ahmedabad 380 006, Gujarat

9. The Company has given fixed deposit receipts to the Cosmos & SBI bank as LC margin and bank gaurantee amounting to Rs. 2,77,36,000/- which are subject to confirmation.

10. Sundry Debtors and Creditors balances are subject to confirmation.