UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K
 FOR ANNUAL AND TRANSACTION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
 SECURITIES AND EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended    September 30, 1999

[ ]  TRANSACTION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _______________ to _________________

                         Commission File Number 33-11479

                           SYNTHETIC INDUSTRIES L.P.
-------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

            Delaware                                     13-3397585
---------------------------------- ---------------- ------------------
(State or other jurisdiction                       (I.R.S.Employer
 of incorporation or organization)                   Identification No.)


         309 LaFayette Road, Chickamauga, Georgia              30707
------------------------------------------------------------ ----------
            (Address of principal executive offices)        (Zip Code)


                                 (706) 375-3121
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section
12(b) of the Act:

 Title of Class:        Name of each exchange on which
    None                   Title of class registered
                                      None

Securities registered pursuant to Section
12(g) of the Act:

                      Units of Limited Partnership Interest
                                (Title of Class)

     Indicate  by check  mark  whether  Registrant  (1) has  filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.  Yes X  No  ___


     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.



PART I


ITEM 1.  BUSINESS


General

         Synthetic  Industries L.P. (the "Partnership") is a limited partnership
organized  under  the laws of the  state of  Delaware.  In  December  1986,  the
Partnership  acquired all of the issued and outstanding shares (the "Shares") of
the capital stock of Synthetic  Industries,  Inc., a Delaware  corporation  (the
"Company"). As of September 30, 1999, the Partnership owned approximately 66% of
the Company's common stock, par value $1.00 per share (the "Common Stock").  The
Company manufactures and markets a wide range of polypropylene-based  fabric and
fiber products designed for industrial applications.

     Since its  organization  in 1986, the Partnership has conducted no business
except (i) engaging in the  transactions  described in a  confidential  offering
memorandum dated January 16, 1987, as supplemented, relating to the offering and
sale of units of limited partnership  interest in the Partnership (the "Units");
and (ii) owning and voting the Shares.  The  Partnership's  principal  executive
offices are located at 309 LaFayette Road,  Chickamauga,  Georgia 30707, and its
telephone number is (706) 375-3121.

        The sole general partner of the Partnership  is SI  Management  L.P.,  a
Delaware limited partnership  ("Management L.P." or the "General Partner").  The
sole general partner of Management L.P. is Synthetic Management G.P. ("Synthetic
G.P.").  Synthetic  G.P. is a Georgia  general  partnership  whose  partners are
controlled by certain members of the Company's senior management. See "Directors
and  Executive  Officers - Partners of  Synthetic  G.P." Since their  respective
dates of the formation,  neither  Synthetic G.P. nor Management L.P. has engaged
in any business,  other than  Synthetic  G.P.  acting as the general  partner of
Management  L.P. and Management  L.P. acting as the general partner of Synthetic
L.P.

Recent Events

      On November 5, 1999 the Partnership  entered into a Stockholder  Agreement
with SIND Holdings, Inc., a company organized by Investcorp, a global investment
group, and SIND Acquisition,  Inc., a wholly-owned  subsidiary of SIND Holdings,
Inc.  (SIND Holdings and SIND  Acquisition  being  hereafter  referred to as the
"Purchasers").  Pursuant to the Stockholder  Agreement the Partnership agreed to
tender all of the shares of common  stock (the  "Shares")  it owned in Synthetic
Industries,  Inc. (the  "Company") to the  Purchasers  pursuant to a cash tender
offer that would be made to  stockholders  of the Company in  accordance  with a
Merger  Agreement,  dated  November  5, 1999,  between  the  Purchasers  and the
Company.  The cash  tender  offer  was  commenced  on  November  12,  1999,  the
Partnership  tendered  the  Shares  and on  December  15,  1999 the  Partnership
received  approximately  $188,000  in  cash  in  payment  for  the  Shares.  The
Liquidating  Trustee  promptly  invested these proceeds in U.S.  Treasury Bills,
which now comprise all of the assets of the Partnership.

     Pursuant to the  Stipulation  and Agreement of  Settlement  approved by the
United States  District  Court for the Northern  District of California to which
the Partnership is subject,  the Liquidating Trustee has made application to the
Court to make a cash  distribution  to the partners of the  Partnership  and has
sent Payment Direction Letters to all limited partners of the Partnership.  Upon
approval  by  the  Court  and  return  of the  Payment  Direction  Letters,  the
Liquidating  Trustee  intends to distribute  $160,000 in cash in accordance with
the terms  governing  liquidating  distributions  set  forth in the  Partnership
Agreement.  The  remainder  of the  cash  now  held by the  Partnership  in U.S.
Treasury Bills will be retained in that form by the Liquidation  Trustee pending
satisfaction  of  all  of  the  Partnership's  liabilities,  including,  without
limitation, the attorneys' fees payable to plaintiff's counsel in the litigation
that was the subject of the  Stipulation  and Agreement of  Settlement,  amounts
owed to the Company and the  incidental  expenses  and  liabilities  incurred in
connection  with the  liquidation.  On  December  30,  1999,  the United  States
District  Court for the Northern  District of California  awarded $6,839 in fees
and $237 in expenses to plaintiff's counsel, and directed an additional $13, 678
to be held in reserve by the Liquidating  Trustee,  subject to the exhaustion of
any appeals or further  court  order.  In addition,  at December  30, 1999,  the
Partnership  owed the  Company  $1,396  incurred  in  connection  with  plans of
dissolution that were not consummated.  The Liquidating Trustee expects that all
liabilities of the Partnership  will not exceed the amount of assets retained by
the Partnership. The Liquidating Trustee can give no assurances,  however, as to
when  and what  amount  of the  reserve  will be  released  by the  Court,  and,
therefore,  no  prediction  can be made as to when  and in what  amount  a final
liquidating distribution of the Partnership will be made.

The following  discussion on  business  relates to the  Company.

Products

     The  Company  manufactures  and sells a wide  array of  polypropylene-based
industrial  fibers and  fabrics  along three  principal  product  lines:  carpet
backing,  construction  materials products and technical  textiles.  The Company
manufactures  five basic yarn and fiber types,  from which  approximately  2,000
products  are  manufactured  to serve  in  excess  of 65  end-use  markets.  The
following table sets forth the Company's net sales  attributable to each product
line,  and the  percentage of total net sales  represented by each, for the past
five fiscal years:

<TABLE>

                                                        Year Ended September 30,

                        1999              1998                 1997                 1996               1995
                                                        (Thousands of dollars)
<S>               <C>        <C>     <C>        <C>         <C>        <C>   <C>        <C>      <C>       <C>
Carpet Backing    $172,024   44.7%   $168,998   45.8%       $166,219   48.1% $146,491   48.9%    $133,025  49.0%

Construction       139,835   36.3     128,318   34.8      114,611   33.2       97,043   32.4       82,933  30.6
  Materials

Technical Textiles  72,963   19.0      71,680   19.4       64,742   18.7       55,998   18.7       55,469  20.4
                    ------   ----      ------   ----      -------   ----       ------   ----       ------  ----

  Net Sales       $384,822  100.0%   $368,996  100.0%    $345,572  100.0%    $299,532  100.0%    $271,427 100.0%
                  ========  ======   ========  ======    ========  ======    ========  ======    ======== ======
</TABLE>


     Carpet Backing

     Carpet backing is the Company's  oldest and largest product line consisting
of primary  and  secondary  fabrics  in a variety of styles and widths  that are
manufactured  from  polypropylene  raw  materials.  Primary  carpet backing is a
tightly woven  material into which carpet yarn is tufted in the  manufacture  of
broadloom floorcoverings.  Secondary carpet backing, which forms the base of the
carpet,  is the coarser  woven  fabric that is  laminated  to the back of tufted
broadloom to insure both carpet integrity and dimensional stability. In addition
to its broad  range of primary  and  secondary  backing,  the  Company  produces
SoftBac(TM),  a  revolutionary  carpet  backing  system  co-developed  with Shaw
Industries,  Inc. ("Shaw"),  the Company's largest customer.  SoftBac is a soft,
flexible  carpet backing with a "fleecy"  texture that makes it easier to handle
and provides for more efficient  installation.  Along with the ease of handling,
SoftBac  requires  fewer seams since it can bend and fold through  problem areas
such as tight corners,  passageways and closets. The Company entered the modular
carpet tile backing market in February 1997 through the Spartan Acquisition.

    Construction Materials

     The  Company's  construction  materials  product  line offers two  distinct
product lines to the construction  industry:  geosynthetic products and concrete
reinforcement  fibers.  Construction  materials has achieved  rapid growth since
1993 when the Company enhanced its channels of distribution for Fibermesh(R) and
expanded  into the  production  of nonwoven  geotextiles.  In 1999,  the Company
completed the BonTerra Acquisition,  broadening the geosynthetic product line to
include  natural  erosion  control  fabrics.  Within the  construction  material
product  line,  geotextile  products  principally  serve the  environmental  and
infrastructure  markets,  with  end uses  such as  landfill  waste  containment,
erosion   control  and  soil   stabilization,   separation  and   reinforcement.
Fibermesh(R)  and Novocon provide  reinforcement  of  conventional  and pre-cast
concrete.

     Geosynthetic  Products. The Company's geosynthetic product line consists of
erosion control fabrics,  geotextiles,  and soil fibers.  These products control
erosion and capture sediment;  provide filtration,  separation and reinforcement
of soils;  improve  engineering  properties  of native soils;  protect  landfill
liners;   and  extend  pavement  life.  The   specifications  of  the  Company's
geosynthetic  fabrics and fibers vary  depending  on specific  site  conditions,
including such factors as slope angles, water flow velocities,  climate, runoff,
soil  profile  and  ultimate  land  use.  The  Company's  geosynthetic  products
generally  comply  with  state  agency  guidelines  pertaining  to  geosynthetic
products issued to date.

     The Company produces a variety of nonwoven and woven geotextiles for use in
landfill,  roadway and mining construction.   The Company's  LANDLOK(R)  erosion
control  products are used in storm water  drainage  channels,  steep slopes and
shoreline protection.  These products hold the soil in place, while allowing and
supporting  vegetative  growth.  LANDLOK(R)  products are an  environmentally
friendly and  aesthetically  pleasing  alternative  to rock or concrete  erosion
control methods.

     Concrete  Reinforcement.   The  Company  pioneered  the  practical  use  of
polypropylene  fibers  as  a  secondary  reinforcement  for  concrete  with  the
development and  introduction  of  Fibermesh(R)   to  the  concrete  industry in
1983.  The  Company  offers  both steel  fibers for  primary  reinforcement  and
Fibermesh(R)  polypropylene  fibers  for  secondary  reinforcement  and  plastic
shrinkage crack minimization.  The addition of Fibermesh(R) polypropylene fibers
to concrete  inhibits the formation of early  cracking while  providing  greater
impact,  abrasion,  and shattering resistance from external forces. The hardened
fibrous  concrete  has lower  permeability  and a level of  toughness  (residual
strength) not found in plain concrete. Primary applications for Fibermesh(R) are
residential and commercial slabs, elevated decks,  pre-cast products,  shotcrete
tunnels, canals and pools, and whitetopping  restoration of deteriorated asphalt
pavements and parking areas.  Specific  applications  for Novocon's steel fibers
include industrial slabs on grade, airport runways,  blast resistant structures,
and road and water tunnels.


    Technical Textiles

    Technical  textiles  produced by the Company are  products  and systems that
offer high  performance  solutions  for niche  markets  consisting  primarily of
specialty  fabrics,  industrial  yarns and  fibers.  The  specialty  fabrics are
manufactured  in  a  variety  of  widths,   weights,   permeability  ranges  and
dimensional  configurations  primarily from  polypropylene  and other  synthetic
fibers.  Customers  use these  fabrics to  manufacture  products used in diverse
applications  such  as  furniture  and  bedding  construction,  filtration,  and
agriculture.  Furniture and bedding  construction  products consist of woven and
nonwoven decking and padding,  mattress ticking,  dust covers, spring insulators
and flange materials.

    The Company also sells its industrial  yarns and fibers directly to weavers,
knitters, and non-woven  manufacturers who produce niche market products such as
automobile upholstery and air and water filtration media.


Marketing and Sales

     Carpet Backing.  The Company sells its carpet backing products to customers
in the carpet  industry,  most of whom are carpet  manufacturers  located in the
United  States.  In fiscal  1999,  the  Company's  five largest  carpet  backing
customers accounted for approximately 84.8% of its total net sales to the carpet
industry.  In  fiscal  1999,  sales  to  Shaw  Industries,  Inc.  accounted  for
approximately  58.4% of net carpet backing sales and approximately  26.1% of the
Company's total net sales.

     The  Company's  carpet  backing  products  are sold  primarily  through the
Company's  sales force that is directed  from a central sales office in Calhoun,
Georgia.  All of the sales  managers have  significant  industry  experience and
monitor ongoing  product  requirements,  styling changes and competitive  trends
affecting their customers.

     Construction  Materials.  The  Company's  broad product line is marketed in
conjunction with its industry expertise in application and material engineering,
as well as expertise in construction design and installation, as cost effective,
longer lasting  alternatives to traditional  construction  methods.  Its ongoing
marketing  communications program for owners,  architects,  specifying agencies,
including both the public and private sectors, and the engineering  community as
a whole, is designed to continue to build awareness of both product capabilities
and  in-house  and  technical  expertise,  and to expand  interest in and use of
concrete reinforcing fibers and geosynthetics.

     The Company's  geosynthetic products are sold primarily in North America to
regional and national  distributors,  installers of landfill  liners and various
governmental   transportation   departments,   port   authorities  and  waterway
commissions.   International   sales,   which  comprise   approximately   8%  of
geosynthetic sales, are sold through worldwide  distribution networks. In fiscal
1999,   the  five  largest   geosynthetic   product   customers   accounted  for
approximately 24.3% of the Company's total net sales in this product line.

     Fibermesh(R)  and Novocon  concrete  reinforcing  fibers are sold through a
direct sales force to ready-mix  concrete companies and precast concrete product
manufacturers  located  primarily in North America and the United  Kingdom.  The
sales force operates out of eleven regional  offices in the United States and in
Chesterfield, England. In addition, Fibermesh(R) is sold through a contract with
Master   Builders,   Inc.,   a   worldwide   leader  in   concrete   technology.
Internationally,  in addition to the United  Kingdom  sales force,  construction
industry  product  distributors  market concrete  reinforcing  fibers in over 50
countries.  In fiscal 1999, the ten largest concrete reinforcing fiber customers
accounted  for  approximately  12.5% of the  Company's  total  net sales of this
product line.

     Technical  Textiles.  The Company sells its specialty  fabrics to a diverse
group of approximately 400 manufacturers  located primarily in North and Central
America and the Pacific Rim countries.  The Company sells its  industrial  yarns
and fibers to a diverse  group of  approximately  100  manufacturers  located in
North America and Europe.  In fiscal 1999, the Company's five largest  technical
textile customers  accounted for approximately  16.1% of the Company's total net
sales of technical  textiles.  The Company's  technical textiles are marketed by
salespersons through sales offices in Gainesville and Calhoun,  Georgia, Hickory
and High Point, North Carolina, Tupelo, Mississippi and Chesterfield, England.


Competition

     The markets  for the  Company's  products  are highly  competitive.  In the
manufacture and sale of carpet backing, which represented  approximately 45% and
46% of the  Company's  total  sales in fiscal 1999 and 1998,  respectively,  the
Company  competes  primarily with BP Amoco p.l.c.  ("BPAmoco") and certain other
companies.  BPAmoco  has the  dominant  position  in the carpet  backing  market
worldwide.  In the United States,  only the Company and BPAmoco  produce a broad
range of primary and secondary carpet backing in a variety of styles and widths.
The Company  competes in the carpet  backing  market  primarily  on the basis of
quality, availability, service, price and product line variety, providing carpet
manufacturers with a reliable alternative source of supply to BPAmoco.

     In the manufacture  and sale of the Company's  other products,  the Company
generally  competes  with a  number  of  other  companies,  some  of  which  are
significantly larger and have substantially  greater resources than the Company.
The Company's  primary  competitors  in the  construction  materials  market are
BPAmoco and T.C. Mirafi Corporation with respect to geotextiles,  North American
Green, Inc. with respect to environmental and erosion control products, and W.R.
Grace & Co.,  which  markets  but does not  manufacture  concrete  reinforcement
fibers,  with  respect to concrete  reinforcement.  The Company  competes in the
concrete reinforcement fiber market primarily on the basis of product design and
technical service.  In some applications,  Fibermesh(R) and Novocon steel fibers
also  compete  with welded wire fabric on the basis of product  performance  and
cost. The Company competes in the construction  materials market on the basis of
product line breadth and quality, price, and the custom design,  engineering and
other  services it provides to  customers.  With respect to technical  textiles,
competitors  vary depending upon the specific market niche. The Company competes
in each  segment of the  technical  textiles  market  primarily  on the basis of
service, quality, innovation and product line variety.


Manufacturing Process

     Polypropylene,  a chemically  inert plastic derived from petroleum,  is the
basic raw material  used in the  manufacture  of primarily  all of the Company's
products  today.  The  Company  believes  it is a  technological  leader  in the
conversion of polypropylene into woven and nonwoven polypropylene  products. The
expertise of the Company's  research and  development  and  marketing  staff has
enabled the Company to develop  innovative  products,  frequently in response to
specific customer needs.

     Woven fabrics are produced by interlacing  thousands of strands of extruded
yarn at right angles to one another.  The manner in which the yarn is interlaced
determines the type of weave.  Woven fabrics are  characterized  by strength and
dimensional  stability.  The Company's woven fabric products include primary and
secondary  carpet  backing,  geotextiles,  erosion control fabrics and specialty
fabrics for the filtration, construction and agricultural markets.

     Nonwoven  fabrics are produced by first  stacking  several layers of webbed
short length fibers and then  entangling  the layers by punching  barbed needles
through the layers. The Company's nonwoven fabric products include  geotextiles,
erosion control fabrics,  furniture and bedding  construction  fabrics and spill
control fabrics.

     The Company believes that it has state-of-the-art  manufacturing capability
in  both  its  woven  and  nonwoven  product  lines  and  is  one  of  the  most
cost-efficient producers in the markets in which it participates.  The Company's
three primary manufacturing  processes are extrusion,  weaving and needlepunched
nonwovens.

     Extrusion.  Much of the  Company's  expertise  has  been  developed  in its
extrusion  processes.   Engineering  the  polymeric  raw  materials  during  the
extrusion  process creates many of the product's  specification  properties.  In
addition  to yarns and fibers for  conventional  end-uses,  the Company has also
developed value-added products through the use of additives including those that
resist  sunlight  degradation.  The  Company  owns and  operates  several of the
world's largest polypropylene staple fiber lines. Most of the Company's extruded
products  are  consumed  internally  and become  value-added  woven and nonwoven
fabrics,  but  some  are  sold to  weavers,  knitters,  nonwoven  producers  and
convertors.

     Weaving.  The yarns  produced in the Company's  extrusion and yarn spinning
operations  are woven on looms to produce the wide  variety of fabrics  that the
Company sells  through all of its marketing  divisions.  Fabric  properties  are
engineered to industry  specifications  by altering  constituent yarns and weave
patterns.   Looms  are  generally   interchangeable  to  weave  carpet  backing,
geotextiles and certain agricultural fabrics.

     Needlepunched Nonwovens.  The Company has a state-of-the-art  needlepunched
nonwoven  fabric  facility.  This  modern  plant  produces a new  generation  of
engineered  cost-effective  fabrics for the  geotextile,  furniture  and bedding
construction and chemical spill cleanup markets.

     The Company  maintains a complete rigorous quality control program centered
on  statistical  process  control and customer key  measures.  Each stage of the
process from the raw material to the final product is monitored  using  standard
procedures  and test methods which satisfy the quality  control and  consistency
standards of ISO 9002 established by the International  Standards  Organization.
In 1997,  the  Company  received  ISO 14001  certification  for  complying  with
internationally  recognized environmental standards - one of the first companies
in the United States to achieve such certification.

     The Company's production equipment is capable of manufacturing a variety of
woven and nonwoven polypropylene  products. This versatility enables the Company
to alter the product mix within its woven and nonwoven product lines in response
to market demand or to take advantage of specific product opportunities.

     The Company's plants are run on a continuous  24-hour per day basis,  seven
days a week, 350 days per year. Orders are typically filled from inventory.


Research and Development

     The  Company's  research  and market  development  is focused  primarily on
development and as such the Company  engages in product design,  development and
performance  validation to improve existing products and to create new products.
The Company expended  approximately $9.9 million  (approximately  2.6% of sales)
and $8.1 million (approximately 2.2% of sales) on Company-sponsored research and
market development activities in fiscal 1999 and fiscal 1998, respectively.

International Operations

     The Company conducts its foreign sales operations  through  subsidiaries in
Europe and a network of distributors worldwide. The aggregate sales (principally
of construction  materials products) by such foreign  subsidiaries and marketing
divisions were  approximately  $8.3 million,  $8.0 million,  and $6.6 million in
fiscal year 1999, 1998 and 1997,  respectively.  International sales from United
States  operations  were  approximately  $31.8 million,  $27.0 million and $30.1
million in fiscal years 1999, 1998 and 1997,  respectively.  Total international
sales were  approximately  10.4%,  9.4% and 10.6% of net sales for fiscal  1999,
1998 and 1997, respectively.


Raw Materials

     Polypropylene,  which is a petroleum derivative,  is the basic raw material
used in the  manufacture of  substantially  all of the Company's  products.  The
Company currently  purchases  polypropylene in pellet form principally from five
suppliers, with Fina Oil & Chemical Company being the Company's largest supplier
of  polypropylene.  These purchases are generally made pursuant to long-standing
arrangements.


Regulation

     The  Company is subject to  federal,  state and local laws and  regulations
affecting its  business,  including  those  promulgated  under the  Occupational
Safety  and  Health Act and by the  Environmental  Protection  Agency or similar
state  agencies.  Many of the  Company's  construction  materials  products have
applications  that are  subject to  building  code  association  guidelines  and
specifications  and  highway  department  guidelines.  Obtaining  the  necessary
approvals  can delay new  product  introductions  in some areas.  Moreover,  the
enactment of new  legislation  or the issuance of new guidelines may require the
Company to modify its existing  geotextile and erosion  control fabric  products
and may also delay the Company's  introduction  of new  geotextiles  and erosion
control fabric products.

     The Company's  expenditures to date in connection with such federal,  state
and local laws and  regulations  have not been material to its  operations.  The
Company  believes it is  currently in  substantial  compliance  with  applicable
governmental regulations.


Environmental Compliance

     The Company is subject to a broad range of federal,  state,  and local laws
and  regulations  relating to the pollution and  protection of the  environment.
Among the many  environmental  requirements  applicable  to the Company are laws
relating to air emissions,  wastewater discharges, and the handling, disposal or
release  of solid and  hazardous  substances  and  wastes.  Based on  continuing
internal review and advice from  independent  consultants,  the Company believes
that it is currently in substantial  compliance  with  applicable  environmental
requirements.

     The  Company is also  subject to laws,  such as the  federal  Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), that
may impose liability  retroactively and without fault for releases or threatened
releases of hazardous  substances at on-site or off-site locations.  The Company
is not aware of any  releases  for which it may be  liable  under  CERCLA or any
analogous provision.

     Actions by federal,  state, and local  governments in the United States and
abroad concerning environmental matters could result in laws or regulations that
could increase the cost of producing the products manufactured by the Company or
otherwise adversely affect demand for its products.  For example,  certain local
governments  have  adopted  ordinances  prohibiting  or  restricting  the use or
disposal  of  certain  polypropylene  products.   Widespread  adoption  of  such
prohibitions  or restrictions  could  adversely  affect demand for the Company's
products  and  thereby  have a material  adverse  effect  upon the  Company.  In
addition,  a decline in consumer  preference for  polypropylene  products due to
environmental  considerations  could have a  material  adverse  effect  upon the
Company.

     Most  of the  Company's  manufacturing  processes  are  mechanical  and are
therefore  considered to be  environmentally  benign.  Polypropylene  resins are
readily recyclable,  and the Company recycles  post-industrial waste for certain
of its  products.  In addition,  each of the Company's  manufacturing  sites has
equipment  and  procedures  for  reclaiming a majority of  internally  generated
scrap,  thus reducing the amount of waste sent to local landfills.  As a result,
the Company does not currently  anticipate  any material  adverse  effect on its
operations,  financial  condition,  or  competitive  position as a result of its
efforts to comply with  environmental  requirements.  Some risk of environmental
liability is inherent in the nature of the Company's business,  and there can be
no assurance that material environmental  liabilities will not arise. It is also
possible that future  developments  in  environmental  regulation  could lead to
material environmental compliance or cleanup costs.


Order Backlog

     The Company  generally sells its products  pursuant to customer orders that
are either satisfied out of inventory or from the shipment of newly manufactured
products promptly following receipt of an order. Accordingly,  the dollar amount
of backlog  orders  believed to be firm is not  significant or indicative of the
Company's future sales and earnings.


Employees

     As of September 30, 1999, the Company  employed 2,844 persons in the United
States,  of whom 631 were  salaried  employees  and the  remainder  were  hourly
employees.  None of the Company's employees are unionized. The Company has never
experienced  any  strikes  and  believes  its  relations  with  employees  to be
satisfactory. The Company employs 15 individuals in the United Kingdom.


Patents and Trademarks

     The Company owns or is licensed  under  several  United  States and foreign
patents.  While  these  patents  are helpful to the  Company's  business,  it is
believed that a loss of patent  exclusivity  would not be materially  adverse to
the Company's business.

     The  Company  has   registered   several  of  its   trademarks,   including
FIBERGRIDS(R)  ,  FIBERMESH(R) , LANDLOK(R),  and NOVOCON with the United States
Patent and Trademark office and with several foreign trademark offices.


ITEM 2.  PROPERTIES

         The Partnership does not own or lease any physical properties.




ITEM 3.  CLAIMS AND LEGAL PROCEEDINGS

         The Company and its subsidiaries are parties to litigation  arising out
of their business  operations.  Such  litigation  primarily  involves claims for
personal  injury,  property  damage,  breach of  contract  and claims  involving
employee relations and certain administrative proceedings.  The Company believes
such claims are either adequately  covered by insurance or do not involve a risk
of material loss to the Company.

         In connection  with a  dissolution  of the  Partnership,  the Company's
majority stockholder,  that was proposed in 1997, the Company, its directors and
certain other of the  Company's  officers who were  affiliated  with the general
partner of the  Partnership  (the "General  Partner") were named in two putative
class and  derivative  action  lawsuits  filed in  California  federal court and
Delaware state court by certain limited  partners of the  Partnership.  On April
16, 1999,  preliminary  approval of a settlement  agreement in  connection  with
these lawsuits was granted by the United States  District Court for the Northern
District of  California.  On May 24,  1999,  the  settlement  was granted  final
approval  by the United  States  District  Court for the  Northern  District  of
California and the California  action was dismissed with prejudice.  On July 31,
1999, the Delaware  action was dismissed with prejudice by the Delaware Court of
Chancery.

         Pursuant to the settlement  agreement,  an independent committee of the
Company's  Board of Directors (the  "Committee")  commenced in June 1999 a sales
process during which the Committee, with the help of a financial advisor, sought
offers from  qualified  buyers to purchase the Company.  On August 31, 1999,  in
accordance  with the terms of the  settlement  agreement,  the  General  Partner
resigned,  which caused the  dissolution of the  Partnership,  and a liquidating
trustee was  appointed to wind up the affairs of the  Partnership  in connection
with the aforementioned sales process. On November 5, 1999, at the conclusion of
the sales process,  the Company  entered in an agreement and plan of merger with
SIND  Holdings,  Inc.,  a  company  organized  by  Investcorp,  S.A.,  a  global
investment group, and SIND Acquisition,  Inc., a wholly owned subsidiary of SIND
Holdings,  Inc.  Pursuant to the merger  agreement,  on November 12, 1999,  SIND
Acquisition,  Inc.  commenced a cash tender offer for all outstanding  shares of
the Company's common stock. The Partnership,  which owned  approximately  66% of
the  outstanding  common  stock of the  Company,  tendered  its  shares  to SIND
Acquisition,  Inc.  pursuant to an  agreement  that was entered into at the same
time as the merger  agreement.  On  December  14,  1999,  pursuant to the merger
agreement,  following the tender offer, SIND  Acquisition,  Inc. merged with and
into the Company, resulting in the Company becoming a wholly owned subsidiary of
SIND Holdings, Inc.

Acosta and Alvarez Matters

         Prior to March 23, 1999,  approximately 158 plaintiffs had filed claims
against  Kaufman  and Broad Home  Corporation  Including  its  subsidiaries  and
affiliates  ("Kaufman  and Broad") in two separate Los Angeles  County  Superior
Court cases (the "Acosta and Alvarez  Matters") each of which alleged defects in
fiber  reinforced  concrete  slabs.  On or about March 23,  1999,  the  Company,
Kaufman and Broad and the plaintiffs  entered into a settlement  agreement which
resulted in the settlement of all claims against Kaufman and Broad. On April 29,
1999, the plaintiffs in the Acosta and Alvarez Matters filed amended  complaints
which  named the Company as a defendant  in those  respective  actions and which
consolidated  the actions in connection  with claims that  Fibermesh(R)  used in
concrete slabs at the plaintiffs' homes was defective. In the amended complaint,
the  plaintiffs  claimed  causes of action based upon strict  liability,  fraud,
negligence,  intentional infliction of emotional distress, and breach of implied
warranty.  In response to a demurrer  filed on behalf of the Company,  the court
dismissed the intentional infliction of emotional distress claim. Thereafter, in
July , 1999,  the  plaintiffs  filed an amended  complaint in which they set out
claims for strict liability,  fraud, negligence, and breach of express warranty.
In September , 1999,  in response to a demurrer  filed on behalf of the Company,
the court dismissed the breach of express warranty claim.

         Extensive  sampling  and testing is being done on behalf of the Company
of  all  homes  involved  in  this  litigation.  That  testing  has  shown  that
approximately  forty  of the  plaintiffs  do not have  any  Fibermesh(R)  in the
concrete which was used in connection in the  construction  of their homes.  The
Company  anticipates these plaintiffs will be dismissed from the lawsuit.  After
the  sampling is  completed,  off site testing will be done which will assist in
determining  the  cause  of any  construction  defects  in the  concrete  in the
plaintiffs'  homes.  Minimal  discovery has been done pending the  completion of
sampling and testing at the plaintiffs homes. Depositions of the plaintiffs will
begin in late January,  2000. Therefore,  it is too early to predict the outcome
of these  cases  except  for  approximately  forty  plaintiffs  who the  Company
anticipates  will be  dismissed  because  the  concrete  in their  homes did not
contain  Fibermesh(R).  The Company  intends to  vigorously  defend  against all
claims by the plaintiffs in these matters.


Hicks Matter

         On October 1, 1998, three  individuals  filed a lawsuit against Kaufman
and  Broad in Los  Angeles  County  Superior  Court  (the  "Hicks  Matter")  and
requested  that the court grant class action status to the lawsuit.  In response
to the complaint, Kaufman and Broad denied the plaintiffs' allegations and filed
a cross-complaint  against the Company. The Company has answered the Kaufman and
Broad cross-complaint and denied generally and specifically the allegations that
Kaufman and Broad had been  injured or was entitled to any relief by any reason,
act or omission by or on behalf of the Company. Subsequently, at a hearing which
as held on November 8, 1999, the court announced that it would deny class action
certification to the complaint and dismiss all class action claims in this case.
The  effect  of this  ruling is to leave  three  plaintiffs  in this  litigation
involving two homes.  Based on the limited  discovery  which has been done as of
this time, it appears that there are no personal  injury claims on behalf of the
plaintiffs  and that their property  damage claims are limited.  While it is too
early to predict the outcome of this case, if there were an adverse outcome,  it
would not have a  material  effect on the  Company's  results of  operations  or
financial condition. The Company intends to vigorously defend against all claims
by the plaintiffs in this matter.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matters were submitted to a vote of the  Partnership's  security  holders
during the fourth quarter of the fiscal year covered by this Annual Report.


<PAGE>


                                     PART II



ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY
           AND RELATED STOCKHOLDER MATTERS

    There is no  established  trading  market for the Units.  In  addition,  the
limited  partnership  agreement of the  Partnership  (the  "Limited  Partnership
Agreement") places  restrictions on the  transferability of Units. No transferee
of all or any part of a Unit may be  admitted  to the  Partnership  as a limited
partner  ("Limited  Partner")  without the written  consent of Management  L.P.,
which consent may be withheld in the absolute  discretion of Management L.P. The
Limited  Partnership  Agreement  also provides that the transfer of the whole or
any  portion  of a Unit shall not be  effective  to entitle  the  transferee  to
receive distributions of cash or other property from the Partnership  applicable
to the Unit acquired by reason of such transfer, unless Management L.P. consents
in writing to such transfer.

    The Partnership has made no distributions of any kind since its organization
in 1986.  The Company is currently  prohibited  under a loan  agreement with its
senior  lenders from paying cash  dividends,  or making certain types of capital
distributions.


ITEM 6.  SELECTED FINANCIAL DATA

     The selected consolidated financial data presented below for, and as of the
end of, each of the fiscal  years in the five year period  ended  September  30,
1999 have been derived from the  Partnership's  audited  consolidated  financial
statements.  The consolidated  financial statements as of September 30, 1999 and
1998 and for the three-year period ended September 30, 1999 and the accountant's
report  thereon  are  included  in  Item 8 of this  Form  10-K.  Dollars  are in
thousands, except share and per share data.
<TABLE>

                                                           Year Ended September 30,
                                      1999           1998           1997           1996          1995
                                    ------         ------         ------          -----        ------

<S>                                  <C>           <C>            <C>           <C>           <C>
Summary of Operations Data:
Net sales                            $384,822      $368,996       $345,572      $299,532       $271,427
Gross profit                          133,042       122,319        112,385        91,211         76,721
Operating income                       44,821        48,695         50,291        37,813         28,687
Income from continuing operations
  before provision for income taxes,
  minority interest in subsidiary net income
  and extraordinary item               24,391        29,451         29,552        14,341          5,436
Income from continuing operations
  before minority interest in subsidiary net
  income and extraordinary item        14,737        17,596         17,011         7,441          1,936
Income from continuing operations
  attributable to limited partners      9,357        11,314          3,165         7,367          1,917
Extraordinary item - loss from early
  extinguishment of debt                    -             -        (11,950)            -              -

Net income                              9,451        11,429          3,197         7,441          1,936

Income from continuing operations
per limited partnership unit          $11,696       $14,143          $3,956       $9,209         $2,396
Limited partnership units outstanding     800           800            800           800            800



                                                              As of September 30,
                                       1998            1998           1997          1996           1995
                                      -----          ------         ------        ------         ------

Balance Sheet Data:
Working capital                       $92,230       $85,602        $88,032       $63,418        $69,041
Total assets                          459,938       439,851        394,795       323,756        312,302
Long-term debt                        231,221       236,843        220,464       194,353        192,048
Partners' Capital                      90,478        80,545         68,876        65,185         57,758

</TABLE>



ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

     As previously  discussed,  since its  organization  in 1986 and  subsequent
admission of Limited Partners,  the Partnership has conducted no business except
owning and voting the Shares. As a result of its public offering of Common Stock
in November 1996, the Company had 8,682,067  shares of Common Stock  outstanding
as of  September  30,  1999,  of  which  approximately  66%  was  owned  by  the
Partnership.  As the Partnership  has no independent  operations or assets other
than its investment in the Company,  the Partnership's  financial statements are
substantially  identical  to those of the  Company,  with the  exception  of the
minority  interest and amounts due the Company for expenses  paid by the Company
on behalf of the  Partnership.  As a result,  the  discussion  and  analysis  of
financial  condition  and results of operations  presented  below relates to the
operations of the Company, except as disclosed.  Accordingly,  all references to
fiscal year refer to the Company's fiscal year which ends on September 30th.

     The  following  discussion  of  the  financial  condition  and  results  of
operations of the Partnership does not give effect to the sale of the Company as
described in recent events aand relates only to the results of the Company as of
September  30,  1999 and  should  be read in  conjunction  with the  information
contained in the Consolidated Financial Statements, including the notes thereto.
The  following  discussion  includes  forward-looking  statements  that  involve
certain risks and uncertainties.  See "Forward-Looking  Statements." Dollars are
in thousands.

Overview

     The Company's net sales in recent years have  increased due to a variety of
factors,  including generally  increasing sales volumes as a result of growing a
demand for the Company's  products,  the Company's ability to expand its markets
through development of new products and acquisitions.

     The Company's gross profit has increased due primarily to increasing  sales
volumes,  continued  diversification  of its  product  line into  higher  margin
businesses and lower on average  polypropylene costs,  partially offset by lower
average  selling  prices  due to the  decreases  in the price of  polypropylene.
Polypropylene is the basic raw material used in the manufacture of substantially
all of the  Company's  products  today,  which can  account for up to 50% of the
Company's cost of sales. The Company believes that the selling prices of many of
its products have adjusted over time to reflect changes in polypropylene prices.


     The following table sets forth the Partnership's  percentage  relationships
to net sales of certain statements of operations items:
<TABLE>

                                                                       Year Ended September 30,
                                                                1999              1998              1997

<S>                                                            <C>                <C>               <C>
             Net sales.................................        100.0%             100.0%            100.0%
             Cost of sales.............................         65.4               66.9              67.5
                                                                ----               ----              ----
                Gross profit...........................         34.6               33.1              32.5
             Selling expenses..........................         11.2               10.6               9.2
             General and administrative
                     expenses..........................          9.8                8.5               8.0
             Plant consolidation.......................          0.6                -                 -
             Equipment relocation costs................          0.6                -                 -
             Amortization of intangibles...............          0.8                0.8               0.8
                                                                 ---                ---               ---
               Operating income........................         11.6               13.2              14.5
             Interest expense..........................          5.1                5.0               5.8
             Amortization of deferred
                      financing costs..................          0.2                0.2               0.2
                                                                 ---                ---               ---
               Income before provision for income
                   taxes, minority interest in subsidiary
                       net income and extraordinary item         6.3                8.0               8.5
             Provision for income taxes................          2.5                3.2               3.6
                                                                 ---                ---               ---
               Income before minority interest in
                       subsidiary net income and
                       extraordinary Item....                    3.8%               4.8%              4.9%
                                                                 ====               ====              ====

</TABLE>


Results of Operations

Fiscal 1999 Compared to Fiscal 1998

     Net sales for fiscal 1999 were  $384,822  compared  to $368,996  for fiscal
1998, an increase of $15,826, or 4.3%. Carpet backing sales for fiscal 1999 were
$172,024  compared to $168,998 for fiscal 1998, an increase of $3,026,  or 1.8%,
reflecting  unit volume  increases of 8.4%,  partially  offset by lower  average
selling  prices.  Construction  materials  sales for fiscal  1999 were  $139,835
compared to $128,318 for fiscal 1998,  an increase of $11,517,  or 9.0%.  Within
construction  materials,  geosynthetic  sales increased 1.5%,  reflecting a unit
volume  increase of 18.8% offset by a decrease in average  selling  prices and a
change in mix to lighter weight  materials,  which have lower on average selling
prices.  Fiber  reinforced  concrete sales  increased  14.2%,  reflecting a full
year's   contribution   from  the  March  18,  1998,   acquisition   of  Novocon
International,  Inc. (the  "Novocon  Acquisition")  and  continued  increases in
market  penetration.  Technical  textile  sales for  fiscal  1999  were  $72,963
compared to $71,680 for fiscal  1998,  an  increase of $1,283,  or 1.8%.  Within
technical  textiles,  sales  of  furniture  and  bedding  construction  products
increased  approximately  9.8%,  reflecting  continued  market share  gains.  In
addition,  agricultural  and filtration  product sales  increased  approximately
7.1%.  These  increases  were offset by lower sales of specialty  yarn and fiber
products as the Company de-emphasizes these product lines.

     Gross profit for fiscal 1999 was $133,042,  compared to $122,319 for fiscal
1998, an increase of $10,723,  or 8.8%.  As a percentage of sales,  gross profit
increased to 34.6% in fiscal 1999 from 33.1% in fiscal 1998.  This  increase was
primarily due to lower on average  polypropylene  costs,  efficiencies  realized
through the Company's  streamlined  supply chain,  and a 13.9% increase in sales
volume, partially offset by lower average selling prices.

      The Company  expects that sales of  construction  material  products  will
continue  to be  of  increasing  importance  to  the  Company's  overall  sales.
Reflecting  the  success of this  strategy,  sales of carpet  backing,  although
growing,  continue to decrease as a percentage  of total sales and now represent
44.7% of fiscal  1999 total net sales as  compared to 45.8% of fiscal 1998 total
net sales. In addition, the Company continues to diversify its product offerings
and,  with the  BonTerra  Acquisition,  now  includes  natural  erosion  control
products within its urban storm-water management product line.

     Selling  expenses  for fiscal  1999 were  $42,940  compared  to $39,358 for
fiscal 1998, an increase of $3,582,  or 9.1%. As a percentage of sales,  selling
expenses increased from 10.6% in fiscal 1998 to 11.2% in fiscal 1999.  Excluding
certain charges associated with the sale of the Company (see below), general and
administrative expenses for the Company for fiscal 1999 were $34,393 compared to
$30,857 for fiscal 1998, an increase of $3,536, or 11.5%. As a percent of sales,
general and administrative expenses,  excluding sale process expenses, increased
from 8.3% in fiscal  1998 to 8.9% in  fiscal  1999.  The  increase  in  selling,
general  and  administrative  expenses,  excluding  sale  process  charges,  was
primarily  due to an  increase  in research  and market  development  costs from
approximately  $8,100 in fiscal 1998 to approximately  $9,900 in fiscal 1999, an
approximately  $2,000  increase  in  engineering  support  staff to  continue to
educate  the  marketplace  about the  benefits  of the  Company's  products  and
increased costs  associated  with higher unit volume sales.  Included in general
and  administrative  expenses  for the  Partnership  was $679,  which is due the
Company for expenses incurred on behalf of the Partnership.

     In fiscal  1999,  the  Company  consolidated  its  non-woven  manufacturing
facility  in  Spartanburg,  SC into its modern  facility in  Ringgold,  GA. As a
result,  the  Company  recorded  pretax  charges  of $4,300  for the year  ended
September  30,  1999.   These  charges  reflect  plant   combination   costs  of
approximately  $2,200 (severance  provisions of approximately  $1,100 related to
workforce   reductions   of   approximately   105  employees  and  a  charge  of
approximately  $1,100  for the  write off of  abandoned  assets)  and  equipment
relocation  costs of  approximately  $2,100.  The  costs  related  to the  plant
consolidation  and  equipment  relocation  have been fully  paid or charged  off
during fiscal 1999.

     Included  within  general and  administrative  expenses for fiscal 1999 are
charges  associated  with the sale of the Company,  conducted by an  independent
committee of the Company's Board of Directors.  These charges include investment
banking,  legal and advisory costs of $1,038 and compensation expenses of $1,688
earned during fiscal 1999 in connection with the  implementation  of a retention
bonus plan, designed to preserve and protect the Company's management during the
sale process.

     Operating  income for the Company  for fiscal 1999 was $45,500  compared to
$49,317 for fiscal 1998, a decrease of $3,817,  or 7.7%.  Excluding  the charges
related to the Company's sale process and plant consolidation efforts, operating
income for fiscal 1999 was $52,526 as  compared  to $49,317 for fiscal  1998,  a
increase  of  $3,209,  or 6.5%.  As a  percentage  of  sales,  operating  income
excluding  such  charges  increased to 13.6% in fiscal 1999 from 13.4% in fiscal
1998.

     Interest expense for fiscal 1999 was $19,626 compared to $18,515 for fiscal
1998, an increase of $1,111,  or 6.0%,  primarily due to higher average interest
rates during fiscal 1999 and the lower  capitalization of interest costs related
to machinery and equipment  installation in fiscal 1999 as compared to 1998. The
effective  income tax rate  decreased  to 38.5% in fiscal  year 1999 from 39% in
fiscal 1998,  primarily  due to reduced  state income taxes  resulting  from tax
planning strategies implemented in fiscal 1999.


Fiscal 1998 Compared to Fiscal 1997

     Net sales for fiscal 1998 were  $368,996  compared  to $345,572  for fiscal
1997, an increase of $23,424, or 6.8%. Carpet backing sales for fiscal 1998 were
$168,998  compared to $166,219 for fiscal 1997, an increase of $2,779,  or 1.7%,
reflecting higher unit volume, partially offset by lower average selling prices.
Construction  materials  product sales for fiscal 1998 were $128,318 compared to
$114,611 for fiscal 1997, an increase of $13,707, or 12.0%, reflecting increased
unit volume in fiber  reinforced  concrete and  geosynthetic  product sales. The
Novocon Acquisition contributed approximately $7,000 of this revenue.  Technical
textiles sales for fiscal 1998 were $71,680 compared to $64,742 for fiscal 1997,
an increase of $6,938, or 10.7%.

     Gross profit for fiscal 1998 was $122,319,  compared to $112,385 for fiscal
1997, an increase of $9,934,  or 8.8%.  As a percentage  of sales,  gross profit
increased to 33.1% in fiscal 1998 from 32.5% in fiscal 1997.  This  increase was
primarily due to lower on average  polypropylene  costs and higher sales volume,
partially offset by lower average selling prices.

      The Company's  improvement in gross profit  performance  also reflects its
diversification  strategy for its products as well as its primary raw  material.
The Company expects that sales of construction  materials products will continue
to be of increasing  importance to the Company's  overall sales.  Reflecting the
success of this strategy, sales of carpet backing, although growing, continue to
decrease as a percentage of total sales and now  represent  45.8% of fiscal 1998
total  net  sales.   In   addition,   the  Company   continues   to  expand  its
polyester-based  product  offerings  and,  with  the  Novocon  Acquisition,  now
includes steel fibers in its line of concrete reinforcing fibers.

     Selling  expenses  for fiscal  1998 were  $39,358  compared  to $31,801 for
fiscal 1997, an increase of $7,557, or 23.8%. As a percentage of sales,  selling
expenses increased from 9.2% in fiscal 1997 to 10.6% in fiscal 1998. General and
administrative expenses for the Company for fiscal 1998 were $30,857 compared to
$26,562 for fiscal 1997,  an increase of $4,295,  or 16.2%.  As a percentage  of
sales, general and administrative expenses increased from 7.7% in fiscal 1997 to
8.3% in fiscal  1998.  The  increase  in  selling,  general  and  administrative
expenses was  primarily  due to an increase in research  and market  development
costs from approximately $4,200 in fiscal 1997 to approximately $8,100 in fiscal
1998, a $2,000 increase in engineering  support staff to continue to educate the
marketplace about the benefits of the Company's products,  and a $1,500 increase
in advisory and consulting fees to improve operating  efficiencies.  Included in
general and  administrative  expenses for the Partnership is $622,  which is due
the Company, for expenses incurred on behalf of the Partnership.

     Operating income for the Company for fiscal 1998 was $49,317 as compared to
$51,430 for fiscal  1997,  a decrease of $2,113,  or 4.1%.  As a  percentage  of
sales,  operating  income decreased to 13.4% in fiscal 1998 from 14.9% in fiscal
1997.  This  decrease  was  primarily  due  to  higher   selling,   general  and
administrative costs which offset improved gross margins.

     Interest expense for fiscal 1998 was $18,515 compared to $20,085 for fiscal
1997, a decrease of $1,570,  or 7.8%, due to lower average  interest rates on an
increased level of outstanding debt and the  capitalization  of interest related
to machinery and equipment  installation.  The effective income tax rate was 39%
in  fiscal  year  1998  and  41%  in  fiscal  1997  before  the  effect  of  the
extraordinary  item. The provision for income taxes includes the  recognition of
additional state income tax credits of approximately $600 during fiscal 1998.


Liquidity and Capital Resources

         To finance its capital  expenditures  program and fund its  operational
needs, the Company has relied upon cash provided by operations,  supplemented as
necessary  by bank lines of credit,  long-term  indebtedness  and capital  lease
obligations. Net cash provided by operating activities was $35,470, $42,344, and
$25,129  for  the  fiscal  years  ended  September  30,  1999,  1998  and  1997,
respectively.  The reduction in net cash provided by operating activities during
fiscal 1999 as compared to 1998 was primarily due to the costs  associated  with
the Company's plant  combination  efforts and costs  associated with the sale of
the  Company,  as well as an increase in inventory  to support  increased  sales
volumes.  The increase in net cash  provided by operating  activities  in fiscal
1998 as compared to 1997 was primarily due to reduced  working  capital  charges
over the prior year.

         On November 1, 1996, the Company received net proceeds of approximately
$34,000 (after payment of  underwriting  discounts and commissions and expenses)
from the sale of  2,875,000  shares of Common  Stock in an  underwritten  public
offering.  On February 11, 1997, the Company issued $170,000 aggregate principal
amount of 9 1/4% Senior  Subordinated Notes due February 15, 2007 (the "Notes"),
which represent unsecured  obligations of the Company.  The Notes are redeemable
at the option of the Company at any time on or after  February 15,  2002,  at an
initial  redemption  price of 104.625% of their  principal  amount together with
accrued interest,  with declining redemption prices thereafter.  Interest on the
Notes is payable  semi-annually  on  February  15 and August 15 in the amount of
$7,863. The net proceeds from the public offering and the sale of the Notes were
utilized  primarily to retire  approximately  $133,000 of the  Company's 12 3/4%
Senior Subordinated Debentures due 2002 (the "Debentures"), pay the related call
premium  and  prepayment  costs  and fees  associated  with the  refinancing  of
$15,920, pay debt issuance costs of $5,525 and to repay approximately $21,900 of
certain outstanding indebtedness under the Company's Fourth Amended and Restated
Revolving  Credit and  Security  Agreement,  dated as of October  20,  1995,  as
subsequently  amended,   among  the  Company,  the  lenders  party  thereto  and
BankBoston,   as  agent.  In  connection  therewith,  the  Company  recorded  an
extraordinary  loss of $11,950  during  fiscal  1997.  On December 1, 1997,  the
Company  redeemed  the  remaining  $7,403  aggregate  principal  amount  of  the
Debentures at a redemption  price of 106.375% of the principal  amount  thereof,
together with accrued interest as of the redemption date.

         On December 18, 1997, the Company and its lenders,  with  BankBoston as
agent, entered into a new five year credit facility (the "Credit Facility"). The
Credit  Facility  consists  of up to a $40 million  asset  based  securitization
program,  with amounts  borrowed  through a wholly owned  subsidiary,  Synthetic
Funding  Corporation  (the  "Securitization"),  and a $60 million senior secured
revolver facility (the "Revolver").  Securitization and Revolver  borrowings are
collateralized  by the Company's  accounts  receivables and substantially all of
the assets of the Company,  excluding real property,  respectively.  Interest on
the  Securitization  is based on the applicable  commercial paper rate in effect
plus a spread.  The Revolver  permits  borrowings  which bear  interest,  at the
Company's option, (i) for domestic borrowings based on the lender's base rate or
(ii) for Eurodollar  borrowings based on a spread over the Interbank  Eurodollar
rate at the time of conversion.  Spreads for the Securitization and the Revolver
borrowings are  determined by the  operational  performance  of the Company.  At
September 30, 1999, the balances under the  Securitization and the Revolver were
$33,601 and  $17,640,  respectively,  at interest  rates  ranging  from 5.63% to
8.25%.

         The Revolver  provides for borrowings  under letters of credit of up to
$10,000,  which  borrowings  reduce  amounts  available  under the Revolver.  At
September 30, 1999, letters of credit of $304 were outstanding.

         The Credit Facility  contains  covenants  related to the maintenance of
certain   operating   ratios  and  limitations  as  to  the  amount  of  capital
expenditures.  The  Company's  ability to pay  dividends  on its Common Stock is
restricted by both the New Credit Facility and the Notes. At September 30, 1999,
the availability under the Credit Facility was approximately $26,400.

         On October 4, 1998,  the Company  entered  into an  eight-year  capital
lease for $5,300,  at an interest rate of 7.03%.  On August 17, 1999 the Company
sold certain  assets for $12,608 and entered into a leaseback from the purchaser
over a period of 8 years at an interest rate of 6.4%.

         At September 30, 1999,  the Company's  total  outstanding  indebtedness
amounted to $233,610.  Such indebtedness consists of borrowings under the Credit
Facility  of  $51,241,   $170,000  aggregate  principal  amount  of  the  Notes,
outstanding capital lease obligations and a mortgage.  Cash interest paid during
fiscal 1999, 1998 and 1997 was $21,195, $21,232, and $23,642, respectively.

         The proceeds from  financing  and  operating  activities in fiscal 1999
were  utilized  to  fund  capital  expenditures  of  approximately  $32,166  and
acquisitions of approximately $3,327, respectively. On July 7, 1999, the Company
acquired all of the outstanding shares of BonTerra America, Inc., certain assets
of an affiliated  company and rights to the  international  name of BonTerra for
$2,727 net of cash received and a note payable of $317.  On August 1, 1999,  the
Company acquired all the outstanding shares of High Point Fabrics, Inc. for $600
net of cash received.

         Capital expenditures planned for fiscal 2000 are approximately $36,000,
primarily  to expand the  capacity of the  Company's  manufacturing  facilities,
subject to prevailing market  conditions.  Capital  expenditures,  including the
Novocon  Acquisition,  were approximately  $52,000 in fiscal 1998 and $63,000 in
fiscal 1997.


Sale of Company Shares and Liquidation Expenses

     On November 5, 1999 the  Partnership  entered into a Stockholder  Agreement
with SIND Holdings, Inc., a company organized by Investcorp, a global investment
group, and SIND Acquisition,  Inc., a wholly-owned  subsidiary of SIND Holdings,
Inc.  (SIND Holdings and SIND  Acquisition  being  hereafter  referred to as the
"Purchasers").  Pursuant to the Stockholder  Agreement the Partnership agreed to
tender all of the shares of common  stock (the  "Shares")  it owned in Synthetic
Industries,  Inc. (the  "Company") to the  Purchasers  pursuant to a cash tender
offer that would be made to  stockholders  of the Company in  accordance  with a
Merger  Agreement,  dated  November  5, 1999,  between  the  Purchasers  and the
Company.  The cash  tender  offer  was  commenced  on  November  12,  1999,  the
Partnership  tendered  the  Shares  and on  December  15,  1999 the  Partnership
received  approximately  $188,000  in  cash  in  payment  for  the  Shares.  The
Liquidating  Trustee  promptly  invested these proceeds in U.S.  Treasury Bills,
which now comprise all of the assets of the Partnership.

     Pursuant to the  Stipulation  and Agreement of  Settlement  approved by the
United States  District  Court for the Northern  District of California to which
the Partnership is subject,  the Liquidating Trustee has made application to the
Court to make a cash  distribution  to the partners of the  Partnership  and has
sent Payment Direction Letters to all limited partners of the Partnership.  Upon
approval  by  the  Court  and  return  of the  Payment  Direction  Letters,  the
Liquidating  Trustee  intends to distribute  $160,000 in cash in accordance with
the terms  governing  liquidating  distributions  set  forth in the  Partnership
Agreement.  The  remainder  of the  cash  now  held by the  Partnership  in U.S.
Treasury Bills will be retained in that form by the Liquidation  Trustee pending
satisfaction  of  all  of  the  Partnership's  liabilities,  including,  without
limitation, the attorneys' fees payable to plaintiff's counsel in the litigation
that was the subject of the  Stipulation  and Agreement of  Settlement,  amounts
owed to the Company and the  incidental  expenses  and  liabilities  incurred in
connection  with the  liquidation.  On  December  30,  1999,  the United  States
District  Court for the Northern  District of California  awarded $6,839 in fees
and $237 in expenses to plaintiff's counsel, and directed an additional $13, 678
to be held in reserve by the Liquidating  Trustee,  subject to the exhaustion of
any appeals or further  court  order.  In addition,  at December  30, 1999,  the
Partnership  owed the  Company  $1,396  incurred  in  connection  with  plans of
dissolution that were not consummated.  The Liquidating Trustee expects that all
liabilities of the Partnership  will not exceed the amount of assets retained by
the Partnership. The Liquidating Trustee can give no assurances,  however, as to
when  and what  amount  of the  reserve  will be  released  by the  Court,  and,
therefore,  no  prediction  can be made as to when  and in what  amount  a final
liquidating distribution of the Partnership will be made.


Inflation and Seasonality

     The  Company  does not believe  that its  operations  have been  materially
affected by  inflation  during the three most  recent  fiscal  years.  While the
Company  does not  expect  that  inflation  will  have a  material  impact  upon
operating results,  there is no assurance that its business will not be affected
by inflation in the future.

     The Company's sales and income have  historically  been higher in the third
and fourth  quarters  of its fiscal  year.  While sales and income in the carpet
backing and technical textile product lines are not greatly affected by seasonal
trends,  sales of  construction  materials  products  are lower in the first and
second  quarters of any given  fiscal year due to the impact of adverse  weather
conditions on the construction  materials markets.  Consequently,  as sales from
construction  materials  products  continue to increase as a  percentage  of the
Company's  total sales,  the  seasonality of these  products'  sales will affect
total sales and income of the Company to a greater degree.


Year 2000 Readiness Disclosures

     The  Company's  expenditures  for  addressing  year  2000  issues  were not
material  nor  does  the  Company  expect  to  incur  any  significant  costs in
addressing year 2000 issues in the future.


Recent Accounting Pronouncement

     In June 1998, the FASB issued Statement of Financial  Accounting  Standards
No. 133,  "Accounting for Derivative  Instruments and Hedging Activities" ("SFAS
133"), which must be adopted for fiscal quarters of fiscal years beginning after
June 15,1999.  SFAS 133 requires the  recognition  of all  derivatives as either
assets or liabilities in the statement of financial  position and measurement of
those instruments at fair value. SFAS 133 will not have a material effect on the
Company's results of operations or financial condition


Forward Looking Statements

     The  discussion  of the  Company's  business and  operations in this report
includes in several instances  forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934, as amended,  which are based upon management's
good faith assumptions relating to the financial,  market,  operating, and other
relevant  environments  that will exist and affect the  Company's  business  and
operations  in the future.  No assurance can be made that the  assumptions  upon
which management based its forward-looking  statements will prove to be correct,
or that the  Company's  business  and  operations  will not be  affected  in any
substantial  manner by other factors not currently  foreseeable by management or
beyond the Company's control.  All forward-looking  statements involve risks and
uncertainties,  including  those  described in this report,  and such statements
shall be deemed in the future to be modified in their  entirety by the Company's
public pronouncements, including those contained in all future reports and other
documents filed by the Company with the Securities and Exchange Commission.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risks  relating to the Company's  operations  result  primarily from
changes in interest rates and commodity prices.

Interest Rate Risk
     The Company  faces  minimal  interest rate risk exposure in relation to its
outstanding  debt of $233,610 at  September  30, 1999.  Of this amount  $51,241,
under  the  Credit  Facility,  is  subject  to  interest  rate  fluctuations.  A
hypothetical  10%  change in  interest  rates  applied to the fair value of debt
would not have a material impact on earnings or cash flows of the Company.

Commodity Price Risk
     The Company is a purchaser of certain commodities, primarily polypropylene.
The Company does not use commodity futures for hedging  purposes.  Polypropylene
is the basic raw material used in the  manufacture of  substantially  all of the
Company's  products,  historically  accounting  for  approximately  50%  of  the
Company's cost of goods sold.

     The price of  polypropylene  is determined by the supply and demand for the
product. Historically, the creation of additional capacity has helped to relieve
supply and pricing  pressures  although there can be no assurance that this will
continue to be the case.  According to a September  1999 report by Chemical Data
Inc.,  a  monthly  petrochemical  and  plastics  analysis  publication,   annual
polypropylene  capacity in North  America is expected to rise from 15.0  billion
pounds per year for 1998 to 16.4 billion  pounds per year for 1999,  and to 20.2
billion pounds per year by the year 2001.

     An increase in the price of polypropylene for a prolonged period without an
increase in the selling  prices of the Company's  products could have a material
effect on the Company's  earnings and cash flows.  The Company believes that the
selling  prices of many of its  products  have  adjusted  over  time to  reflect
changes in polypropylene prices.

Currency Risk
     The Company faces currency risk exposure that arises from  translating  the
results of its United Kingdom  operations to the U.S. dollar.  The currency risk
exposure is not material as the United Kingdom division's operations do not have
a material impact on the Company's earnings.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Information  with respect to this Item is  contained  in the  Partnership's
consolidated  financial statements indicated in the Index in Part IV, Item 14 of
this Annual Report on Form 10-K and is incorporated herein by reference.


ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 10. Executive Officers and Directors of the Company


     Synthetic G.P. is the sole general partner of Management L.P., which is the
sole  general  partner  of the  Partnership.  By virtue of these  relationships,
Synthetic G.P. controls the management and affairs of the Partnership.

     The  general  partners  of  Synthetic  G.P.  are  the  following   Delaware
corporations:   Chill  Investments,   Inc.,  Beckman  Investments,  Inc.,  Freed
Investments Inc., Kenner Investments, Inc., and Wright Investments, Inc. Each of
Leonard Chill,  Jon P. Beckman,  W. Wayne Freed,  Ralph A. Kenner and W. Gardner
Wright,  Jr. is the sole  director  and the  controlling  stockholder  of one of
Synthetic  G.P.'s  general  partners.  Messrs.  Chill and Kenner  are  executive
officers of the Company. Mr. Chill also served as director of the Company.
The  following  table  sets forth  certain  information  concerning  each of the
executive officers and directors of the Company as at September 30, 1999:
<TABLE>

                 Name                         Age                         Position and Offices Held

<S>                                           <C>
Leonard Chill                                 67        Chairman of the Board, Chief Executive Officer and Director

Joseph F. Dana                                52        President,   General  Counsel  and Director

Joseph Sinicropi                              45        Chief Financial Officer and Secretary

Ralph Kenner                                  55        Vice President - Manufacturing

C. Ted Koerner                                50        Vice President - General Manager Construction/Civil
                                                        Engineering Products Group

John Michael Long                             56        Vice President - General Manager Technical Textiles
                                                        Group

Bobby Callahan                                56        Controller

Lee J. Seidler                                64        Director

William J. Shortt                             74        Director

Robert L. Voigt                               81        Director

</TABLE>


         Directors of the Company are elected each year at the annual meeting of
stockholders. The Company's officers serve at the discretion of the Board.

         Leonard Chill, Chairman and Chief Executive Officer, joined the Company
in December  1973 as  President.  He has been a director  since 1986.  From 1967
until  joining  the  Company,  he  held  a  number  of  positions  with  Thiokol
Corporation  in its  Fibers  Division,  including  that of General  Manager.  In
addition, Mr. Chill is a director of Synthetic Textiles Ltd.

         Joseph F. Dana, President and General Counsel, joined  the  Company  in
May 1997. Prior to joining the Company, Mr. Dana had been engaged in the private
practice  of law for over  twenty  years  and had been a member  of the law firm
Watson, Dana & Gottlieb L.P., LaFayette,  Georgia,  since its formation in 1978,
serving as general  counsel to the Company  since  1987.  He has been a Director
since 1993.

         Joseph  Sinicropi  joined  the  Company  in  1995 as  Chief  Accounting
Officer.  He was named Chief  Financial  Officer and Secretary in February 1996.
Prior  to  joining  the  Company,   he  was  an  audit  senior  manager  in  the
international accounting firm of Deloitte & Touche LLP from 1985 to 1995.

         Ralph Kenner has been Vice  President --  Manufacturing  since 1984. He
joined the Company in 1974 as Director,  Industrial Relations and served in that
capacity until 1976. In 1976, he was appointed  Plant Manager and served in that
capacity until 1984.

         Charles T. Koerner joined the Company in 1990 and became Vice President
--  Construction  Materials  Division in 1993.  He was named Vice  President  --
General Manager of the Construction  Materials  Division in 1995. Prior thereto,
Mr. Koerner was an engineer with the Ohio Department of Transportation;  a sales
engineer, product supervisor and regional engineer with Armco Steel Corporation;
and a sales manager with National Seal Corporation.

         John Michael Long was Vice  President -- Nonwoven  Fabrics from 1991 to
1996 at which  time he was  named  Vice  President  --  General  Manager  of the
Technical  Textiles  Group.  Prior  thereto,  he held a  variety  of  managerial
positions with Spartan Mills, a  manufacturer  of nonwoven  geotextile  fabrics.
During  his last  five  years at  Spartan,  he was Vice  President  and  General
Manager.

         Bobby Callahan joined the Company in 1977 and has been Controller since
1980. Prior thereto, he held a variety of financial  management positions in the
carpet industry.

     Lee J. Seidler was professor of accounting and Price  Waterhouse  professor
of auditing at New York University.  Dr. Seidler was Senior Managing Director at
Bear,  Stearns & Co. Inc.  from 1981 to 1989.  He is presently  associated  with
Bear,  Stearns & Co.  Inc.  as  Managing  Director  Emeritus.  Dr.  Seidler is a
director  of the  Shubert  Foundation,  The  Shubert  Organization,  and Players
International,  Inc.  and has been a director of  SafeCard  Services,  Inc.  and
Eastbank, N.A. He has been a Director since 1993.

     William J. Shortt retired from Johnson & Johnson in 1989.  From 1977 to
1989, he was Director of Government and Trade Relations,  Southeast at Johnson &
Johnson. Mr. Shortt is also been a director of First National Bank of Habersham.
He has been a Director since 1993.

     Robert L. Voigt served as a consultant  to Dixie Yarns Inc. from 1985 until
his  retirement at the end of 1991. Mr. Voigt also served as a director of Dixie
Yarns, Inc. from 1981 to 1987. He has been a Director since 1993.

ITEM 11.  Remuneration of Directors and Officers

Compensation Committee Interlocks and Insider Participation

         The Compensation Committee of the Board establishes salary,  incentives
and other forms of compensation  and administers the Company's 1994 Stock Option
Plan,  1996 Stock Option Plan and Employee Stock Option Plan and other incentive
compensation and benefit plans applicable to the officers. During the year ended
September 30, 1999, the Compensation Committee was composed of Messrs.
Seidler, Shortt and Voigt.

         During  the  year  ended  September  30,  1999,  none of our  executive
officers  served on the board of directors or on the  compensation  committee of
any other entity which has one or more executive officers serving as a member of
the Company's Board of Directors or the Compensation Committee.

Director Compensation

         Prior  to the  consummation  of  the  Transactions,  outside  directors
received  $15,000  per annum for  services  as a director  and $800 per  meeting
attended.  Directors who are members of  management  did not receive any meeting
attendance fees or additional  compensation for service as a director or service
on  committees  of the Board.  All  directors  were  reimbursed  for  reasonable
out-of-pocket  expenses incurred in connection with their attendance at meetings
of the Board and its committees on which they served.

         Under the Company's 1994 Stock Option Plan for  Non-Employee  Directors
(the "Directors' Plan"),  Messrs.  Dana, Seidler,  Shortt and Voigt were granted
non-qualified  stock  options (the  "Directors'  Options")  to purchase  28,906,
57,813, 19,271 and 19,271 shares of Common Stock,  respectively.  The Directors'
Plan does not provide for any further grants of options thereunder.

         The  purchase  price of the  shares  of  Common  Stock  subject  to the
Directors'  Options was  determined by reference to the fair market value of the
Common Stock, as determined by the Compensation  Committee,  at the time Messrs.
Dana,  Seidler,  Shortt and Voigt became members of the Board.  As of October 1,
1996,  100% of the number of shares of Common  Stock  subject  to each  Director
Option were vested and were exercisable.  As a Company  employee,  Mr. Chill was
not eligible to participate in the Directors' Plan.


Executive Compensation

         The following  table sets forth  information  regarding  aggregate cash
compensation, stock option awards and other compensation earned by the Company's
Chief  Executive  Officer and the four other most highly  compensated  executive
officers  for  services  rendered  in all  capacities  to the  Company  and  its
subsidiaries in the fiscal years 1997 to 1999.
<TABLE>

                                                          Annual Compensation
                                                                                             Long-Term
                                                                                         CompensationAwards
                                      Fiscal                                 Other          Securities
                                       Year                                   Annual        Underlying        All Other
            Name and                  Ended                                  Compen-        Options (#)        Compen-
Principal Position                 Sept. 30       Salary($)    Bonus($)     sation($)                        sation($)
                                                  ---------    --------     ---------                        ---------
<S>                                    <C>           <C>          <C>            <C>                           <C>
Leonard Chill                          1999          325,738      338,100        14,674         --              9,424(1)
Chairman and Chief Executive           1998          280,000      137,058         7,360         --             10,424(1)
Officer                                1997          270,163      144,720         2,168         --             10,174(1)

Joseph F. Dana--                       1999          269,380      246,300        21,669         --              4,000(2)
President                              1998          225,000       77,580        12,932         --              5,000(2)
and General Counsel                    1997(3)       118,100       75,000         6,586                            -0-

Joseph Sinicropi--                     1999          205,433      193,200        17,417         --
Chief Financial Officer and            1998          170,000       72,408        12,932         --               4,000(2)
Secretary                              1997          132,500       51,840         5,312         --               5,000(2)
                                                                                                                 4,750(2)

Ralph Kenner                           1999          171,000       80,180         6,320         --               4,000(2)
Vice President-- Manufacturing         1998          171,000   71,546             5,577         --               4,800(2)
                                       1997          154,731       69,768         5,771         --               4,750(2)

Charles T. Koerner                     1999          150,750       62,830        14,398         --               4,000(2)
Vice President-- General Manager       1998          140,603       58,240         8,241         --               4,218(2)
--Construction Materials Division      1997          135,839       52,577         8,177         --               4,075(2)



---------------------
</TABLE>

(1)  These amounts  consist of $5,424 of insurance  premiums paid by the Company
     under a term  life  insurance  policy in each of 1999,  1998 and 1997,  and
     $4,000,  $5,000 and $4,750 contributed by the Company under its 401(k) plan
     in 1999, 1998 and 1997, respectively.

(2) These amounts  represent the annual  contribution  made by the Company under
    its 401(k) Plan in the respective year.

(3) Mr. Dana assumed his duties as Chief  Operating  Officer and General Counsel
    on June 1, 1997. He was named President and General Counsel in August 1999.


Option Grants

         There were no grants of options to the executive  officers named in the
Summary  Compensation  Table made under the Company's 1994 and 1996 Stock Option
Plans during fiscal 1999.


Option Exercises and Holdings

         The  following  table  sets  forth  information  with  respect  to  the
executive  officers  named in the  Summary  Compensation  Table  concerning  the
exercise of options  during fiscal 1998 and  unexercised  options held as of the
end of fiscal 1998,  which include grants made under the Company's 1994 and 1996
Stock Option Plans.
<TABLE>

                                            Aggregated Option Exercises in Last Fiscal Year
                                                   and Fiscal Year-End Option Values
                           Shares
                          Acquired                            Number of Securities                Value of Unexercised
                             on             Value            Underlying Unexercised          In-the-Money Options at FY-End
Name                    Exercise (#)     Realized ($)        Options at FY-End (1)
                        ------------     ------------        ---------------------

                                                        Exercisable       Unexercisable   Exercisable       Unexercisable

<S>                                                      <C>               <C>             <C>               <C>
Leonard Chill                       --              --   136,563           8,719           $ 2,274,457(1)    $145,215(1)
Joseph F. Dana                      --              --   169,506              --             1,958,611(2)         --
Joseph Sinicropi                    --              --    45,440           7,247               543,805(3)     120,699(1)
Ralph Kenner                        --              --    48,757           5,115               812,048(1)      85,190(1)
Charles T. Koerner                  --              --    30,037          12,451               443,246(4)     142,875(5)
</TABLE>

(1) Based on the September 30, 1999 price  ($27.375 per share) less the exercise
price of $10.72 per share payable for such shares.

(2) Based on the September 30, 1999 price  ($27.375 per share) less the exercise
prices of $6.83 for 28,906  shares,  $17.875 for  130,500  shares and $15.00 for
10,100 shares.

(3) Based on the September 30, 1999 price  ($27.375 per share) less the exercise
prices of $10.72 for 21,740  shares,  $21.375  for 17,500  shares and $15.00 for
6,200 shares.

(4) Based on the September 30, 1999 price  ($27.375 per share) less the exercise
prices of $10.72 for 24,162 shares,  $21.375 for 5,000 shares and $15.00 for 875
shares.

(5) Based on the September 30, 1999 price  ($27.375 per share) less the exercise
prices of $10.72 for 4,862 shares, $21.375 for 5,000 shares and $15.00 for 2,625
shares.


Description of Certain Employment Agreements

         Each of  Messrs.  Chill,  Dana and  Sinicropi  (the  "Executives")  are
employed by the Company  pursuant to individual  employment  agreements  entered
into as of September  24, 1998, as amended.  The term of employment  under these
agreements is twenty-five  months from January 1, 1999 (the "Effective Date") in
the case of Mr.  Chill,  four years from the  Effective  Date in the case of Mr.
Dana and  three  years  from the  Effective  Date in the case of Mr.  Sinicropi;
provided that on the first day of the second month  following the Effective Date
in the case of Mr. Chill, on each  anniversary of the month following the second
Effective  Date in the case of Mr.  Dana and on each  anniversary  of the  month
following the first  Effective  Date in the case of Mr.  Sinicropi,  and in each
case  each  successive  month,  the  term  is  automatically  extended  for  one
successive month, providing a minimum remaining term of two years, unless either
party terminates the agreement by written notice. The maximum term of employment
under these  agreements  is 25 years.  The current  annual  salaries for Messrs.
Chill,  Dana and Sinicropi  pursuant to these agreements are $325,000,  $275,000
and $210,000,respectively, and are subject to annual review by the Board.

         The Company has the right to terminate the  Executive's  employment for
"cause" or "without cause," in each case as defined in the applicable employment
agreement.  In the event that an Executive is terminated by the Company "without
cause,"  other than  following a "Change in Control"  (as  defined  below),  the
Executive is entitled to receive (a) his base salary accrued through the date of
termination, (b) any unpaid, accrued amounts under the annual incentive plan and
(c) certain other supplemental  insurance  coverages in the case of Mr. Dana, or
lump sum  payments in lieu thereof in the case of Messrs.  Chill and  Sinicropi.
Under these  employment  agreements,  a "Change in Control"  occurs when (i) any
person or group  becomes the  beneficial  owner of capital  stock of the Company
representing  35% or more of all the voting  stock,(ii) the members of the Board
on the  Effective  Date cease to  constitute a majority of the Board,  (iii) the
Company  combines  with  another  entity  and a person  holds 35% or more of the
voting stock of the surviving entity or the Company's directors,  as of the date
immediately  before  such  combination,  constitute  less than a majority of the
board of directors  of the  combined  entity,  (iv) the  Company's  stockholders
approve  a merger,  consolidation  or share  exchange  that  results  in (A) the
conversion  or  exchange  of the  Company's  voting  stock or (B) the  Company's
stockholders holding less than 50% of the combined voting power of the surviving
entity,  or (v) upon the  occurrence  of any event that would be  required to be
reported in response to Item 6(e) of  Regulation  14A of the  Securities  Act of
1933, as amended.

         If an Executive is terminated by the Company  "without  cause" prior to
the  occurrence  of a Change in  Control  and it can be shown  such  termination
occurred  in  connection  with,  prior to or in  anticipation  of the  Change in
Control or, if following a Change in Control,  an Executive is terminated by the
Company other than for "cause," or he terminates his employment  within 120 days
following  the Change in Control or thereafter  terminates  his  employment  for
"good  reason"  (as  defined  in the  applicable  employment  agreement),  he is
entitled to (i) all accrued and unpaid  compensation and benefits,  (ii) unpaid,
accrued  amounts under the annual  incentive plan and a payment under the annual
incentive  plan  equal to the pro rata  amount  that  would have been due in the
termination  year,(iii)  certain other supplemental  insurance  coverages in the
case of Mr.  Dana,  or lump sum  payments in lieu thereof in the case of Messrs.
Chill and Sinicropi and (iv)  reimbursement  of excise taxes, if any, payable in
the  event  that any  compensation  be  deemed  "parachute  payments"  under the
Internal  Revenue Code.  In the event of a Change in Control,  whether or not an
Executive's  employment  continues with the Company,  all options granted to him
under any of the Company's stock option plans shall vest immediately on the date
of the Change in Control.

         In  the  event  that  an  Executive's   employment  is  terminated  for
disability  or  death,  he (or his  estate)  is to be paid (a) his  base  salary
accrued  through the date of  termination  and (b) any unpaid,  accrued  amounts
under the annual  incentive plan. In the case of termination by reason of death,
the  Executive is also  entitled to a payment  under the annual  incentive  plan
equal to the prorata amount that would have been due in the termination year.

         Each of these employment agreements also provides that the Executive is
restricted  from  soliciting  customers  or  employees  or  engaging  in certain
restricted  activities  on behalf of any  entity  which  engages  in  businesses
similar to that of the  Company  until two years  after the date his  employment
ends for any reason, for which he will be paid an amount equal to twice his base
salary as in effect on the date of  termination  of  employment  plus  twice the
payment made under the annual  incentive plan in either the termination  year or
the immediately preceding year, whichever is greater.

         Mr.  Kenner  is  employed  by the  Company  pursuant  to an  employment
agreement  effective as of September 24, 1998 (the "Kenner Effective Date"). The
term of employment  under this agreement is  twenty-five  months from the Kenner
Effective Date; provided that on the first day of the second month following the
Kenner  Effective Date, and in each successive  month, the term is automatically
extended for one  successive  month,  providing a minimum  remaining term of two
years, unless Mr. Kenner terminates the agreement by written notice. The current
annual  salary for Mr.  Kenner  pursuant to this  agreement is $171,000,  and is
subject to annual review by the Board.

         The Company has the right to  terminate  Mr.  Kenner's  employment  for
"cause" or "without cause," as defined in the employment agreement. In the event
that Mr.  Kenner is  terminated  by the  Company  "without  cause,"  other  than
following a "Change in Control"  (as defined  below),  he is entitled to receive
(a) his  base  salary  at the  rate in  effect  on the  date of  termination  of
employment for a period of one and one-half years from the date of  termination,
(b) any unpaid,  accrued amounts under the annual incentive plan, (c) a pro rata
payment under the annual incentive plan for the termination  year, (d) a payment
equal to the  three  year  average  of  incentive  payments  received  under the
Company's  annual  incentive plan and (e) certain other  supplemental  insurance
coverages. Under Mr. Kenner's employment agreement, a "Change in Control" occurs
when (i) any person or group  becomes the  beneficial  owner of capital stock of
the Company  representing  35% of all the voting stock,  (ii) the members of the
Board on the Kenner  Effective Date cease to constitute a majority of the Board,
(iii) the Company  combines with another entity and a person holds more than 35%
of the voting stock of the Company or the  Company's  directors,  as of the date
immediately  before  such  combination,  constitute  less than a majority of the
board of directors  of the  combined  entity,  (iv) the  Company's  stockholders
approve a merger, consolidation or share exchange that results in the conversion
or exchange of the Company's voting stock or the Company's  stockholders holding
less than 50% of the combined  voting  power of the  surviving  entity,  (v) any
event that would constitute a change of control (as defined under Regulation 14A
of the Securities Act of 1933, as amended) of the Partnership,  (vi) the removal
of the general  partner of the  Partnership or the  appointment of a liquidating
trustee not approved by the general partner or the Board or (vii) any event that
would be required to be reported in response to Item 6(e) of  Regulation  14A of
the Securities Act of 1933, as amended.

         If Mr. Kenner is terminated by the Company "without cause" prior to the
occurrence of a Change in Control and it can be shown such termination  occurred
in connection  with, prior to or in anticipation of the Change in Control or, if
following a Change in Control,  Mr.  Kenner is  terminated  by the Company other
than for "cause," he is entitled to (i) all accrued and unpaid  compensation and
benefits,  (ii) a lump sum payment  equal to one and  one-half  times his annual
base salary,  plus two times the incentive  payments under the annual  incentive
plan for the year in which the  Change  in  Control  occurs  or the prior  year,
whichever is greater,  (iii) unpaid,  accrued amounts under the annual incentive
plan and a payment that equals the average of the incentive  payment received by
him under the annual  incentive plan for the  immediately  preceding three years
and (iv)  certain  other  supplemental  insurance  coverages.  In the event of a
Change in Control,  whether or not Mr.  Kenner's  employment  continues with the
Company,  all options  granted to him under any of the  Company's  stock  option
plans shall vest immediately on the date of the Change in Control.

         In the event that Mr. Kenner's  employment is terminated for disability
or death,  he (or his estate) is to be paid (a) his base salary accrued  through
the date of  termination  and (b) any unpaid,  accrued  amounts under the annual
incentive plan. In the case of termination by reason of death,  the Executive is
also entitled to a payment under the annual  incentive plan equal to the prorata
amount due for the termination  year.  This  employment  agreement also provides
that Mr. Kenner is restricted from soliciting customers or employees or engaging
in  certain  restricted  activities  on behalf of any  entity  which  engages in
businesses  similar to that of the  Company  until two years  after the date his
employment  ends for any  reason,  for which he will be paid an amount  equal to
one-half his base salary as in effect on the date of termination of employment.

         Mr.  Koerner is  employed  by the  Company  pursuant  to an  employment
agreement effective as of September 24, 1998 (the "Koerner Effective Date"). The
term of  employment  under  this  agreement  is three  years  from  the  Koerner
Effective  Date;  provided  that on the  first day of the  month  following  the
Koerner  Effective Date, and in each successive month, the term is automatically
extended for one  successive  month,  providing a minimum  remaining term of two
years,  unless Mr.  Koerner  terminates  the  agreement by written  notice.  The
maximum term of employment  under this agreement is 25 years. The current annual
salary for Mr. Koerner pursuant to this agreement is $151,000, and is subject to
annual review by the Board.

         The Company has the right to terminate  Mr.  Koerner's  employment  for
"cause" or "without cause," as defined in the employment agreement. In the event
that Mr.  Koerner is  terminated  by the  Company  "without  cause,"  other than
following a "Change in Control"  (as defined  below),  he is entitled to receive
(a) his  base  salary  at the  rate in  effect  on the  date of  termination  of
employment for a period of one and one-half years from the date of  termination,
(b) any unpaid,  accrued amounts under the annual incentive plan, (c) a pro rata
payment  under the  annual  incentive  plan for the  termination  year and (d) a
lump-sum payment equal to certain  supplemental  insurance  premiums.  Under Mr.
Koerner's employment agreement, a "Change in Control" occurs when (i) any person
or  group  becomes  the  beneficial  owner  of  capital  stock  of  the  Company
representing  35%of all the voting  stock,  (ii) the members of the Board on the
Effective  Date cease to  constitute a majority of the Board,  (iii) the Company
combines  with  another  entity  and a person  holds more than 35% of the voting
stock of the  Company or the  Company's  directors,  as of the date  immediately
before  such  combination,  constitute  less  than a  majority  of the  board of
directors of the combined  entity,  (iv) the  Company's  stockholders  approve a
merger,  consolidation  or share  exchange  that  results in the  conversion  or
exchange of the  Company's  voting stock or the Company's  stockholders  holding
less than 50%of the combined voting power of the surviving entity, (v) any event
that would  constitute a change of control (as defined under  Regulation  14A of
the Securities Act of 1933, as amended) of the Partnership,  (vi) the removal of
the general  partner of the  Partnership  or the  appointment  of a  liquidating
trustee not approved by the general partner or the Board or (vii) any event that
would be required to be reported in response to Item 6(e) of  Regulation  14A of
the Securities Act of 1933, as amended.

         If Mr.  Koerner is terminated by the Company  "without  cause" prior to
the  occurrence  of a Change in  Control  and it can be shown  such  termination
occurred  in  connection  with,  prior to or in  anticipation  of the  Change in
Control or, if following a Change in Control,  Mr.  Koerner is terminated by the
Company  other than for "cause," he is entitled to (i) all accrued  compensation
and  benefits,(ii) a lump sum payment equal to one and one-half times his annual
base salary,  plus two times the incentive  payments under the annual  incentive
plan for  either  the year in which the  Change in  Control  occurs or the prior
year,  whichever is greater,  (iii)  unpaid,  accrued  amounts  under the annual
incentive plan, (iv) a payment that equals the average of the incentive payments
received by him under the annual  incentive plan for the  immediately  preceding
three  years,   (v)  certain   other   supplemental   insurance   coverages  and
(vi)reimbursement  of  excise  taxes,  if any,  payable  in the  event  that any
compensation be deemed "parachute  payments" under the Internal Revenue Code. In
the  event of a Change  in  Control,  whether  or not Mr.  Koerner's  employment
continues  with  the  Company,  all  options  granted  to him  under  any of the
Company's stock option plans shall vest immediately on the date of the Change in
Control.

         In the event that Mr. Koerner's employment is terminated for disability
or death,  he (or his estate) is to be paid (a) his base salary accrued  through
the date of  termination  and (b) any unpaid,  accrued  amounts under the annual
incentive plan. In the case of termination by reason of death,  the Executive is
also entitled to a payment under the annual  incentive plan equal to the prorata
amount due for the termination  year.  This  employment  agreement also provides
that Mr.  Koerner is  restricted  from  soliciting  customers  or  employees  or
engaging in certain restricted  activities on behalf of any entity which engages
in businesses  similar to that of the Company until two years after the date his
employment  ends for any  reason,  for which he will be paid an amount  equal to
one-half his base salary as in effect on the date of termination of employment.


Additional Compensation

         The Board adopted a retention bonus plan on October 15, 1999,  pursuant
to  which  30  of  the  Company's  employees,  including  Messrs.  Chill,  Dana,
Sinicropi,  Kenner  and  Koerner,  became  eligible  to  receive  bonuses in the
aggregate  amount of $1,688,000 as of November 5, 1999 (the  "Retention  Payment
Date"),  provided that such employees did not previously  leave their employment
with the Company  voluntarily or that such executives were not terminated by the
Board for "cause" prior to the Retention Payment Date.

         The Board  also  adopted as success  bonus  plan on October  15,  1999,
pursuant to which certain executive  officers,  including Messrs.  Chill,  Dana,
Sinicropi,  Kenner and Koener,  became  eligible to receive base payments in the
aggregate  amount of  $2,500,000  on the date of  consummation  of a sale of the
Company (the  "Success  Payment  Date") as long as prior to the Success  Payment
Date each executive officer has not left his respective  employment  voluntarily
or has not been  terminated by the Company Board for "cause."  Under the success
bonus plan,  the members of the Special  Committee may receive bonus payments on
the Success Payment Date.  Such bonus payments will not in the aggregate  exceed
$300,000.


 ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         As at December 10, 1999, no person or group is known to the Partnership
to be the  beneficial  owner of more than five  percent  (5%) of the Units.  The
general partners of Synthetic G.P. and their respective  stockholders do not own
any Units.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         On August 31, 1999, in accordance with the terms ofb the bsettlement of
     two  putative  class   derivative   action  lawsuits   resulting  from  the
Partnership's  proposed  plan of  sissolution,  SI  Management  L.P. resigned as
general  partner  of  the  Partnership,  resulting  in  the  dissolution  of the
Partnership.  Until that time,  however, SI Management L.P. was the sole general
partner  of the  Partnership.  Synthetic  Management  G.P.  is the sole  general
partner  of SI  Management  L.P.  By  virtue of these  relationships,  Synthetic
Management  G.P.  controlled the management and affairs of the  Partnership  and
therefore,  the Company.  At September 30, 1999, the Partnership owned 5,699,194
shares of Common  Stock,  or  approximately  66% of the issued  and  outstanding
shares of Common Stock,  and  therefore  holds the voting power to determine the
outcome of all matters upon which stockholders vote.

     The partners of Synthetic  Management  G.P. are the following five Delaware
corporations:   Chill  Investments,   Inc.,  Beckman  Investments,  Inc.,  Freed
Investments,  Inc., Kenner Investments,  Inc. and W.G. Wright Investments,  Inc.
Each of Messrs.  Chill,  Beckman,  Freed, Kenner and Wright is the sole director
and the sole stockholder of one of Synthetic  Management  G.P.'s  partners.  For
further information  concerning Messrs. Chill and Kenner see "Executive Officers
and Directors of the Company."

     During  fiscal  1999,  1998 and 1997,  the  Company  paid for  expenses
incurred by the  Partnership in connection with the  Partnership's  (I) proposed
plan of dissolution  in 1997,  (ii) defense of two putative class and derivative
action  lawsuits  resulting  from its proposed  plan of  dissolution,  and (iii)
dissolution,  liquidation  and winding up of its affairs in connection  with the
sale process of the Company.  During  fiscal  1999,  1998 and 1997,  the Company
incurred $679, $622 and $1,139, respectively,  of such expenses on behalf of the
Partnership.  At September 30, 1999, 1998 and 1997, the amounts  receivable from
the Partnership for such costs were $1,342,  $663 and $1,800,  respectively.  In
May 1998,  the  Company  acquired  82,056  shares of its  Common  Stock from the
Partnership in exchange for $1,759 of amounts  receivable from the  Partnership,
in  partial  settlement  of  expenses  paid  by the  Company  on  behalf  of the
Partnership  during the last two fiscal years. The shares were acquired at their
fair market value and are held in treasury for issuance under the Employee Stock
Purchase Plan.  Upon the  liquidation of the  Partnership in connection with the
settlement,  the  Company  will be  repaid  in cash  all  amounts  due  from the
Partnership.

         Jon P.  Beckman,  a former  executive  officer  of the  Company  and an
affiliate  of the general  partner,  has been  retained as a  consultant  to the
Company.  Pursuant to his  consulting  agreement  with the  Company,  the former
executive  officer  will  receive,  until  January  31,  2000,  or upon  earlier
termination of his  consulting  agreement,  $125 per year and various  insurance
coverages,  and will be authorized to exercise all stock options awarded to him,
subject to  applicable  vesting  provisions.  Under this  agreement,  the former
executive  officer  is  required  to  provide  the  Company  with  20  hours  of
consultation  per month,  has released the Company from any liability  resulting
from his employment and has also agreed not to compete against the Company.

         The Company  leases  office space under a five-year  lease with William
Gardner Wright, Jr. one of the Company's former executive officers.  The term of
the lease  expires on September 30, 2003 and the rent is  approximately  $52 per
year, which the Company believes is within prevailing market rates.

         Pursuant to a licensing  agreement with the Company, W. Wayne Freed, an
executive officer of the Company,  receives royalties related to the manufacture
and sale of a certain  product for which the  executive  officer owns all of the
U.S. and foreign  patents.  Under this agreement,  the Company paid royalties of
approximately  $19 and $10 in  fiscal  1999  and  1998,  respectively,  and will
continue  to pay such  royalties  until 2012 or the earlier  termination  of the
licensing agreement.

         During fiscal 1999 and 1998 the Company paid fees of approximately $211
and $125, respectively, to a law firm in which Mr. Joseph Dana, an officer and a
director of the  Company,  was a member until May 21,  1997.  Effective  May 21,
1997, Mr. Dana became employed as Chief Operating Officer and General Counsel of
the Company. On August 6, 1999, Mr. Dana was named President of the Company.


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
            AND REPORTS ON FORM 8-K


(a)      Index to Consolidated Financial Statements:


      (1)   Financial Statements:

            Independent Auditors' Report                 F-1
            Consolidated Balance Sheets                  F-2
            Consolidated Statements of Operations        F-3
            Consolidated Statements of Changes in
               Partners' Equity                          F-4
            Consolidated Statements of Cash Flows        F-5
            Notes to Consolidated Financial Statements   F-6


(b) The  Partnership  did not file a Current  Report on Form 8-K during the last
quarter of the fiscal year covered by this Annual Report.

(c) Exhibits: See Exhibit Index immediately following Item 14.

(d) No additional financial statements are required to be filed.




<PAGE>


                                  EXHIBIT INDEX


Location in
Sequential
Page Numbering
System

                      The following are the Exhibits as required by Item 14 (c).

            1         2.1 Acquisition  Agreement dated November 21, 1986 between
                      Synthetic Industries,  Inc., Synthetic Industries Limited,
                      Polyweave  Corporation,   the  shareholders  of  Synthetic
                      Industries,  Inc.,  Synthetic  Industries  Limited  and SI
                      Holding Inc. including exhibits thereto.

            1         2.2  Plan and Agreement of Merger dated December 4, 1986.

            2         2.3 Asset Purchase Agreement dated October 12, 1990
                      between Synthetic Industries, Inc. and Chicopee.

            16        2.4 Agreement and Plan of Merger,  dated November 5, 1999,
                      among SIND Holdings,  Inc., and Synthetic  Industries,
                      Inc.

            6         3.1 Certificate of  Incorporation of Synthetic Industries,
                      Inc.  (including all amendments to date) filed with
                      the Secretary of the State of Delaware.

            6         3.2  Amended and Restated By-Laws of Synthetic Industries,
                      Inc. (including all amendments to date).

           10         4.4  Indenture  dated  as of  February  11,  1997  between
                      Synthetic Industries, Inc. and United Stated Trust Company
                      of New York,  Trustee,  with  respect to the 9 1/4% Senior
                      Subordinated Notes due 2007.

           10         4.5 Registration  Rights Agreement,  dated as of February
                      11, 1997, between Synthetic  Industries,  Inc. and Bear
                      Stearns & Co. Inc.

           8          4.6  Registration  Rights  Agreement,  dated as of October
                      31,  1996,  between  Synthetic  Industries,  Inc.  and
                      Synthetic Industries, L.P.

           16         4.7 Supplemental  Indenture dated as of November 29, 1999,
                      between Synthetic Industries, Inc. and United States Trust
                      Company of New York,  trustee  with  respect to the 9 1/4%
                      senior subordinated Notes due 2007.

            2         10.1  US Patent No. 4,867,614, Reinforced Soil and Method
                      (Exp. December 13, 2003).

            2         10.2  US Patent No. 4,790,691, Fiber Reinforced Soil and
                      Method (Exp. December 13, 2003).

            2         10.3  US Patent No. 5,007,766, Shaped Barrier for Erosion
                      Control and Sediment Collection (Exp. April 16, 2008).

            1         10.4 Lease  agreement  dated November 22, 1971 between
                      Murray Sobel and Synthetic  Industries,  Inc.  (including
                      all amendments to date).

            1         10.5 Lease  agreement  dated February 13, 1969,  between
                      Murray Sobel and wife,  Marcela S. Sobel,  and Joseph F.
                      Decosimo,  Frank M. Thompson and Murray Sobel, Trustees
                      and Synthetic Industries,  Inc. (including all amendments
                      to date).

            2         10.6  Lease agreement dated December 17, 1990 between
                      Chicopee and Synthetic Industries, Inc.

            2         10.7 Lease  agreement  dated  January 17, 1991  between
                      Herchel L.  Webster and Allie Ree Webster and  Synthetic
                      Industries, Inc. (the "Lumite Lease").

            3         10.8  Amendment to the Lumite Lease dated October 1, 1992.

            2         10.9  Consulting  Agreement dated July 23, 1991 between
                      Texpro  Limitada y Cia S.C.A.  and Synthetic  Industries,
                      Limited.

            4         10.10 Supply Contract  between Eastman  Chemical Products,
                      Inc. and Synthetic  Industries,  Inc. dated December
                      13, 1991.

            15        10.11  Agreement dated September 24, 1998 between Leonard
                      Chill and Synthetic Industries, Inc.

            15        10.12 Agreement dated September 24, 1998 between W. Wayne
                      Freed and Synthetic Industries, Inc.

            15        10.13  Agreement dated September 24, 1998 between Ralph A.
                      Kenner and Synthetic Industries, Inc.

            9         10.14 Agreement dated September 6, 1996 between W. Gardner
                      Wright, Jr. and Synthetic Industries, Inc.

            9         10.15  Agreement dated September 6, 1996 between John M.
                      Long and Synthetic Industries, Inc.

            15        10.16 Agreement dated September 24, 1998 between Charles
                      T. Koerner and Synthetic Industries, Inc.

15                    10.17  Agreement  dated  September 24, 1998 between Joseph
                      Sinicropi and Synthetic Industries, Inc.

15                    10.18  Agreement  dated  September  24, 1998 between Bobby
                      Callahan and Synthetic Industries, Inc.

15                    10.19 Agreement dated September 24, 1998 between Joseph F.
                      Dana and Synthetic Industries, Inc

            15        10.20  Agreement dated August 10, 1998 between Richard
                       Hingson and Synthetic Industries, Inc.

            5         10.21  1994 Stock Option Plan for Non-Employee Directors

            5         10.22  1994 Stock Option Plan

            7         10.23  1996 Stock Option Plan

            7         10.24  Incentive Compensation Plan Fiscal Year 1994/1995

            7         10.25  Incentive Compensation Plan Fiscal Year 1995/1996

            15        10.26  Incentive Compensation Plan Fiscal Year 1996/1997

            15        10.27 Incentive Compensation Plan Fiscal Year 1997/1998

            16        10.28 Incentive Compensation Plan Fiscal Year 1999/2000

            11        10.29 Asset Sale  Agreement by and between  Spartan Mills
                      and  Synthetic  Industries,  Inc.  dated as of February
                      27, 1997.

            11        10.30 Lease  Agreement by and between  Spartan  Mills and
                      Synthetic  Industries,  Inc.  dated as of February 27,
                      1997.

            12        10.31 Receivable Purchase and Sale Agreement dated as of
                      December 18, 1997 among Synthetic  Industries,  Inc.,
                      BankBoston and other Lenders , and BankBoston, as agent on
                      behalf of the Lenders.

            15        10.32 Loan and Security Agreement dated dated as of
                      December 18, 1997.

            15        10.33 Amendment No.1 to the Loan and Security Agreement
                      dated as of December 18, 1997.

            13        10.34  Amendment No. 2 to the Loan and Security Agreement
                      dated as of December 18, 1997.

            14        10.35  Amendment No. 3 to the Loan and Security Agreement
                      dated as of December 18, 1997

            15        10.36  Amendment No. 4 to the Loan and Security Agreement
                      dated as of December 18, 1997.

            15        10.37 Supplemental Savings Plan

            15        21.  List of Subsidiaries of Synthetic Industries, Inc.

                      27.  Financial Data Schedule
--------------
1    Filed as an exhibit to the  Company's  Registration  Statement  on Form S-1
     (33-11479) as filed with the Securities and Exchange  Commission on January
     23, 1987 and incorporated herein by reference.

2    Filed as an exhibit to the  Company's  Registration  Statement  on Form S-1
     (33-51206) as filed with the Securities  and Exchange  Commission on August
     24, 1992 and incorporated herein by reference.
 .

3    Filed  as  an  exhibit  to  the  Partnership's   Amendment  No.  1  to  the
     Registration  Statement on Form 10  (0-21548) as filed with the  Securities
     and  Exchange  Commission  on August 10,  1993 and  incorporated  herein by
     reference.

4    Pursuant to an order dated October 19, 1992,  the  Securities  and Exchange
     Commission granted confidential  treatment with respect to certain portions
     of this exhibit under Rule 406 of the Securities Act of 1933, as amended.

5    Filed as an exhibit  to the  Company's  Annual  Report on Form 10-K for the
     fiscal year ended September 30, 1994 and incorporated herein by reference.

6    Filed as an exhibit to the  Company's  Registration  Statement  on Form 8-A
     (0-12357) as filed with the Securities  and Exchange  Commission on October
     24, 1996 and incorporated herein by reference.

7    Filed as an exhibit to the  Company's  Registration  Statement  on Form S-1
     (333-09377) as filed with the Securities and Exchange  Commission on August
     1, 1996 and incorporated herein by reference.

8    Filed  as an  exhibit  to  Amendment  No. 1 to the  Company's  Registration
     Statement on Form S-1 (333-09377) as filed with the Securities and Exchange
     Commission on September 13, 1996 and incorporated herein by reference.

9    Filed  as an  exhibit  to  Amendment  No. 2 to the  Company's  Registration
     Statement on Form S-1 (333-09377) as filed with the Securities and Exchange
     Commission on October 2,1996 and incorporated herein by reference.

10   Filed as an exhibit to the  Company's  Registration  Statement  on Form S-4
     (File No.  333-23167) as filed with the Securities and Exchange  Commission
     on March 12, 1997 and incorporated herein by reference.

11   Filed  as an  exhibit  to  Amendment  No. 3 to the  Company's  Registration
     Statement on Form S-4 (File No. 333-28817) as filed with the Securities and
     Exchange Commission on September 17, 1997.

12   Filed as an exhibit to the Company's  Quarterly Report on Form 10-Q for the
     quarter ended December 31, 1998 and incorporated herein by reference.

13   Filed as an exhibit to the Company's  Quarterly Report on Form 10-Q for the
     quarter ended March 31, 1998 and incorporated herein by reference.

14   Filed as an exhibit to the Company's  Quarterly Report on Form 10-Q for the
     quarter ended June 30, 1998 and incorporated herein by reference.

15   Filed as an exhibit  to the  Company's  Annual  Report on Form 10-K for the
     year ended September 30, 1998 and incorporated herein by reference.


16   Filed as an exhibit to the Company's Solicitation/Registration Statement on
     Schedule 14D-9 and incorporated herein by reference.





<PAGE>












INDEPENDENT AUDITORS' REPORT


To the Partners of
Synthetic Industries L.P.
Chickamauga, Georgia


We have  audited  the  accompanying  consolidated  balance  sheets of  Synthetic
Industries  L.P.  and  subsidiary  as of  September  30, 1999 and 1998,  and the
related consolidated statements of operations,  changes in Partners' capital and
cash flows for each of the three years in the period ended  September  30, 1999.
These  financial   statements  are  the   responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those 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 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 audits provide a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the  financial  position of Synthetic  Industries  L.P. and
subsidiary at September 30, 1999 and 1998,  and the results of their  operations
and their cash flows for each of the three years in the period  ended  September
30, 1999 in conformity with generally accepted accounting principles.




/S/ Deloitte & Touche LLP


Deloitte & Touche LLP
New York, New York

November 30, 1999
(Except for Note 21, as to which
the date is December 14, 1999)


<PAGE>

<TABLE>


                                                       SYNTHETIC INDUSTRIES L.P.
                                                            AND SUBSIDIARY
                                                      CONSOLIDATED BALANCE SHEETS
                                (In thousands of dollars, except limited partnership units outstanding)

                                                                                          September 30,
                  ASSETS                                                               1999           1998
                                                                                     --------       --------

<S>                                                                             <C>                <C>
CURRENT ASSETS:
  Cash.......................................................................    $      189        $   287
  Accounts receivable, net (Note 4)..........................................        65,491         64,251
  Inventory (Note 5).........................................................        60,591         52,450
  Other current assets (Note 6)..............................................        19,595         16,644
                                                                                  ---------       --------

      TOTAL CURRENT ASSETS...................................................       145,866        133,632

PROPERTY, PLANT AND EQUIPMENT, net (Note 7)..................................       222,307        218,449

OTHER ASSETS (Note 8)........................................................        91,765         87,770
                                                                                  ---------       --------

                                                                                   $459,938       $439,851

          ........LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Accounts payable...........................................................      $ 30,862       $ 26,438
  Accrued expenses and other current liabilities.............................        15,487         13,653
  Income taxes payable (Note 12).............................................         2,738            285
  Interest payable...........................................................         2,160          2,154
  Current maturities of long-term debt (Note 9)..............................         2,389          5,500
                                                                                 ----------    -----------

         TOTAL CURRENT LIABILITIES...........................................        53,636         48,030

LONG-TERM DEBT (Note 9)......................................................       231,221        236,843

DEFERRED INCOME TAXES (Note 12)..............................................        37,628         32,996

MINORITY INTEREST IN SUBSIDIARY..............................................        46,975         41,437


COMMITMENTS AND CONTINGENCIES (Note 18)

PARTNERS' CAPITAL
  General Partner Capital ...................................................           904            805
  Limited Partners' Capital, 800 Units issued and outstanding................        89,574         79,740
                                                                                  ---------      ---------

      TOTAL PARTNERS' CAPITAL................................................        90,478         80,545
                                                                                  ---------      ---------

                                                                                   $459,938       $439,851

                                            See notes to consolidated financial statements
</TABLE>

<PAGE>

<TABLE>


                                                       SYNTHETIC INDUSTRIES L.P.
                                                           AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (In thousands of dollars, except per partnership unit amounts)

                                                                                    Year ended September 30,
                                                                            1999             1998              1997
                                                                         -----------       ---------        ---------

<S>                                                                       <C>               <C>              <C>
Net sales...............................................................  $ 384,822         $368,996         $345,572
                                                                          ---------         --------         --------
Costs and expenses:
  Cost of sales ........................................................    251,780          246,677          233,187
  Selling expenses......................................................     42,940           39,358           31,801
  General and administrative expenses (Note 10).........................     37,798           31,479           27,701
  Plant combination costs (Note 11).....................................      2,200                -                -
  Equipment relocation costs (Note 11)..................................      2,100                -                -
  Amortization of excess of purchase price over net
      assets acquired and other intangibles.............................      3,183            2,787            2,592
                                                                           --------         --------         --------
                                                                            340,001          320,301          295,281
                                                                            -------         --------         --------

Operating income........................................................     44,821           48,695           50,291
                                                                           --------        ---------         --------

Other expenses:
  Interest expense......................................................     19,626           18,515           20,085
  Amortization of deferred financing costs..............................        804              729              654
                                                                           --------          -------         --------
                                                                             20,430           19,244           20,739
                                                                            -------         --------         --------

Income before provision for income taxes, minority interest in
Subsidiary net income and extraordinary item............................     24,391           29,451           29,552

Provision for income taxes (Note 12)....................................      9,654           11,855           12,541
                                                                           --------         --------        ---------

Income before minority interest in subsidiary net income and
extraordinary item......................................................     14,737           17,596           17,011

Minority interest in subsidiary net income..............................      5,286            6,167            1,864
                                                                              -----            -----            -----

Income before extraordinary item........................................      9,451           11,429           15,147

Extraordinary item - Loss from early  extinguishment of debt (net of tax
  benefit of $7,481) (Note 9)...........................................             -             -           11,950
                                                                          ------------  ------------        ---------

NET INCOME..............................................................    $ 9,451         $ 11,429          $ 3,197
                                                                            =======         ========          =======

Net income attributable to:
    General partner.....................................................      $  94          $   115          $    32
    Limited partner.....................................................      9,357           11,314            3,165
                                                                              -----           ------           ------

                                                                             $9,451          $11,429          $ 3,197
                                                                            =======          =======          =======

Income per limited partnership unit (basic and diluted).................    $11,696          $14,143           $3,956
Limited partnership units outstanding (basic and diluted)...............        800              800              800






                                            See notes to consolidated financial statements
</TABLE>

<PAGE>



<TABLE>
                                                       SYNTHETIC INDUSTRIES L.P.
                                                            AND SUBSIDIARY
                                        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                                       (In thousands of dollars)




                                                                                                                  Total
                                                          General                        Limited                Partners'
                                                         Partner                        Partner               Capital

<S>                                                            <C>                     <C>                         <C>
Balance, September 30, 1996.............................       649                     64,536                      65,185
Net income..............................................        32                      3,165                       3,197
Equity from the Offering................................         5                        424                         429
Foreign currency translation............................         2                         63                          65
                                                           -------                -----------                 -----------

Balance, September 30, 1997.............................       688                     68,188                      68,876

Net income..............................................       115                     11,314                      11,429
Foreign currency translation............................         -                         39                          39
Exercise stock options..................................         1                         52                          53
Stock transfer..........................................         1                        147                         148
                                                           -------                 ----------                  ----------

Balance, September 30, 1998.............................       805                     79,740                      80,545

Net income..............................................        94                      9,357                       9,451
Foreign currency translation............................         -                        (21)                        (21)
Exercise stock options..................................        (1)                      (157)                       (158)
Stock transfer..........................................         6                        655                         661
                                                           -------                  ---------                    --------

Balance, September 30, 1999.............................     $ 904                    $89,574                     $90,478
                                                             =====                    =======                     =======



                                            See notes to consolidated financial statements
</TABLE>

<PAGE>

<TABLE>

                                                       SYNTHETIC INDUSTRIES L.P.
                                                           AND SUBSIDIARIES
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (In thousands of dollars)
                                                                                   Year ended September 30,
                                                                              1999              1998       1997
                                                                             ------            -----      -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>             <C>               <C>
  Net income............................................................   $  9,451        $  11,429         $  3,197
  Adjustments to reconcile net income to cash provided by operations:
    Minority interest in subsidiary net income..........................      5,286            6,167            1,864
    Extraordinary loss on early extinguishment of debt..................          -                -           19,431
    Depreciation and amortization.......................................     24,734           21,261           18,236
    Loss on disposal of assets .........................................      1,282                -                -
    Deferred income taxes...............................................      2,701            4,977            2,270
    Provision for (recoveries of) bad debts.............................        324              (13)             520
  Change in operating assets and liabilities, net of acquisition:
    Accounts receivable.................................................       (344)          (2,478)          (9,993)
    Inventory...........................................................     (7,076)           3,343          (13,634)
    Other assets........................................................     (8,157)          (1,232)             236
 Accounts payable.......................................................      3,808           (3,166)           6,803
    Accrued expenses and other current liabilities......................      1,233            2,046            1,111
    Income taxes payable................................................      2,222              323           (1,355)
    Interest payable....................................................          6             (313)          (3,557)
                                                                         ----------       -----------     ------------
      Net cash provided by operating activities.........................     35,470           42,344           25,129
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property, plant and equipment............................    (32,166)         (46,112)         (53,980)
  Proceeds from assets sold.............................................     13,249                -                -
  Acquisition of businesses, net of cash acquired.......................     (3,327)          (6,000)          (9,354)
                                                                             -------          -------        ---------
    Net cash used in investing activities ..............................    (22,244)         (52,112)         (63,334)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments under term loan............................................          -          (25,000)         (20,000)
  Net borrowings (repayments) under the credit facility.................     (7,943)          43,607            9,427
  Repayments of capital lease obligation and other long-term debt.......     (6,090)          (1,002)            (660)
  Issuance of 9 1/4% Senior subordinated notes..........................          -                -          170,000
  Redemption of 12 3/4% Senior subordinated debentures..................          -           (7,403)        (132,597)
  Prepayment costs on early extinguishment of debt......................          -                -          (15,920)
  Proceeds from underwritten public offering............................          -                -           33,681
  Proceeds from exercise of stock options...............................        142               85                -
  Proceeds from sale of treasury stock under the Employee Stock
    Purchase Plan.......................................................        624              130
  Debt issuance costs...................................................          -             (792)          (5,525)
                                                                         ----------           -------         --------
    Net cash provided by (used in) financing activities.................    (13,267)           9,625           38,406
      Effect of exchange rate changes on cash...........................        (57)              90               36
                                                                            --------     -----------        ---------
NET (DECREASE) INCREASE IN CASH.........................................        (98)             (53)             237
CASH AT BEGINNING OF PERIOD.............................................        287              340              103
                                                                          ---------        ---------         --------
CASH AT END OF PERIOD...................................................   $    189         $    287         $    340
                                                                           ========         ========         ========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION Cash paid during the year for:
  Interest .............................................................   $ 21,195         $ 21,232         $ 23,642
  Income taxes..........................................................      7,201            5,927            4,145
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITY
Capital lease obligation incurred for purchase of equipment.............   $  5,300        $   7,500     $          -
Treasury stock conversion...............................................          -            1,759                -
Payable incurred for acquisition of business............................          -            1,302                -
Acquisition of business:
  Fair value of assets acquired, net of cash............................    $ 4,122         $  5,293          $ 9,830
  Liabilities assumed and incurred......................................      1,576            4,880              476
  Cash paid.............................................................      3,327            6,000            9,354

                                            See notes to consolidated financial statements
</TABLE>

<PAGE>





                            SYNTHETIC INDUSTRIES L.P.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (In thousands of dollars, except share and per share information)

1.   ORGANIZATION

     Synthetic  Industries,  L.P. (the  "Partnership") is a limited  partnership
     organized  under the laws of Delaware.  In December 1986,  the  Partnership
     acquired all of the issued and outstanding shares of Synthetic  Industries,
     Inc. (the "Company").  The Company manufactures and markets a wide range of
     polypropylene-based  fabric  and fiber  products  designed  for  industrial
     applications.  The  Company's  diverse mix of products  are marketed to the
     floor covering, construction and technical textile markets for such end-use
     applications  as carpet backing,  geotextiles,  erosion  control,  concrete
     reinforcement and furniture construction fabrics.

     Since  its  organization  in  1986  and  subsequent  admission  of  limited
     partners,  the  Partnership  has  conducted no business  except  owning and
     voting the shares of the  Company.  As a result of its public  offering  of
     Common Stock in November 1996,  the Company had 8,682,067  shares of Common
     Stock  outstanding  at September 30, 1999, of which  approximately  66% are
     owned by the Partnership.  As the Partnership has no independent operations
     or assets  other than its  investment  in the  Company,  the  Partnership's
     financial  statements are substantially  identical to those of the Company,
     with the exception of the minority interest and certain expenses recognized
     by the Partnership  associated with a withdrawn common stock offering. As a
     result,  the footnote  information  presented  below relates to that of the
     Company,  except as disclosed.  Accordingly,  all references to fiscal year
     refer to the Company's fiscal year which ends on September 30th.

     On  November  5,  1999,  the  Company  announced  that  it  entered  into a
     definitive  merger agreement with SIND Holdings,  Inc., a company organized
     by Investcorp  S.A.,  together with certain  affiliated  entities and other
     international  investors (the "Merger"). In connection with the Merger, the
     Partnership was liquidated. See "Subsequent Event" (Note 21).


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of consolidation

     The consolidated  financial  statements include the accounts of the Company
     and  its  subsidiaries.   All  significant  intercompany  transactions  and
     balances have been eliminated.

     Revenue recognition

     Revenue from product sales is recognized at the time of shipment.


     Research and development

     The  Company's  research  and market  development  is focused  primarily on
     development and as such the Company engages in product design,  development
     and performance  validation to improve existing  products and to create new
     products.  The Company expended approximately $9,900, $8,100, and $4,200 in
     fiscal 1999, 1998, and 1997, respectively.  Research and market development
     costs are expensed as incurred  and included in general and  administrative
     expenses.


     Foreign currency translation

     The assets and  liabilities of foreign  subsidiaries  are translated at the
     fiscal  year-end  rates of  exchange,  and the  results of  operations  are
     translated  at the  average  rates of  exchange  for the  years  presented.
     Unrealized  gains or losses  resulting from  translating  foreign  currency
     financial  statements  are  accumulated in the other  comprehensive  income
     account  in  the   stockholders'   equity   section  of  the   accompanying
     consolidated balance sheets.  Foreign currency transaction gains and losses
     are  included  in results of  operations.  Foreign  currency  realized  and
     unrealized gains and losses for the years presented were not material.

     Comprehensive income (loss)

     In 1999, the Company adopted  Statement of Financial  Accounting  Standards
     ("SFAS")  No. 130,  "Reporting  Comprehensive  Income"  which  requires the
     display of comprehensive  income (loss) and its components in the financial
     statements.  The Company's  comprehensive  income includes net earnings and
     unrealized  gains  and  losses  from  foreign  currency  translation.   The
     components  of the  Company's  comprehensive  income  and  the  effects  on
     earnings, for the three years ended September 30, 1999, are detailed in the
     Company's accompanying  Consolidated Statements of Changes in Stockholders'
     Equity.

     Inventory

     Inventory is stated at the lower of cost,  determined  using the  first-in,
     first-out method, or market.

     Property, plant and equipment

     Property,   plant  and  equipment  is  stated  at  cost  less   accumulated
     depreciation   and   amortization.   Depreciation   is   provided   on  the
     straight-line method based on estimated useful lives, as follows:

                                   Building and improvements          25 years
                                   Machinery and equipment            14 years

     Leasehold improvements are amortized over the shorter of the useful life of
     the asset or the term of the lease.  Expenses for repairs,  maintenance and
     renewals are charged to operations as incurred.  Expenditures which improve
     an asset or extend its useful life are  capitalized.  When  properties  are
     retired  or  otherwise  disposed  of,  the  related  cost  and  accumulated
     depreciation and amortization are removed from the accounts and any gain or
     loss is included in the results of operations.

     Capitalized  interest is charged to machinery  and  equipment and amortized
     over the lives of the related assets.  Interest  capitalized  during fiscal
     1999, 1998 and 1997 was $1,575, $2,404 and $838, respectively.

     Income taxes

     The Company accounts for income taxes using an asset and liability approach
     in accordance with SFAS No. 109. Under SFAS 109,  deferred income taxes are
     recognized for the tax  consequences  of temporary  differences by applying
     enacted  statutory  tax rates  applicable  to future  years to  differences
     between  the  financial  statement  carrying  amounts  and the tax bases of
     existing assets and  liabilities.  The effect on deferred taxes of a change
     in tax rates is recognized  in the  statement of operations  for the period
     that includes the enactment date.

     Excess of purchase price over net assets acquired

     The excess of purchase  price over net assets  acquired is  amortized  on a
     straight-line  basis  over a period of 20 to 40 years.  Excess of  purchase
     price over net assets acquired is assessed for  recoverability on a regular
     basis.  In  evaluating  the value and  future  benefits  of  goodwill,  its
     carrying value would be reduced by the excess,  if any, of the balance over
     management's  best  estimate  of  undiscounted  future  cash  flows  before
     amortization   of  the  related   intangible   assets  over  the  remaining
     amortization period.

     Software development costs

     During fiscal 1999, the Company  adopted the AICPA's  Statement of Position
     98-1,  "Accounting for the Costs of Computer Software Developed or Obtained
     for Internal Use".  Accordingly,  certain  computer  software project costs
     incurred during the application development stage have been capitalized and
     are being amortized on a straight line basis over a period of 3 years. Such
     costs include  external direct costs of materials and services  consumed in
     developing  internal-use  software,  payroll  costs for  employees  who are
     directly  associated with the  internal-use  computer  software project and
     interest  costs  incurred  during  development,  and are  included in other
     assets in the consolidated balance sheet.

     Deferred financing and intangible assets

     Deferred  financing  costs are  amortized  over periods from 5 to 10 years.
     Intangible  assets  consist  primarily of a  Fibermesh(R)     trademark and
     patents  on  civil   engineering   products,   which  are  amortized  on  a
     straight-line basis over 40 and 15 years, respectively.

     Fair value disclosures

     SFAS No.  107,  "Disclosure  About  Fair Value of  Financial  Instruments,"
     requires  certain  disclosures  of financial  instruments.  Cash,  accounts
     receivable,  accounts  payable and accrued  expenses  are  reflected in the
     consolidated  financial  statements at cost, which approximates fair value,
     because of the short-term maturity of these instruments. See note 9 for the
     fair value of long-term debt.

     Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.


     Recent accounting pronouncement

     In June 1998, the Financial  Accounting  Standards  Board ("FASB") SFAS No.
     133, "Accounting for Derivative Instruments and Hedging Activities",  which
     must be adopted for fiscal  quarters of fiscal years  beginning  after June
     15, 1999,  (in 1999 the FASB delayed the effective  date of SFAS 133 by one
     year).  SFAS 133  requires the  recognition  of all  derivatives  as either
     assets  or  liabilities   in  the  statement  of  financial   position  and
     measurement of those  instruments at fair value.  Management  believes that
     SFAS 133 will  not have a  material  effect  on the  Company's  results  of
     operations or financial position.


3.   BUSINESS ACQUISITIONS

     Acquisitions are accounted for using the purchase method of accounting, and
     accordingly,  the purchase price has been allocated to the assets acquired,
     net of any acquired cash, and liabilities  assumed,  if any, based upon the
     fair market value at the date of  acquisition.  Any excess  purchase  price
     over the fair  values  of the net  assets  acquired  has been  recorded  as
     goodwill,  which is being amortized on a straight-line basis over 20 years.
     The operating results of the acquired  businesses have been included in the
     consolidated statement of operations from the date of acquisition.

     On August 1, 1999, the Company  acquired all of the  outstanding  shares of
     High Point  Fabrics  and  Supplies,  Inc.,  a  converter  and  marketer  of
     furniture and bedding  construction  fabrics, for $600 (of which $100 is in
     escrow), net of cash acquired. The purchase price has been allocated to the
     assets  acquired of $742 and the liabilities  assumed of $372.  Goodwill of
     $230 was recorded.

     On July  7,1999,  the Company  acquired  all of the  outstanding  shares of
     BonTerra America,  Inc., certain assets of an affiliated company and rights
     to the international  name for $3,044 (of which $250 is in escrow),  net of
     cash  acquired  and  including  repayment  of $1,198 for a note payable and
     assumption  of a  note  payable  of  $317.  BonTerra  America,  Inc.,  is a
     manufacturer and marketer of natural erosion control products. The purchase
     price has been allocated to the assets  acquired,  net of acquired cash, of
     $3,381  (primarily  accounts  receivable  of  $923,  inventory  of $764 and
     property,  plant and  equipment of $1,424) and the  liabilities  assumed of
     $888 (primarily accounts payable of $499). Goodwill of $551 was recorded.

     On March 18, 1998, pursuant to a Stock Purchase Agreement,  as subsequently
     amended,  the Company  acquired  all of the  outstanding  shares of Novocon
     International,   Inc.  (the  "Novocon  Acquisition"),  a  manufacturer  and
     marketer of steel concrete  reinforcing  fibers,  for $7,302.  The purchase
     price has been  allocated  to the  assets  acquired  of  $5,293  (primarily
     accounts  receivable and inventory of $1,731 and $1,654,  respectively) and
     the liabilities  assumed of $4,880  (primarily  accounts  payable and other
     debt of $2,545 and $2,335, respectively). Goodwill of $7,564 was recorded.

     On February 27, 1997,  the Company  acquired  certain assets of the Spartan
     Technologies  division of Spartan  Mills (the  "Spartan  Acquisition")  for
     $9,354.  The purchase  price has been  allocated to the assets  acquired of
     $9,830 (primarily accounts receivable,  inventory,  and property, plant and
     equipment of $2,635,  $1,363 and $5,138,  respectively) and the liabilities
     assumed of $476.


4.  ACCOUNTS RECEIVABLE

     Accounts  receivable  are  presented  net of  the  allowance  for  doubtful
     accounts of $2,700 and $2,714 at September 30, 1999 and 1998, respectively.
     The Company had amounts written off against established  allowances for the
     year ended  September  30, 1999 of $324 and net  recoveries  of $20 for the
     year ended September 30, 1998 and amounts  written off against  established
     allowances of $849 for the year ended September 30, 1997.

     The Company grants  uncollateralized  trade terms to most U.S. customers. A
     majority of the Company's  carpet backing sales are with customers  located
     in the state of Georgia.  As of  September  30, 1999 and 1998,  $28,925 and
     $27,766,  respectively,  of the Company's accounts receivable balances were
     due from customers located in this state.


5.   INVENTORY
                                                        September 30,
                                                    1999               1998
                                                    ----               ----

        Finished goods............................$ 44,351            $ 37,689
        Work in process.........................     6,810               7,107
        Raw materials...........................     9,430               7,654
                                                   -------             -------

                                                 $  60,591            $ 52,450

6.   OTHER CURRENT ASSETS
                                                          September 30,
                                                   1999                1998
                                                   ----                ----

       Prepaid supplies........................   $10,028            $  9,603
       Deferred tax assets (Note 12)...........     6,461               4,639
       Insurance receivable....................     1,663               1,110
       Other...................................     1,443               1,292
                                                ---------           ---------

                                                  $19,595             $16,644

7.   PROPERTY, PLANT AND EQUIPMENT

                                                         September 30,
                                                    1999               1998
                                                    ----               ----

       Land....................................  $  4,585            $  4,585
       Buildings and improvements..............    46,061              42,588
       Equipment under capital leases..........    12,800              12,500
       Machinery and equipment and
         leasehold improvements................   287,214             266,972
                                                  -------            --------

                                                  350,660             326,645
       Accumulated depreciation................   128,353             108,196

                                                 $222,307            $218,449

Depreciation expense on property,  plant and equipment was $20,747,  $17,745 and
$14,990 in fiscal 1999, 1998 and 1997, respectively.




8.  OTHER ASSETS
                                                           September 30,
                                                    1999               1998
                                                    ----               ----

     Excess of purchase price
        over net assets acquired................. $108,160           $107,379
     Intangible assets................. .............4,236              3,698
     Software development costs......................6,405                  -
     Deferred financing costs....................   12,701             12,443
                                                 ---------          ---------

                                                   131,502            123,520
     Accumulated amortization....................   39,737             35,750
                                                  --------            -------

                                                  $ 91,765           $ 87,770
                                                  ========           ========

     Amortization expense was $3,987, $3,516 and $3,246 in fiscal 1999, 1998 and
1997, respectively.


9.   LONG-TERM DEBT
                                                         September 30,
                                                     1999              1998
     Credit facility:
      Securitization                             $  33,601           $29,162
      Revolver                                      17,640            30,022
     9 1/4% senior subordinated notes, due 2007    170,000           170,000
     Capital lease obligations (Note 19)            11,216            10,647
     Other                                           1,153             2,512
                                                  --------           -------
                                                   233,610           242,343
     Less current portion                            2,389             5,500
                                                  --------           -------

     Total long-term portion                     $ 231,221          $236,843
                                                 =========          ========

     Credit Facility
     On December  18,  1997,  the Company and its lenders,  with  BankBoston  as
     agent,  entered into a five-year  credit facility (the "Credit  Facility").
     Proceeds from the Credit Facility were used to repay the Fourth Amended and
     Restated  Revolving  Credit  Agreement  dated October 20, 1995.  The Credit
     Facility consists of up to a $40 million asset based securitization program
     (the  "Securitization"),  with  amounts  borrowed  through  a wholly  owned
     subsidiary, Synthetic Funding Corporation, and a $60 million senior secured
     revolver facility (the "Revolver"). In conjunction with the Securitization,
     the  Company  entered  into  a  five-year  agreement  with  its  subsidiary
     providing  for  the  sale  of  substantially  all of its  receivables  on a
     revolving basis.  Securitization and Revolver borrowings are collateralized
     by the Company's accounts receivable and substantially all of the assets of
     the Company, excluding real property, respectively.

     Interest on the Securitization is based on the applicable  commercial paper
     rate in effect plus a spread.  The Revolver  permits  borrowings which bear
     interest, at the Company's option, (i) for domestic borrowings based on the
     lender's base rate or (ii) for Eurodollar borrowings based on a spread over
     the Interbank  Eurodollar  rate at the time of conversion.  Spreads for the
     Securitization  and  the  Eurodollar   borrowings  are  determined  by  the
     operational performance of the Company. At September 30, 1999, the balances
     under  the   Securitization   and   Revolver   were  $33,601  and  $17,640,
     respectively, at interest rates ranging from 5.63% to 8.25%.

     The  Revolver  provides  for  borrowings  under  letters of credit of up to
     $10,000,  which borrowings reduce amounts available under the Revolver.  At
     September 30, 1999, letters of credit of $304 were outstanding.

     The  Credit  Facility  contains  covenants  related to the  maintenance  of
     certain  operating  ratios  and  limitations  as to the  amount of  capital
     expenditures.  The  Company's  ability to pay  dividends on Common Stock is
     prohibited under the Credit Facility.


     Senior Subordinated Debentures and Notes

     On February 11, 1997,  the Company issued  $170,000 in aggregate  principal
     amount of 9 1/4% Senior  Subordinated  Notes due 2007 (the "Notes"),  which
     represent unsecured obligations of the Company. The Notes are redeemable at
     the  option  of the  Company  at any time on or after  February  15,  2002,
     initially at 104.625% of their amount, together with accrued interest, with
     declining  redemption prices  thereafter.  Interest on the Notes is payable
     semi-annually on February 15 and August 15.

     In  connection  with  the  issuance  of the  Notes,  the  Company  redeemed
     approximately  $132,600 principal amount of its 12 3/4% Senior Subordinated
     Debentures due 2002 (the  "Debentures") at a redemption price of 111.07% of
     the principal  amount thereof.  In addition,  the Company repaid $20,000 of
     its  outstanding  term loan  borrowings  as of March 5, 1997. In connection
     with  the  early   extinguishment   of  debt,   the  Company   recorded  an
     extraordinary  loss of $11,950  (representing  call premium and  prepayment
     fees of $15,920 and write off of deferred financing costs of $3,511, net of
     an income tax benefit of $7,481) during fiscal 1997.

     On December 1, 1997, the Company  redeemed the remaining  $7,403  aggregate
     principal  amount  of  Debentures  outstanding  at a  redemption  price  of
     106.375% of the principal amount thereof, together with accrued interest as
     of the redemption date.


     Aggregate Minimum Payments and Fair Value

     Approximate  aggregate  minimum  annual  payments due on long term debt and
     capital leases (see Note 19), for the subsequent five fiscal years,  are as
     follows:  2000, $2,389; 2001, $1,444;  2002, $1,550;  2003, $52,906;  2004,
     $1,789; and thereafter, $173,532.

     The fair value of the  Company's  Notes was  estimated  to be  $169,150  at
     September  30, 1999 and 1998.  The fair  values are based on quoted  market
     prices for the Notes in the over-the-counter market.


     In  connection  with  the  sale of the  Company,  substantially  all of the
     Company's debt will be refinanced. See "Subsequent Event" (Note 22).


10.      GENERAL AND ADMINISTRATIVE EXPENSES

     Included  in  general  and  administrative  expenses  for  the  year  ended
September 30, 1999 are the following charges:

a.       Sale  Expenses - In  connection  with the sale  process of the  Company
         conducted  by an  independent  committee  of  the  Company's  Board  of
         Directors (Note 20), the Company incurred investment banking, legal and
         advisory costs of $1,038 during fiscal 1999.

b.       Employee  Retention Costs - In connection with the Merger,  the Company
         implemented  a  retention  bonus  plan  to  preserve  and  protect  the
         Company's  management  during the sale process.  In connection with the
         retention  plan, the Company  recorded  compensation  expense of $1,688
         earned during fiscal 1999.

     Included in general and  administrative  expenses for the  Partnership  was
$679 for expenses incurred by the Company on behalf of the Partnership


11.      PLANT CONSOLIDATION AND EQUIPMENT RELOCATION COSTS

     In fiscal  1999,  the  Company  consolidated  its  non-woven  manufacturing
     facility in Spartanburg,  SC into its modern facility in Ringgold, GA. As a
     result,  the Company  recorded  pretax charges of $4,300 for the year ended
     September 30, 1999.  These charges  reflect  plant  consolidation  costs of
     $2,200 (severance  provisions of $1,100 related to workforce  reductions of
     approximately  105 employees  and a charge of $1,100,  for the write off of
     abandoned  assets)  and  equipment  relocation  costs of $2,100.  The costs
     related to the plant consolidation and equipment relocation have been fully
     paid or charged off during fiscal 1999.


12.  INCOME TAXES

     The sources of income before provision for income taxes are as follows:

                                                Year Ended September 30,

                                         1999           1998          1997
                                         ----           ----          ----

     United States                      $23,570       $28,575        $29,609
     Foreign                              1,500         1,498          1,082
                                       --------       -------        -------
     Earnings before income taxes       $25,070       $30,073        $30,691
                                        =======       =======        =======

     The  provision  for income taxes  attributable  to the amounts  shown above
consists of the following:
                                                 Year Ended September 30,
                                         1999           1998          1997
                                         ----           ----          ----
          Current:
              Federal................    $6,468        $ 4,875        $8,796
              State..................        82            591         1,120
              Foreign................       496            500           355
                                         ------        -------        ------
                                          7,046          5,966        10,271
                                         ------        -------        ------
          Deferred:
              Federal................     2,594          6,594         1,900
              State..................        14           (705)          370
                                         ------        -------        ------
                                          2,608          5,889         2,270
                                         ------        -------        ------

          Total ......................   $9,654        $11,855       $12,541
                                         ======        =======       =======

     As  described  in Note 9, the  Company  recorded a current  tax  benefit of
$7,481 in fiscal 1997 as a result of the early extinguishment of debt.

     A reconciliation of US income tax computed at the statutory rate and actual
tax expense is as follows:
                                               Year Ended September 30,
                                           1999          1998         1997
                                           ----          ----         ----

   Amount computed at statutory rate.....$8,775        $10,526       $10,742
   State and local taxes less applicable
     federal income tax benefit..........   268            978           998
   Amortization of goodwill.............. 1,002            942           873
   Tax credits...........................  (569)          (991)         (405)
   Other nondeductible expenses..........   233            202           181
   Other, net............................   (55)           198           152
                                         ------         ------        ------
                                         $9,654        $11,855       $12,541
                                         ======        =======       =======

     The tax effects of significant  items comprising the Company's net deferred
tax liability are as follows:

                                               September 30,
                                          1999           1998
                                          ----           ----

   Property, plant and equipment........$36,708        $31,754
   Trademarks and patents...............    920          1,242
                                        -------        -------

   Total deferred tax liabilities....... 37,628         32,996
                                         ------         ------


   Accounts receivable..................  1,038            968
   Inventory............................    925            749
   Accrued expenses.....................  2,576          1,869
   State tax credit carryforward........  1,922          1,053
                                         ------         ------

   Total deferred tax assets............  6,461          4,639
                                        -------         ------

   Net deferred tax liability...........$31,167        $28,357
                                        =======        =======

     At September 30, 1999,  the Company has available  state income tax credits
     of $1,922 which are available to reduce future state income taxes,  subject
     to statutory limitations, expiring between 2007 and 2009.


13. RETIREMENT PROGRAMS

     For U.S.  employees,  the Company maintains a trusteed  profit-sharing plan
     ("Plan") which is qualified  under Section  401(k) of the Internal  Revenue
     Code.  All  full-time  employees  over the age of 21 who have been employed
     continuously  for at least one year are eligible for  participation  in the
     Plan. The Company may, but has not elected to,  contribute a portion of its
     profits to the Plan,  as  determined  by the Board of  Directors.  Employer
     contributions  vest ratably over 5 years.  The Company has elected to match
     employee  contributions  to the Plan on a 50% basis but not to exceed 3% of
     the  employee's  annual  compensation.  During fiscal years 1999,  1998 and
     1997, the Company contributed $1,131, $1,117 and $1,098, respectively.  The
     Plan provides for the Company to bear the expense of the  administration of
     the Plan. Pension expense on the foreign plans is not significant.

     On  July  1,  1998,   the  Company's   Board  of  Directors   approved  the
     establishment of the Synthetic Industries, Inc. Supplemental Savings Plan (
     the "SSP"),  a  non-qualified  plan designed to provide highly  compensated
     employees,  as defined by the Internal Revenue Service,  the opportunity to
     defer any portion of their  pre-tax  compensation  that is  ineligible  for
     deferral under the Plan.  Company matching of qualified deferred amounts is
     limited to 3% of a  participant's  compensation  less any  amount  actually
     contributed  by the Company under the Plan.  Vesting under the SSP is based
     upon years of service.  Life insurance  contracts have been purchased which
     may be used to fund the Company's  portion of the SSP. In fiscal 1999,  the
     charge to expense was $97.


14.      EMPLOYEE STOCK PURCHASE PLAN

     On February 25, 1998, the stockholders  approved the Synthetic  Industries,
     Inc.  Employee Stock Purchase Plan (the "Stock Purchase  Plan"),  reserving
     325,000  shares of Common Stock for issuance  under this Plan.  The Company
     adopted the Stock  Purchase Plan with an initial  option period  commencing
     effective  April 1, 1998,  and  continuing in  three-month  option  periods
     thereafter.  The Stock Purchase Plan permits eligible employees to purchase
     Common Stock through payroll  deductions or lump sum  contributions,  which
     may not individually exceed $25 in a calendar year, at a price equal to 85%
     of the Common Stock price as reported by the NASDAQ  National Market at the
     beginning or end of each option  period,  whichever is lower.  At September
     30, 1998 and 1999, the Stock  Purchase Plan had acquired  46,959 and 10,510
     shares, respectively, from the Company's treasury stock.


15. STOCK OPTIONS

     Director's plan

     In August 1994,  the Company  adopted a stock option plan (the  "Director's
     Plan")  pursuant  to which  non-qualified  stock  options  to  purchase  an
     aggregate  of  125,261  shares of Common  Stock  were  granted  to the four
     non-employee  Directors  of the Company at an  exercise  price of $6.83 per
     share which was  determined  by  reference  to the fair market value of the
     Company's  equity at the time such  Directors  joined the Board.  The stock
     options  were  fully  vested as of  October  1, 1996 and have a term  which
     expires on August 4, 2004.  The  Director's  Plan does not  provide for any
     further grants or options thereunder.


     Management plan

     The  Company's  1994  and  1996  Stock  Option  Plans  (collectively,   the
     "Management  Plans") for its key  employees,  provides  for the granting of
     incentive  stock  options  ("ISOs"),  as  provided  in Section  422A of the
     Internal  Revenue  Code,  and  non-qualified  stock  options.  The  maximum
     aggregate  number of shares of Common  Stock  that may be issued  under the
     1994 Plan and the 1996 Plan is 491,413 and 289,062 , respectively.

     Stock option  transactions  during 1999,  1998 and 1997 are  summarized  as
follows:
<TABLE>

                                             Shares
                                          reserved for                   Shares
                                         issuance under   Shares     available for                        Weighted
                                         the Management   granted        grant             Price           average
                                              Plans                                                         price


<S>                                         <C>           <C>           <C>             <C>                 <C>
    Balance at September 30, 1996           905,736       638,397       267,339         $6.83-$10.72        $9.96
        Options granted                                   175,500                     $17.875-$21.375      $18.77
                                               -                           -
    ------------------------------------ -------------- ------------ --------------- ------------------- ------------
    Balance at September 30, 1997           905,736       813,897        91,839        $6.83-$21.375       $11.86
         Options granted                                  80,900               -           $15.00          $15.00
         Options exercised                     -         (12,500)              -           $6.83            $6.83
                                                   -
    ------------------------------------ -------------- ------------ --------------- ------------------- ------------
    Balance at September 30, 1998           905,736       882,297        10,939        $6.83-$21.375       $12.22
         Options granted                            -        7,500             -           $16.50          $16.50
         Options exercised                          -     (13,317)             -        $6.83-$10.72        $7.89
         Options retired                                  (10,632)             -       $10.72-$15.00       $13.54
    ------------------------------------ -------------- ------------ --------------- ------------------- ------------
    Balance at September 30, 1999           905,736       865,848        3,439         $6.83-$21.375       $12.26
</TABLE>

     At September 30, 1999,  757,403 options were exercisable at exercise prices
     ranging from $6.83 to 21.375 per share.

     The purchase  price of the shares of Common Stock  subject to options under
     the  Management  Plans  must be no less than the fair  market  value of the
     Common  Stock at the date of grant;  provided,  however,  that the purchase
     price of shares of Common Stock subject to ISOs granted to any optionee who
     owns shares  possessing  more than 10% of the combined  voting power of the
     Company ("Ten Percent  Shareholder') must not be less than 110% of the fair
     market value of the Common Stock at the date of the grant. The maximum term
     of an option may not  exceed  ten years from the date of the grant,  except
     with respect to ISOs granted to Ten Percent Shareholders, which must expire
     within five years of the date of grant.

     The  Company has elected to  continue  measuring  stock-based  compensation
     using the intrinsic value approach under APB Opinion No. 25 and has adopted
     the  disclosure-only   provision  of  Statement  of  Financial   Accounting
     Standards No. 123, "Accounting for Stock-Based  Compensation" ("SFAS 123").
     Accordingly,  no  compensation  expense has been recognized for the options
     described  above.  Had  compensation  costs for the options been determined
     based on the fair value on the grant date consistent with the provisions of
     SFAS 123, the Company's net income and diluted  income per share would have
     been changed to the following pro forma amounts:
<TABLE>

                                                                          1999             1998           1997
                                                                          ----             ----           ----
<S>                                                                       <C>             <C>             <C>
         Pro forma net income                                             $14,888         $17,640         $6,009
         Pro forma income per share - basic                                  1.72            2.04           0.69
         Pro forma income per share - diluted                                1.66            1.96           0.69
</TABLE>

     The  fair  values  for  the  years  presented  were   determined   using  a
     Black-Scholes  option-pricing  model with the  following  weighted  average
     assumptions:
<TABLE>

                                                      1999               1998                1997
                                                      ----               ----                ----
<S>                                                   <C>             <C>                <C>
      Dividend yield                                  None               None                None
        Volatility                                     44%               64%                  33%
      Risk-free interest rate                         6.0%           5.5% to 6.8%        6.4% to 6.8%
      Expected life                                  4 years           4 years              4 years
</TABLE>

     The weighted average fair value of options granted in fiscal 1999, 1998 and
1997 was $6.95, $8.04 and $10.30, respectively.

     For options outstanding and exercisable at September 30, 1999, the exercise
price ranges and average remaining lives were:
<TABLE>

                                                   Options Outstanding                  Options Exercisable

                                              Weighted Average
                                    Shares           Remaining           Average           Shares          Average
                               Outstanding    Contractual Life          Exercise   Outstanding At   Exercise Price
    Exercise Prices             At 9/30/99                                 Price          9/30/99
<S>   <C>                          <C>                    <C>             <C>             <C>               <C>
      $  6.83                      112,761                5.20            $6.830          112,761           $ 6.83
      $10.72                       496,187                5.60            10.720          452,192            10.72
      $15.00                        73,900                8.80            15.000           30,700            15.00
      $16.50                         7,500                9.25            16.500                -                -
      $17.875                      130,500                7.60            17.875          130,500           17.875
      $21.375                       45,000                7.75            21.375           31,250           21.375

</TABLE>


16. RELATED PARTY TRANSACTIONS

     SI  Management  L.P.  is the  sole  general  partner  of  the  Partnership.
Synthetic  Management  G.P. is the sole general partner of SI Management L.P. By
virtue of these relationships, Synthetic Management G.P. controls the management
and affairs of the  Partnership  and  therefore,  the Company.  At September 30,
1999, the Partnership  owned 5,699,194  shares of Common Stock, or approximately
66% of the issued and  outstanding  shares of Common Stock,  and therefore holds
the voting power to determine the outcome of all matters upon which stockholders
vote.

     The partners of Synthetic  Management  G.P. are the following five Delaware
corporations:   Chill  Investments,   Inc.,  Beckman  Investments,  Inc.,  Freed
Investments,  Inc., Kenner Investments,  Inc. and W.G. Wright Investments,  Inc.
Each of Messrs.  Chill,  Beckman,  Freed, Kenner and Wright is the sole director
and the sole stockholder of one of Synthetic Management G.P.'s partners.

     For further information on the Partnership see Notes 19 and 21.

     A former  executive  officer of the Company and an affiliate of the general
     partner  of the  Partnership,  has been  retained  as a  consultant  to the
     Company.  Pursuant to his consulting agreement with the Company, the former
     executive  officer will  receive,  until  January 31, 2000, or upon earlier
     termination  of  his  consulting  agreement,  $125  per  year  and  various
     insurance  coverages,  and will be authorized to exercise all stock options
     awarded  to him,  subject  to  applicable  vesting  provisions.  Under this
     agreement,  the former executive officer is required to provide the Company
     with 20 hours of consultation  per month, has released the Company from any
     liability  resulting from his employment and has also agreed not to compete
     against the Company.

     The Company  leases  office  space under a five-year  lease with one of the
     Company's executive officers and an affiliate of the general partner of the
     Partnership.  The term of the lease  expires on September  30, 2003 and the
     rent is  approximately  $52 per year,  which the Company believes is within
     prevailing market rates.

     Pursuant to a licensing agreement with the Company, an executive officer of
     the Company and an affiliate of the Partnership, receives royalties related
     to the  manufacture  and sale of a certain  product for which the executive
     officer owns all of the U.S. and foreign patents. Under this agreement, the
     Company paid royalties of approximately $19 and $9 in fiscal 1999 and 1998,
     respectively,  and will  continue to pay such  royalties  until 2012 or the
     earlier termination of the licensing agreement.

     During fiscal 1999 and 1998 the Company paid fees of approximately $211 and
     $125, respectively,  to a law firm in which Mr. Joseph Dana, an officer and
     a director of the Company,  was a member until May 21, 1997.  Effective May
     21, 1997, Mr. Dana became employed as Chief  Operating  Officer and General
     Counsel of the Company.  On August 6, 1999, Mr. Dana was named President of
     the Company.

     During fiscal 1999,  1998 and 1997, the Company paid for expenses  incurred
     by the Partnership in connection with the  Partnership's  (i) proposed plan
     of dissolution  in 1997,  (ii) defense of two putative class and derivative
     action lawsuits resulting from its proposed plan of dissolution,  and (iii)
     dissolution,  liquidation  and winding up of its affairs in connection with
     the settlement of lawsuits.  During fiscal 1999, 1998 and 1997, the Company
     incurred $679, $622 and $1,139, respectively, of such expenses on behalf of
     the  Partnership.  At  September  30,  1999,  1998 and  1997,  the  amounts
     receivable  from the  Partnership  for such  costs  were  $1,342,  $663 and
     $1,800,  respectively.  In May 1998, the Company  acquired 82,056 shares of
     its Common  Stock from the  Partnership  in exchange  for $1,759 of amounts
     receivable from the Partnership,  in partial settlement of expenses paid by
     the Company on behalf of the Partnership  during the last two fiscal years.
     The  shares  were  acquired  at their  fair  market  value  and are held in
     treasury for issuance  under the Employee  Stock  Purchase  Plan.  Upon the
     liquidation  of the  Partnership  in connection  with the  settlement,  the
     Company will be repaid in cash all amounts due from the Partnership.


17.      INDUSTRY SEGMENT INFORMATION

     SFAS No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
     Information,"  was adopted by the  Company in the fourth  quarter of fiscal
     1999. The standard requires  disclosure of segment  information on the same
     basis used internally for evaluating  segment  performance and deciding how
     to  allocate  resources  to  segments.  The  Company  has three  reportable
     operating segments organized by product line: carpet backing,  construction
     materials,  and  technical  textiles.  Major  products by segment  include:
     carpet  backing  (primary and secondary  backing),  construction  materials
     (fabrics  and  fibers  for  use  in   reinforced   concrete   applications,
     geotextiles  and erosion  control)  and  technical  textiles  (fabrics  for
     furniture   and   bedding   construction,    agriculture   and   filtration
     applications).

     The accounting  policies of the segments are the same as those described in
     the summary of  significant  accounting  policies.  The  Company  evaluates
     performance  based on earnings before income taxes.  The Company  allocated
     interest and corporate  overhead based on each segment's total assets.  The
     Company does not transfer products between segments and, therefore,  has no
     intersegment sales.

     The Company has a large and diverse customer base, which includes customers
     located  in  foreign  countries.  Net sales to one  customer  in the carpet
     backing segment represented  approximately 26%, 25% and 20% of consolidated
     net sales for 1999, 1998 and 1997, respectively.

     The Company conducts its foreign sales operations  through  subsidiaries in
     Europe and a network of distributors worldwide. Sales to foreign markets in
     1999, 1998, and 1997 were 10.4%,  9.4% and 10.6% of consolidated net sales,
     respectively.  These sales were  primarily to customers in Canada,  Europe,
     Asia and Latin America. Information for the Company's operations in foreign
     markets is as follows:
<TABLE>

                            Year ended September 30,
<S>                                                       <C>            <C>            <C>
                  Net sales*                              1999           1998           1997
                  United States                            $344,687       $333,996       $308,872
                  Foreign countries                          40,135         35,000         36,700
                                                     =============== ============== ==============
                  Total sales                              $384,822       $368,996       $345,572
                                                     =============== ============== ==============
                  *Net sales are attributed to countries based on location of customer.
</TABLE>

     Because a substantial portion of the Company's foreign revenues are derived
from the sale of U.S. produced products, assets located outside the U.S. are not
material.
<TABLE>



                                                        Carpet       Construction       Technical
                                                       Backing         Materials         Textiles         Total
     1999
<S>                                                      <C>                <C>              <C>           <C>
     Total Segment Sales                                 $172,024           $139,835         $72,963       $384,822
     Earnings Before Taxes1                                17,155              9,004           1,637         27,796

     Interest Expense                                      10,206              5,691           3,729         19,626
     Depreciation and Amortization                         11,608              9,644           3,482         24,734
     Total Assets2                                        227,970            127,885          85,763        441,618
     Expenditures for Long-lived Assets3                   16,959              1,576          13,631         32,166
     ----------------------------------------------- ------------- ------------------ --------------- --------------
     1998
     Total Segment Sales                                 $168,998           $128,318         $71,680       $368,996
     Earnings Before Taxes                                 20,660              7,403           2,010         30,073

     Interest Expense                                       9,627              5,740           3,148         18,515
     Depreciation and Amortization                         10,120              8,111           3,030         21,261
     Total Assets2                                        222,654            132,135          73,570        428,359
     Expenditures for Long-lived Assets3                   13,960             27,926           4,226         46,112
     ----------------------------------------------- ------------- ------------------ --------------- --------------
     1997
     Total Segment Sales                                 $166,219           $114,611         $64,742       $345,572
     Earnings Before Taxes                                 20,490              7,530           2,671         30,691

     Interest Expense                                      11,449              5,021           3,615         20,085
     Depreciation and Amortization                          8,655              6,281           3,300         18,236
     Total Assets2                                        221,498             94,784          67,792        384,074
     Expenditures for Long-lived Assets3                   18,710             24,712          10,558         53,980
     ----------------------------------------------- ------------- ------------------ --------------- --------------
</TABLE>


     1 Earnings  before taxes for  operating  segments  presented  above exclude
     costs associated with the sale process of the Company of $2,726, which have
     not been allocated to the operating segments.

     2 A reconciliation of the total assets reported for the operating  segments
     to the applicable line items on the consolidated financial statements is as
     follows:  Total segment  assets  exclude  $19,662,  $12,155 and $12,517 for
     fiscal  years  ended  1999,   1998  and  1997,   respectively,   consisting
     principally of deferred tax assets,  capitalized  deferred  financing costs
     and systems development costs.

     3 Expenditures for long-lived assets exclude acquisitions of businesses and
sales of assets.


18.      COMMITMENTS AND CONTINGENCIES

     a.  Lease commitments

          On April 7, 1998, the Company entered into an eight-year capital lease
          agreement to finance $7,500 of equipment at 7.25%. On October 4, 1998,
          the Company  entered into an eight-year  capital lease of $5,300 at an
          interest rate of 7.03%. On August 17, 1999, the Company entered into a
          sale-leaseback  transaction whereby the Company sold certain machinery
          and equipment for $12,608 and agreed to lease the assets back from the
          purchaser  over a period of 8 years at a rate of 6.4%.  The  leaseback
          has been  accounted for as an operating  lease and the future  minimum
          lease payments are included below.

          The Company also leases  certain  factory and warehouse  buildings and
          equipment  under  long-term  operating  leases  expiring  periodically
          through 2009.

         Future minimum lease payments under  noncancelable lease obligations at
September 30, 1999:
<TABLE>

                                                                              Capital         Operating
                  Year                                                         leases            leases

<S>               <C>                                                           <C>             <C>
                  2000........................................................  $1,935          $ 8,874
                  2001.....................................................      2,111            6,633
                  2002.....................................................      2,111            5,261
                  2003.......................................................    2,111            3,982
                  2004................................................           2,111            2,686
                  Thereafter.................................................    3,779            6,910
                                                                                ------            -----

                  Total minimum lease payments................................  14,158         $ 34,346
                                                                                ======         ========

                  Less amount representing interest............................  2,942

                  Present value of net minimum lease payments.................  11,216

                  Less current maturities of capital
                      lease obligation.......................................    1,236
                                                                              --------

                  Long-term capital lease obligation............................$9,980
</TABLE>

     Total rental expense for the above  operating  leases and other  short-term
leases for the fiscal years 1999,  1998 and 1997 was $7,163,  $5,813 and $4,112,
respectively.


19. LITIGATION

     The Company and its subsidiaries  are parties to litigation  arising out of
     their business  operations.  Such litigation  primarily involves claims for
     personal injury,  property damage,  breach of contract and claims involving
     employee  relations  and certain  administrative  proceedings.  The Company
     believes such claims are either  adequately  covered by insurance or do not
     involve a risk of material loss to the Company.

     In connection with a dissolution of the Partnership, the Company's majority
     stockholder,  that was proposed in 1997,  the Company,  its  directors  and
     certain  other  of the  Company's  officers  who were  affiliated  with the
     general  partner of the Partnership  (the "General  Partner") were named in
     two putative  class and  derivative  action  lawsuits  filed in  California
     federal court and Delaware state court by certain  limited  partners of the
     Partnership.  On April  16,  1999,  preliminary  approval  of a  settlement
     agreement  in  connection  with these  lawsuits  was  granted by the United
     States District Court for the Northern  District of California.  On May 24,
     1999,  the  settlement  was granted  final  approval  by the United  States
     District  Court for the Northern  District of California and the California
     action was dismissed with prejudice.  On July 31, 1999, the Delaware action
     was dismissed with prejudice by the Delaware Court of Chancery.

     Pursuant to the  settlement  agreement,  an  independent  committee  of the
     Company's  Board of Directors  (the  "Committee")  commenced in June 1999 a
     sales  process  during  which the  Committee,  with the help of a financial
     advisor,  sought offers from qualified  buyers to purchase the Company.  On
     August 31, 1999, in accordance with the terms of the settlement  agreement,
     the  General  Partner  resigned,   which  caused  the  dissolution  of  the
     Partnership, and a liquidating trustee was appointed to wind up the affairs
     of the Partnership in connection with the aforementioned  sales process. On
     November  5, 1999,  at the  conclusion  of the sales  process,  the Company
     entered into an agreement  and plan of merger with SIND  Holdings,  Inc., a
     company organized by Investcorp,  S.A., a global investment group, and SIND
     Acquisition,  Inc.,  a  wholly  owned  subsidiary  of SIND  Holdings,  Inc.
     Pursuant to the merger  agreement,  on November 12, 1999, SIND Acquisition,
     Inc.  commenced  a cash  tender  offer  for all  outstanding  shares of the
     Company's common stock. The Partnership,  which owned  approximately 66% of
     the  outstanding  common stock of the Company,  tendered its shares to SIND
     Acquisition,  Inc.  pursuant to an  agreement  that was entered into at the
     same time as the merger  agreement.  On December 14, 1999,  pursuant to the
     merger agreement , SIND Acquisition, Inc. merged with and into the Company,
     resulting  in the  Company  becoming  a  wholly  owned  subsidiary  of SIND
     Holdings, Inc.

     Acosta and Alvarez Matters

     Prior to March 23,  1999,  approximately  158  plaintiffs  had filed claims
     against Kaufman and Broad Home  Corporation  Including its subsidiaries and
     affiliates  ("Kaufman  and  Broad")  in two  separate  Los  Angeles  County
     Superior  Court  cases (the  "Acosta and  Alvarez  Matters")  each of which
     alleged defects in fiber  reinforced  concrete slabs. On or about March 23,
     1999,  the  Company,  Kaufman and Broad and the  plaintiffs  entered into a
     settlement agreement which resulted in the settlement of all claims against
     Kaufman and Broad.  On April 29,  1999,  the  plaintiffs  in the Acosta and
     Alvarez  Matters  filed  amended  complaints  which  named the Company as a
     defendant in those respective actions and which consolidated the actions in
     connection  with claims  that  Fibermesh(R)  used in concrete  slabs at the
     plaintiffs' homes was defective.  In the amended complaint,  the plaintiffs
     claimed causes of action based upon strict  liability,  fraud,  negligence,
     intentional  infliction  of  emotional  distress,  and  breach  of  implied
     warranty.  In response to a demurrer  filed on behalf of the  Company,  the
     court  dismissed the  intentional  infliction of emotional  distress claim.
     Thereafter,  in July , 1999, the plaintiffs  filed an amended  complaint in
     which  they set out claims for strict  liability,  fraud,  negligence,  and
     breach of express warranty.  In September , 1999, in response to a demurrer
     filed on behalf of the Company,  the court  dismissed the breach of express
     warranty claim.

     Extensive  sampling  and  testing is being done on behalf of the Company of
     all  homes  involved  in this  litigation.  That  testing  has  shown  that
     approximately  forty of the plaintiffs do not have any  Fibermesh(R) in the
     concrete which was used in connection in the  construction  of their homes.
     The  Company  anticipates  these  plaintiffs  will be  dismissed  from  the
     lawsuit.  After the  sampling is  completed,  off site testing will be done
     which will assist in determining the cause of any  construction  defects in
     the concrete in the  plaintiffs'  homes.  Minimal  discovery  has been done
     pending the  completion  of sampling and testing at the  plaintiffs  homes.
     Depositions of the plaintiffs will begin in late January,  2000. Therefore,
     it is  too  early  to  predict  the  outcome  of  these  cases  except  for
     approximately   forty  plaintiffs  who  the  Company  anticipates  will  be
     dismissed because the concrete in their homes did not contain Fibermesh(R).
     The  Company  intends  to  vigorously  defend  against  all  claims  by the
     plaintiffs in these matters.

     Hicks Matter

     On October 1, 1998, three  individuals  filed a lawsuit against Kaufman and
     Broad in Los  Angeles  County  Superior  Court  (the  "Hicks  Matter")  and
     requested  that the court  grant class  action  status to the  lawsuit.  In
     response  to the  complaint,  Kaufman  and  Broad  denied  the  plaintiffs'
     allegations and filed a  cross-complaint  against the Company.  The Company
     has answered the Kaufman and Broad cross-complaint and denied generally and
     specifically the allegations that Kaufman and Broad had been injured or was
     entitled  to any relief by any  reason,  act or omission by or on behalf of
     the Company.  Subsequently, at a hearing which as held on November 8, 1999,
     the court  announced that it would deny class action  certification  to the
     complaint and dismiss all class action  claims in this case.  The effect of
     this ruling is to leave three  plaintiffs in this litigation  involving two
     homes.  Based on the limited discovery which has been done as of this time,
     it  appears  that  there  are no  personal  injury  claims on behalf of the
     plaintiffs and that their property  damage claims are limited.  While it is
     too early to predict  the  outcome  of this case,  if there were an adverse
     outcome,  it would not have a material  effect on the Company's  results of
     operations or financial condition. The Company intends to vigorously defend
     against all claims by the plaintiffs in this matter.






20.      QUARTERLY FINANCIAL DATA (UNAUDITED)

     Presented  below  is a  summary  of the  unaudited  consolidated  quarterly
     financial information for the Partnership for the years ended September 30,
     1999 and 1998:
<TABLE>

                                                                                                  Three Months Ended
     Fiscal 1999                                    December 31       March 31         June 30        September 30
     -----------                                    -----------       --------         -------        ------------
<S>                                                       <C>              <C>            <C>               <C>
     Net sales                                            $87,162          $84,525        $103,976          $109,159
     Operating income1                                      6,640            6,579          16,245            15,357
     Net income                                               520              454           4,801             3,676
     Income per limited partnership unit                      645              559           5,945             4,545
     Weighted average limited  partnership units              800              800             800               800
     outstanding

     Fiscal 1998
     Net sales                                            $76,581          $79,271        $104,531          $108,613
     Operating income                                       7,034            6,788          17,730            17,143
     Net income                                               710              647           5,122             4,950
     Income per limited partnership unit                      879              801           6,339             6,124
     Weighted average limited  partnership units              800              800             800               800
     outstanding

</TABLE>

     1 Operating  income by quarter for fiscal 1999 include  pre-tax charges for
     plant  consolidation  costs and other  charges  relating to the sale of the
     Company as follows:  Quarter ended December 31, 1998, $1,619; quarter ended
     March 31, 1999,  $1,761;  quarter  ended June 30, 1999,  $920;  and quarter
     ended September 30, 1999, $2,726.


21. SUBSEQUENT EVENT

     On November 5, 1999 the  Partnership  entered into a Stockholder  Agreement
     with SIND  Holdings,  Inc.,  a company  organized by  Investcorp,  a global
     investment group, and SIND Acquisition,  Inc., a wholly-owned subsidiary of
     SIND Holdings,  Inc. (SIND Holdings and SIND  Acquisition  being  hereafter
     referred to as the "Purchasers"). Pursuant to the Stockholder Agreement the
     Partnership  agreed  to tender  all of the  shares  of  common  stock  (the
     "Shares") it owned in Synthetic  Industries,  Inc.  (the  "Company") to the
     Purchasers  pursuant  to  a  cash  tender  offer  that  would  be  made  to
     stockholders  of the Company in accordance with a Merger  Agreement,  dated
     November 5, 1999,  between the Purchasers and the Company.  The cash tender
     offer was  commenced  on November 12, 1999,  the  Partnership  tendered the
     Shares and on December  15,  1999 the  Partnership  received  approximately
     $188,000  in cash  in  payment  for the  Shares.  The  Liquidating  Trustee
     promptly invested these proceeds in U.S. Treasury Bills, which now comprise
     all of the assets of the Partnership.

     Pursuant to the  Stipulation  and Agreement of  Settlement  approved by the
     United  States  District  Court for the Northern  District of California to
     which  the  Partnership  is  subject,  the  Liquidating  Trustee  has  made
     application to the Court to make a cash distribution to the partners of the
     Partnership and has sent Payment  Direction Letters to all limited partners
     of the  Partnership.  Upon  approval by the Court and return of the Payment
     Direction Letters,  the Liquidating  Trustee intends to distribute $160,000
     in cash in accordance  with the terms governing  liquidating  distributions
     set forth in the Partnership Agreement.  The remainder of the cash now held
     by the Partnership in U.S.  Treasury Bills will be retained in that form by
     the Liquidation  Trustee pending  satisfaction of all of the  Partnership's
     liabilities,  including, without limitation, the attorneys' fees payable to
     plaintiff's  counsel  in  the  litigation  that  was  the  subject  of  the
     Stipulation  and Agreement of  Settlement,  amounts owed to the Company and
     the incidental  expenses and  liabilities  incurred in connection  with the
     liquidation. On December 30, 1999, the United States District Court for the
     Northern District of California awarded $6,839 in fees and $237 in expenses
     to plaintiff's  counsel,  and directed an additional $13, 678 to be held in
     reserve  by the  Liquidating  Trustee,  subject  to the  exhaustion  of any
     appeals or further  court  order.  In addition,  at December 30, 1999,  the
     Partnership  owed the Company $1,396  incurred in connection  with plans of
     dissolution that were not consummated. The Liquidating Trustee expects that
     all  liabilities  of the  Partnership  will not exceed the amount of assets
     retained  by  the  Partnership.   The  Liquidating   Trustee  can  give  no
     assurances,  however,  as to when and what  amount of the  reserve  will be
     released by the Court, and, therefore, no prediction can be made as to when
     and in what amount a final liquidating distribution of the Partnership will
     be made.



                                       SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

SYNTHETIC INDUSTRIES L.P.


By:  SI MANAGEMENT L.P.
           General Partner

By:  SYNTHETIC MANAGEMENT G.P.
           General Partner

By: CHILL INVESTMENTS, INC.
          Managing General Partner

By: /s/ Leonard Chill
     Leonard Chill                        Chief Executive Officer
Date: January 13, 1999

By: /s/ Joseph Sinicropi                 Secretary and Chief Financial Officer
Dated:   January 13, 1999          (Principal Financial and Accounting Officer)