Right, Preferences and Restriction attached to shares
 
 Equity shares
 
 The company has only one class of Equity having a par value Rs. 10.00
 per share. Each shareholder is eligible for one vote per share held.
 The dividend proposed by the board of directors is subject to the
 approval of the shareholders in ensuing Annual General Meeting, except
 in case of interim dividend. In the event of liquidation, the Equity
 shareholders are eligible to receive the remaining assets of the
 company after distribution of all preferential amounts, in proportion
 to their shareholding.
 
 Preference shares
 
 The company has only one class of Preference having a par value Rs.
 10.00 per share. Each shareholder is eligible for one vote per share
 held. The dividend proposed by the board of directors is subject to the
 approval of the shareholders in ensuing Annual General Meeting, except
 in case of interim dividend. In the event of liquidation, the
 Preference shareholders are eligible to receive the remaining assets of
 the company after distribution of all preferential amounts, in
 proportion to their shareholding.
 
 1.  Share Capital
 
 The 14.5% Cumulative Redeemable Preference Shares of Rs. 350 Lacs
 redeemed at par in 3 annual installments commencing from February 1,
 2005, installment failing due on February 2005 is in arrear. The
 subscribers reserve the right to convert CRPS assistance into rupee
 term loan after one event of default with respect to payment of
 dividend/ redemption and/or into Equity shares at par after two
 consecutive defaults with respect to payment of dividend/redemption.
 Payment of dividends on these shares is in arrears since 01.04.1999.
 
 2.  Secured Loans
 
 a) The company''s debts from banks/IDBI had been restructured involving
 carving out of working capital term loans (WCTLs) from the existing
 working capital limits, reduction in interest rates, waiver of
 liquidated damages/ penal interest etc., funding of interest and
 reschedulement of term loans under the Corporate debt restructuring
 (CDR) mechanism of the Reserve bank of India. However it could not be
 implemented.
 
 b) Foreign currency Loan and Rupee Term Loans (other than Working
 capital term loans interest term loan) from State Bank of India*, IDBI
 and State Bank of Indore* are secured by first charge ranking pari
 passu by way of mortgage/hypothecation of the fixed assets (excluding
 assets acquired under hire purchase agreements) of the Company at
 Pithampur and pologround, Indore. Working capital term loans and funded
 interest term loans from State Bank of India*, State Bank of Indore*,
 Canara Bank and State Bank of Saurashtra* and funded interest term loan
 from Industrial Development Bank of India are secured by pari passu
 charge on the assets of the Company.
 
 c) Working Capital Limits from State Bank of India*, State Bank of
 Indore*, Canara Bank and State Bank of Saurashtra* are secured by
 second charge ranking pari passu by way of Mortgage/ Hypothecation of
 the fixed assets of the Company at Pithampur and pologround, Indore.
 
 *Standard Chartered Bank has takeover account of State Bank of India,
 State Bank of Indore and State Bank of Saurashtra and Kotak Mahindra
 Bank Ltd. has takeover account of IDBI.
 
 d) All the above loans are further secured by way of personal
 guarantees of Managing Director, one director and others.
 
 e) Sales tax deferred is secured by first available charge by way of
 hypothecation of the fixed assets of the Company.
 
 3. Contingent Liabilities
 
 
                                                    (Rs. in Lacs)
 S.No.  Particulars                           2012         2011
 
 a.     Guarantees issued by bankers           2.00          2.00
 
 b.     Lease rent payable over the           17.55         17.55 
        unexpired portion of the lease
        agreements on leased Plant & 
        Machinery
 
 c.     Income Tax in respect of which the     7.40          7.40 
        company is in appeal
 
 d.     Excise Duty in respect of which       18.28         18.28 
        the company is in appeal
 
 e.     Cumulative Preference Dividend       555.5         555.5 
       (to become payable when the
        dividend would be declared)
 
 f.     Damerages for delayed payment of       9.72          9.72 
        Provident Fund in respect of which
        company is in appeal
 
 
 
 *The investments being long term investments are valued at cost of
 acquisition.  Accordingly, no provision is made for temporary
 diminution in value of such investments to the tune of Rs. 469187.
 There is no market value of these investments and as per Accounting
 Standard (AS) 13 Accounting for Investments it should be shown at
 market value.
 
 4.  Information related to Related Parties has not been produced before
 us.
 
 5. Sales and Purchases include inter –division transfer of yarn and
 waste material of Rs is Nil
 
 6. As per Accounting Standard (AS) 5 Net profit or loss for the prior
 period items and changes in accounting policies Prior period expenses
 of Rs.  NIL
 
 7. Accounting Standard (AS) 17 Segment Reporting is not applicable as
 the company operates in a single segment Textiles
 
 8. As per Accounting Standard (AS) 22 Accounting for Taxes on Income.
 The deferred tax assets have, however not been recognized and carried
 forward in the absence of a reasonable or virtual certainty that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realized.
 
 9.  In view of insufficient information from the suppliers regarding
 their status as SSI unit, amount overdue to them as on 31.03.12 cannot
 be ascertained.
 
 10.  The Company has not transferred the amount of Unclaimed Dividend
 to Investor Education and Protection Fund established under sub-section
 (1) of section 205C of the Companies Act, 1956 and the same is shown
 under the head of current liabilities.
 
 11.  Balances of Bank, Debtors, Creditors and Loans & Advances are as
 per books of accounts and subject to confirmation.
 
 12.  The financial statements of the company are prepared on the basis
 of Going concern (Yarn Division) and its textile (Fabric) division is
 closed.
 
 13.  Interest on secured loan from banks and financial institution is
 provided on suomoto estimated basis for Rs.27,63,19,897/-. (Previous
 year Rs.  24,44,66,965).
 
 14.  No provision for Income tax has been made due to accumulated
 business losses and unabsorbed depreciation as per the Income Tax Act
 1961.
 
 15.  Figures have been rounded to the nearest rupee.
 
 16.  Previous year figures have been regrouped, reworked, rearranged
 and reclassified wherever necessary.
 
 17.  Schedules A to O are under the same signatures as Balance
 Sheet.