1.  i: CONTINGENT LIABILITIES NOT PROVIDED FOR:
 
 A.  Letter of credit: Letter of Credit issued by Bank on behalf of the
 Company Rs. 3345.71 Lacs (P.Y. Rs. 2016.74 Lacs) these are covered by
 the Charge created in favour of the Company''s Bankers by way of
 Hypothecation of Stocks, Receivable & Machineries/Assets of the
 Company.
 
 B.  Guarantees: Bank Guarantees issued by Banks on behalf of the
 Company Rs. 361.69 Lacs (P. Y. Rs. 345.79 Lacs). These are secured by
 the charge created in favour of the Company''s bankers by way of pledge
 of Fixed Deposit Receipts.
 
 C.  The claim against Company not acknowledged as debt, comprises of
 excise duty & Customs duty disputed by company relating to issue of
 applicability and classification aggregating to Rs. 1,891.72 Lacs ( P.
 Y. Rs. 1,845.23 Lacs).
 
 D.  Bill discounted not matured Rs. 1,022.50 Lacs ( P. Y. Rs. 1,073.45
 Lacs).
 
 The contingent liabilities in respect of Bank Guarantees and other
 matters arising in the ordinary course of business from which it is
 anticipated that no material liabilities will arise.
 
 E.  CST liability in respect of invoice amount of Rs. 2,518.59 Lacs (
 P. Y. Rs. 1,559.08 Lacs) for which C-Form are yet to be collected from
 the customers.
 
 F.  Liability of Income Tax with respect to which appeal is pending
 before ITAT amounting to Rs. 13.17 Lacs for A.Y 2003-04 and appeals
 pending before CIT Appeal for Rs. 9.93 Lacs for A.Y. 2007-08, Rs. 30.56
 Lacs for A.Y.  2008-09 and Rs. 6.28 Lacs for A.Y. 2009-10.
 
 2.  ii: Estimated amount of contracts remained to be executed on
 capital account net of advance at the end of the year Rs. 59.91 Lacs (
 P. Y. Rs. 47.17 Lacs)
 
 3.  DEPRECIATION:
 
 A: The depreciation for the year has been provided on “straight line
 method” as per Section 205 (2) of the Companies Act, 1956 at the rates
 prescribed in Schedule XIV thereto.
 
 B: Depreciation on additions/disposals of the fixed assets during the
 year is provided on pro rata basic according to the period during which
 assets are put to use.
 
 C: Intangible assets in represents the cost of computer software
 acquired for internal use, to be amortised equally over five years
 based upon their estimated useful lives.
 
 4.  A: The Company has invested USD 4,35,000 equivalent to Rs. 183.22
 Lacs for 100% share being 4,35,000 shares of Sarla Overseas Holding
 Limited registered at British Virgin Islands as a result the said
 company is Wholly Owned Subsidiary of the Company.
 
 B: No provision is made for the interest of Rs. 7.24 Lacs for Unsecured
 Loan given to Sarla Overseas Holdings Limited, a wholly owned
 subsidiary of the Company.  Hence profit of the current year is
 understated to this extent.
 
 5.  Managing Director''s remuneration is Rs.  30.00 Lacs (P.Y Rs. 30.00
 lacs) & the whole time Director''s remuneration is Rs.  27.00 Lacs (
 P.Y. Rs. 20.00 lacs) is in accordance with Section 198 Schedule XIII of
 the Companies Act, 1956.
 
 6.  TAXATION:
 
 A: Provision for taxation for the current year has been made, taking
 into consideration benefits admissible under the provisions of the
 Income Tax Act, 1961.
 
 B: In accordance with AS-22 issued by the Institute of chartered
 Accountants of India on ''Accounting of Taxes on Income'' net deferred
 tax expenses on account of timing difference for current year is Rs.
 269.12 Lacs (P.Y. Rs. 70.20 Lacs) which is charged to profit and loss
 account.
 
 7. RELATED PARTY TRANSACTIONS:
 
 The Company has transactions with following related parties:
 
 1) Associates
 
 a) M/s. Satidham Industries Pvt. Ltd.
 
 b) M/s. Sarla Estate Developers Pvt. Ltd.
 
 c) M/s. Hindustan Cotton Co.
 
 d) M/s. Shivchandrai Jhunjhunwala & Co.
 
 e) M/s. Harmony Estates Pvt. Ltd.
 
 2) Key Management Personnel
 
 a) Madhusudan Jhunjhunwala - Chairman
 
 b) Krishna Jhunjhunwala - Managing Director
 
 3) Joint Ventures of Subsidiary Company
 
 a) Savitex SA De C. V. , Honduros
 
 b) MRK SA De C.V., Honduras
 
 c) Sarla Tekstil Filament Sanayi Ticaret A.S.
 
 4) Subsidiary Companies
 
 a) M/s. Sarla Overseas Holding Ltd. (SOHL)
 
 b) M/s. Sarla Europe, Lda held through SOHL
 
 8.  SEGMENT REPORTING:
 
 a) Information about Primary Business Segment:
 
 Based on the guiding principles given in the Accounting Standards on
 Segment Reporting (AS-17) the Company is primarily in the business of
 manufacturing and processing of synthetic yarn which mainly having
 similar risk and returns the Company has diversified its activities
 into Wind Power Generation, hence the company''s business activity now
 fails under two business segments, viz
 
 (i) Manufacturing of Yarn and (ii) Generation of Wind Power.
 
 b) Information about Secondary Geographical Segment:
 
 The secondary segment is based on geographical demarcation i.e. in
 India and out side India.
 
 9.  DISCLOSURE IN ACCORDANCE WITH REVISED AS - 15 ON “EMPLOYEE
 BENEFITS”
 
 A) Defined Contribution Plans:
 
 The Company has recognised the following amounts in the profit and loss
 account for the year
 
 10. Company does not have complete information to determine Micro,
 Small and Medium Enterprises as specified in Micro, Small and Medium
 Enterprises Development Act. 2006, hence it is not possible for us to
 verify the amount due to such enterprises.
 
 11.  Derivative Instruments:
 
 The Company uses forward exchange contracts to hedge against its
 foreign currency exposures relating to the underlying transactions and
 firm commitments. The Company does not enter into any derivative
 instruments for trading or speculative purposes.
 
 12.  During the year, the Company has commissioned One more Wind
 Turbine Generator of the Capacity of 2 MW in the State of Maharashtra.
 
 13.  The company is of the view that there are no indications of
 material impairment and the carrying amount of its fixed assets or
 where applicable, the cash generating unit to which these assets
 belong, do not exceed their recoverable amount (i.e. the higher of the
 assets'' selling net price and value in use). Hence, no impairment had
 arisen during the year as per the recommendations of the Accounting
 Standard - 28 on Impairment of Assets.
 
 14.  In the opinion of the Management, the Current Assets and Loans and
 Advances as shown in the books are expected to realise at their Book
 Value in the normal course of business and adequate provision have been
 made in respect of all known liabilities.
 
 15.  Certain balances under the heads Sundry Debtors, Loans & Advances
 and Sundry Creditors are subject to confirmations from the respective
 parties and consequential reconciliation, if any.
 
 16.  Previous years figures have been regrouped/rearranged wherever
 necessary.
 
 17.  The balance sheet abstract & company''s general business profile as
 required by part IV of Schedule VI to the Companies Act, 1956 are given
 in the annexure.