1.  Contingent Liabilities Not Provided For;
 
 a) Estimated amount of contracts remaining to be executed on capital
 account of Rs. 21.03,731 (Rs. 42,85,579) advances paid X 2,63,736 (Rs.
 3,80,920).
 
 b) Income tax demands disputed in Appeals Rs. 63,50,331 {Rs. 75,23,958)
 against which amount deposited Rs. 63,50,331 (Rs. 75,23,958).
 
 c) Entry Tax demands for FY (1997-98) disputed in Appeals Rs. 5,76,968 (Rs.
 5,76,968 ) against which amount deposited Rs. 1,66,000 (Rs. 1,66,000) in
 2001 and 2003.
 
 d) Central Excise Duty demands disputed in Appeals Rs. 1,71,151 (Rs.
 1,71,151) against which amount deposited Rs. Nil (Rs. Nil).
 
 2 a) In compliance with the CDR scheme, the Promoters of the Company
 has brought Rs. 1 Crore as advance which is deposited in an Escrow
 Account. This amount shall be allowed to be refunded by the Company to
 the Promoter in case a strategic investor is inducted resulting in
 change in the present management.  b) Considering the future market
 potential of Polyester Viscose blended textile barring any unforeseen
 circumstances, the management is confident that after implementation of
 the CDR scheme, the Company would be able to generate sufficient
 returns to make its net worth positive in future. In view of the order
 of the Hon''ble High Court of Judicature, Indore bench allowing the
 closure of Birgod Unit and thereby settling the labour disputes
 relating to the closure of the said unit and payment of labour dues and
 transfer of Spindles alongwith balancing machinery from Birgod unit to
 Pillukhedi unit. The Company is of the view that the Going Concern
 Assumption is still in existence. Accordingly, the accounts of the
 Company are prepared on Going Concern basis.
 
 3.  Corporate Debt Restructuring Scheme:
 
 a) As per the Approved Restructuring Scheme, the interest on Term Loans
 and Working Capital Term Loans is payable at the rate of 9 % p.a.
 payable monthly. The scheme has funded the interest on these loans from
 April 1, 2004 to June 30, 2006. These loans were repayable, as per the
 proportion specified in the scheme, in 24 quarterly installments
 commencing from December 15, 2006.
 
 b) As per Schedule of repayment of the loan a sum of Rs. 7,87,79,485 (Rs.
 7,87,79,485) was payable during the current year out of which Rs.
 3,58,10,995 (Rs. 3,58,10,995) was payable to banks other than ARCIL. Out
 of the above loans payable to banks other than ARCIL during the current
 year has paid X Nil (Rs. Nil) and remaining amount of Rs. 3,58,10,995 (Rs.
 3,58,10,995) is still unpaid. Out of the outstanding dues of loan
 payable to banks other than ARCIL as on April 1, 2011 of Rs. 11,54,43,971
 is still unpaid. Further, the interest which became payable to banks
 other than ARCIL for the current year was Rs. 2,60,84,253 (Rs.
 2,94,27,583). The outstanding interest dues as on April 1,2011 ofRs.
 8,19,08,994 is still unpaid.
 
 As regards payment to ARCIL, loan of Rs. 4,29,68,490 (Rs. 4,29,68,490) and
 interest of Rs. 3,49,66,366 (Rs. 3,24,54,793) was payable during the
 current year and the outstanding dues of loan and interest as on April
 1, 2011 was Rs. 15,84,58,865 and Rs. 13,73,32,411 respectively.
 
 c) in the event of default for compliance of the Restructuring Scheme,
 the lenders have the right to convert 100% of the debt into equity, at
 par, during the tenure of the assistances on default.
 
 4.  Production of one of the units of the Company at Birgod was
 discontinued on October 10, 2003 due to Industrial relation problem.
 The Hon''ble High Court of Judicature, Indore bench vide its order dated
 March 31, 2008 has allowed the closure of the Birgod unit and directed
 the Company to pay workmen compensation in terms of Section 25(0) of
 the Industrial Dispute Act, 1947. The Company has taken a loan from
 Bank of India and has paid the said dues as per the instructions of the
 Hon''ble High Court, Judicature, Indore Bench and accordingly the Birgod
 Unit has been closed down.
 
 Out of the total net block of assets of Rs. 12,67,26,930 held at Birgod
 unit, the Company has transferred assets of Rs. 5,30,01,477 to its
 Pillukhedi unit and assets worth Rs. 6,06,167 will be transferred to
 Pillukhedi unit.
 
 As per the decision Asset Sale Committee of lenders, the surplus assets
 worth Rs. 1,94,51,407 of Birgod unit have been disposed off through
 e-auction by MSTC Ltd. During the year and balance assets worth Rs.
 5,36,67,879 are held for disposal and no depreciation has been claimed
 on the same.
 
 5.  Provision for Gratuity and Leave Encashment;
 
 Accounting Standard-15 (AS-15) on Employees Benefits [AS-15
 (Revised)] requires an enterprise to recognize its obligation and
 employee benefits cost under defined benefit plans such as gratuity and
 compensated absences, based on an actuarial valuation. The obligation
 and employee benefits cost are to be reflected in the Balance Sheet and
 Profit and Loss Account, respectively.
 
 As regards Gratuity, the Company is under the Employee Group Gratuity
 Scheme of the Life Insurance Corporation of India (LIC) and as per
 LIC''s renewal intimation, the Company has contributed a sum of Rs.
 25,71,545. However, since the Company does not have a certificate
 either from LIC or any other source to the effect that the
 contribution so made has been worked out by a qualified actuary in
 accordance with the provisions of AS-15 (Revised), the contribution so
 made is charged to the Profit and Loss Account. However, as per the
 calculations made by the Company, the funds available with LIC is
 adequate to meet the Company''s Gratuity liability as on the date of the
 Balance Sheet.
 
 As regards Compensated Absences, the Company has determined the
 liability for the leave at the credit of its employees on the basis of
 their current salaries and made a provision for such a liability.
 Accordingly, a provision of Rs. 7,21,679 has been made during the year
 and the accumulated balance as on March 31, 2012 is 7 12,74,283 on the
 aforesaid basis (without an actuarial valuation) in respect of the
 aggregate leave at the credit of its employees. However, since the
 Company does not have a certificate from an independent actuary to the
 effect that the provision so made has been worked .  out by a qualified
 actuary in accordance with the provisions of AS-15 (Revised), the
 provision so made is charged to the Profit and Loss Account.
 Accordingly, in respect of liability for leave at the credit of
 employees, the Company is not in a position to determine its liability
 and charge the same to the Profit & Loss Account in conformity of AS
 -15 (Revised).
 
 In the absence of availability of the detailed information for
 determining the liabilities for Gratuity and Compensated Absences in
 terms of AS-15 (Revised), the disclosures regarding reconciliation of
 obligation, fair value of plan assets, actuarial assumptions, etc. as
 required in terms of AS-15 (Revised) have also not been made.
 
 6.  The Company''s operation relate only to Synthetic Blended Yarn and
 thus has only one reportable segment under Accounting Standard-17 on
 Segment Reporting.
 
 7.  In terms of Para 17 of Accounting Standard-22 (AS-22) on
 Accounting for Taxes on Income read with Accounting Standard
 Interpretation 9 (ASI 9) issued there under, in absence of virtual
 certainty the Company has not recognized Deferred Tax Assets in respect
 of carry forward losses Rs. 36,38,07,661 including unabsorbed
 depreciation Rs. 26,43,36,749 and in terms of Para 15, the Company has
 not recognized Deferred Tax Assets in respect of other items in absence
 of reasonable certainty.
 
 8.  No provision for taxation is made in view of brought forward
 business losses and unabsorbed depreciation of earlier years & in view
 of current year loss.
 
 9.  For the purpose of ascertaining impairment of assets as per
 Accounting Standard-28 Impairment of Assets, the entire business
 operation of the Company have been considered as a cash generation unit
 (CGU) and the recoverable amount of the CGU is determined on the basis
 of its value in use. In view of the pending implementation of
 restructuring scheme, as approved under CDR, involving proper balancing
 of Machines, it is expected that CGU shall take longer period to
 generate regular future economic benefits. Thereby cash flows for 8
 years have been taken in to account to assess value in use of the
 business operation. On the basis of comparing the value in use so
 arrived at, with the carrying value of the entire CGU, it was noticed
 that there is no impairment in CGU.
 
 Further, Company has carried out the valuation of surplus assets of
 Birgod Unit, and as per the valuation report, the Net Realizable Value
 (NRV) of the assets is more than the carrying amount of the assets. On
 the basis of the above valuation report, management is of the view that
 NRV of the assets of Birgod unit will be more than the carrying amount
 of such assets.
 
 10.  Unpaid amounts overdue for more than thirty days to Micro, Small
 and Medium Enterprise Suppliers on account of principal together with
 interest is Rs. Nil (Previous year Rs. Nil). This disclosure is on the
 basis of the information available with the Company regarding the
 status of the suppliers as defined under The Micro, Small and Medium
 Enterprises Development Act, 2006.
 
 11.  The previous year''s figures, wherever necessary, have been
 regrouped, reclassified and recast to confirm with this years
 classification.