1.  Preference Shares:
 
 22,260,000 Preference Shares aggregating to Rs.222,600,000 issued to
 M/s. Zwirn Pragati Capfin Pvt Ltd., (now known as Asia Pragati Capfin
 Private Limited) was to have been redeemed on 31st December 2009 at par
 value. However due to the financial position of the company, these
 preference shares have not been redeemed. The Company has received a 
 communication dated 6th April 2011 from M/s. Asia Pragati Capfin Private 
 Limited intimating the company of the default and calling upon the 
 company to cure the event of default.
 
 2.  Corporate Debt Restructuring (C D R):
 
 The Company had approached the Corporate Debt Restructuring Cell in
 July 2010 for restructuring of the Debts of the company. The Companys
 request was considered in the CDR Empowered Group and the CDR Package
 was approved in September 2010. The Banks Associated with this CDR
 Package have given their individual approvals. The Salient Features of
 the CDR Package are:
 
 (a) The cut-off date is reckoned as 31 st March 2010
 
 (b) Holding on operations will be allowed till the CDR package is
 implemented
 
 (c) Individual Lenders with exposure less than Rs. 1 crore will have
 the option of exiting at a discount of 40%
 
 (d) Principal payment moratorium upto 30.09.2011 for Term Loans and
 repayment in 72 monthly installments commencing from 01.10.2011
 
 (e) Term Loans to carry ballooning interest rate varying between 7% and
 16.5%
 
 (f) Interest on Term Loans upto 30.09.2011 to be funded through FITL
 
 (g) The irregular portion of the Working Capital amounting to Rs.
 5928.35 lacs would be converted into 9% Optionally Convertible
 Cumulative Redeemable Preference Shares (OCCRPS) (70%) and Working
 capital Term Loans (WCTL) (30%).
 
 (h) The OCCRPS shall be redeemed in 4 equal installments starting from
 2013-14 with a premium of 3%
 
 (i) The WCTL shall be repaid in 72 monthly installments.
 
 (j) The lenders shall extend additional limits to the tune of Rs.
 1664.14 lacs
 
 (k) The promoters will have to bring additional contribution of Rs. 17
 crores over the next 5 years.
 
 Based on the Letter of Approval, the Master Restructuring Agreement (M
 R A) has been signed by the
 
 Consortium Banks.
 
 The Company would get the following benefits:
 
 Particulars                     Rs in Lakhs
 
 Reduction in interest            316.08
 
 Conversion of irregular portion 
 of the working capital to Preference
 Shares                          4149.85
 
 Capital,Infusion by Promoters 
 over the next 5 years           1700.00
 
 Additional Credit from the 
 Consortium Banks                1800.00
 
 With the CDR Proposal fully implemented and put through effectively the
 Net worth of the company is expected to improve and become positive.
 
 3.  Reduction in interest consequent to adoption of approved CDR
 package
 
 As per the Corporate Debt Restructuring package approved by the
 consortium banks the Company is entitled for a reduction in the
 interest rates on the outstanding amounts as on 01st July, 2010
 compared to the rates generally charged by the respective banks on the
 approved financial facilities extended by each of them. The
 
 Company had serviced the interest upto 30th June 2010 and due to this
 interest reduction the company has saved Rs.767.40 Lakhs in the
 interest charges debited to the Profit and Loss account for the period
 (July 2010 to March 2011).
 
 4.  Secured Advances
 
 tSecured advances include an amount of Rs.720.02 lakhs due from
 Dhandapani Properties Private Limited for which necessary full
 provision has been made in the accounts during the year. The Security
 being land for which the title is in dispute with the Government of
 Karnataka, necessary steps are being taken by the company to regularize
 the same.
 
 EXTRA ORDINARY ITEMS
 
 5.  One time Settlements
 
 a.  State bank of India:
 
 Asia Pragati Capfin Private Limited had settled the loan of Rs. 10
 crores to State bank of India. State Bank of India had approved a loan
 of Rs. 12 crores to the Company. In the settlement of Rs 10 crores to
 SBI after adjusting the interest Rs 833.41 lakhs is taken to profit &
 Loss account, being the reduction in the liability.
 
 b.  Bank of Baroda:
 
 tAs per the approved package of the CDR the lenders whose outstanding
 is less than Rs. 1-00 lakhs on IstApril can opt to settle the amount at
 a discount of 40%. On moving he matter with BANK OF BARODA against the
 outstanding amount of Rs. 14.79 lakhs the company settled Rs, 9.22
 lakhs leaving Rs. 5.58 lakhs transferred to Profit & Loss account
 
 c.  HSBC
 
 The Company moved HSBC for one time settlement as per the mutual
 agreement reached against the outstanding as per books of Rs 937.80
 lakhs the Company settled Rs. 187.56 lakhs leaving Rs. 750.24 lakhs
 transfer to Profit & Loss account .
 
 6.  Loans and Advances:
 
 Loans and Advances includes Rs. 204.70 Lacs on account of Managerial
 Remuneration for which the Approval are awaited.
 
 7.  Deposit account
 
 The total deposit with bank as 6n 31.03.2011 includes Rs. 5.30 Lakhs
 towards deposits maintained for unclaimed dividend. As on 31.03.2011,
 there are no amounts outstanding to be transferred to Investor
 Protection Fund.
 
 8.  Deferred Tax Assets / liability Rs. in Lakhs
 
 Particulars                                      3I.03.20H 30.09.2009
 
 Opening Balance                                        NIL NIL
 
 Less Reversal of Deferred tax asset                    NIL NIL
 
 Add: Liability on account of depreciation              NIL NIL
 
 Total                                                  NIL NIL
 
 Deferred tax asset arising on account of carry forward loss and
 provisions has not been recognized in the books of accounts on a
 conservative basis.
 
 9.  Assignment:
 
 During the period under review, the Company has terminated the
 agreement with M/s Fullerton which involved the assignment of the
 assets / receivables .
 
 10.  (A) Remuneration to Managing Director
 
 a.  (Period - 1.10.2009 - 31.03.2010)                   Rs. In Lakhs
 
 
                                                31.03.2011 30.09.2009
 
 Salary                                              12.00 23.75
 
 House Rent allowance                                 3.60 7.06
 
 Companys Contribution to PF                         1.44 2.85
 
 Others                                              12.21 23.71
  
 Total                                               29.25 57.37
 
 b. The re-appointment and increase in remuneration of the Managing
 Director as approved by the Board of Directors in their meeting held on
 17.04.2010 was placed before the shareholders through Postal Ballot on
 the 18th December 2010 and since it was not passed the company is
 taking appropriate actions in this direction. The amount for the period
 1.4.2010 to 31.03.2011 is shown under Advances.
 
 (B) Remuneration to Whole Time Director (Period - 14.02.2011 -
 31.03.2011)
 
                                                            Rs. In Lakhs
 
 
                                               31.03.2011   30.09.2009
 
 Salary                                             1.20     Nil
 
 House Rent allowance                               0.60     Nil
 
 Companys Contribution to PF                       0.14     Nil
 
 Others                                             1.21     Nil
 
 Total                                              3.15     Nil
 
 The remuneration of the whole time director has been approved by the
 Board of Directors in their meeting held on 3rd March 2011, and by
 shareholders through the postal ballot where the results were
 pronounced on 20.05.2011
 
 Determination of net profits in accordance with Sec 349 of the
 Companies Act. 1956 for remuneration
 
 payable to Directors
 
 Rs. In Lakhs Loss before tax as per Profit & Loss Account   (2142.78)
 
 Add: Directors remuneration charged in the accounts            32.40
 
 Net loss                                                    (2110.38)
 
 11.  Earnings per share                                  Rs. In Lakhs
 
 Profit after tax excluding extra ordinary item              (3732.02)
 
 Weighted average number of equity shares                     5954320
 
 Earnings after tax (Basic)                                    (62.68)
 
 Face value per share                                           10.00
 
 12.  Contingent Liability:
 
 Disputed Income tax demand of Rs.451.60 lakhs together with interest
 pending in appeal/representation before various income tax authorities
 for the Assessment years 1997-98 to 2007-08
 
 13.  The Company is engaged primarily in the business of financing and
 accordingly there are no separate reportable segments as per Accounting
 Standard 17.
 
 14.  Previous years figures have been regrouped / reclassified to
 conform to current periods classification wherever necessary.