1.  SECURED LOANS:
 
 a.  The Term Loan dues to Industrial Development Bank of India, The
 Industrial Finance Corporation of India Ltd, The Industrial Credit and
 Investment Corporation of India Limited, Industrial Investment Bank of
 India, Vijaya Bank, State Bank of India and Union Bank of India are
 secured by a First Charge on pari-passu basis in favour of the said
 Financial Institutions and Banks on the Company s immovable properties,
 both present and future. The Funded Interest Term Loans from Banks are
 secured by a second charge on the Companys Fixed Assets. The Term
 Loans have been guaranteed by two Directors in their personal
 capacities.
 
 b.  Industrial Development Bank of India, The Industrial Finance
 Corporation of India Ltd., The Industrial Credit and Investment
 Corporation of India Ltd.. Industrial Investment Bank of India Ltd.,
 have the option to convert at par a portion of their Term Loans to
 Equity Share Capital which may be exercised at one or more occasions
 but not exceeding 20% of the Loan during the currency of the Loan.
 
 c.  Cash Credit account from Banks are secured by hypothecation of
 stocks of raw materials, work-in-process, Consumable Stores, Finished
 goods and book-debts. The Cash-Credit borrowings have been guaranteed
 by two Directors in their personal capacities
 
 2.  Estimated amount of commitments on account of contracts on Capital
 account and not provided for (net of advances) Rs. 32.00 Crores
 (Previous Year Rs. 32.00 Crores).
 
 3.  Demand for an amount of Rs.42.89 lakhs (Previous year 42.89 lakhs)
 from Tamilnadu Sales Tax Authorities and Rs. 104.84 lakhs from Central
 Excise Authorities, Guntur is disputed and hence not provided for.
 
 4.  Inventories have been taken as valued and certified by the
 Management.
 
 5.  No Provision is made towards income tax in the absence of taxable
 income.
 
 6.  Confirmation of Balances from Debtors/Creditors including Banks and
 financial Institutions are awaited.
 
 7.  LAND:
 
 The Government of Andhra Pradesh, vide G.O.Ms. No. 390, dated
 26.06.1982, 641 dated 31.12.1983 and 288 dated 16.02.1983 granted lease
 for 250 acres of factory/ colony land and 500 acres for mining for a
 period of 50 years for selling up the factory.  The Company also
 created mortgage in favour of the financial institutions after
 obtaining necessary approvals from the concerned authorities. The
 Company has also been paying lease rentals by way of deposit with the
 Endowment Department and solar, an amount of Rs. 18.95 lakhs has been
 paid towards lease rentals, which will be adjusted as and when the
 lease agreement is finalised.
 
 8.  Pending quantification, no provision is made in the accounts for
 lability in respect of gratuity and leave encashment payable to
 employees.
 
 9.  The winding up order passed by BIFR has been appealed to AAIFR
 which has been admitted on 26.09.2005. In the meanwhile, the Company
 has made OTS with all the Secured Creditors barring IFCl &IIBI with
 whom the Discussions are in the advanced stage of finalisation. AAIFR
 has directed IFQAIIBI to settle the OTS quicldy so that the DBS can be
 reviewed. The Directors are confident that the settlement with IFCI &
 IIBI will be fothcoming soon and thereafter shall obtain DRS approved
 by the competent authority paying the way for the ultimate revival of
 the Company. No provision for interest on all Term Loans and
 compounding of interest and other charges on loans from Financial
 Institutions has been made for after the period of cut-off date. ie.
 31.3.1996- Provision for interest on Funded Interest Term Loan has also
 not been made since 1-4-93. The accumulated interest not provided for
 as stated above upto 31.032006 is Rs. 2649.13 lakhs (Previous period
 Rs.2398.18 Lakhs).
 
 10.  (a) Interest on Term Loan from banks has not been provided since
 01.01.1998. The amount aggregates to Rs. 621.21 Lakhs (Previous Period
 545.89).
 
 (b) Accumulated interest upto 31.03.06 on Funded Interest Term Loans
 given by commercial banks amounting Rs. 384.95 lakhs (Previous Period
 Rs.355.33 Lakhs) has not been provided, but shall be debited to Profit
 & Loss Account as and when the payment is made.
 
 (c) Vijaya Bank. SBI and UBI has communicated their in Principle
 Acceptance-for a One Time Settlement amount of Rs. 250.00 Lakhs. Rs.
 148.00 Lakhs and Rs. 60.00 Lakhs respectively against the Term Loans
 and Working Capital, out- standing dues to the Banks. Amount of Rs.
 250.00 Lakhs to Vijaya Bank. Rs.  109.00 Lakhs to SBI and Rs. 60.00
 Lakhs to UBI against the settlement amount is already paid by the
 Company.
 
 11.  Depreciation to an extent of Rs. 760.76 lakhs has not been
 provided upto 31.03.2001, on Plant & Machinery and Electrical
 Equipments installed during the expansion in 1995-96, as these could
 not be put to use to the full extent due to shortage of working capital
 and the same shall be provided in the year company making profits.
 
 12.  In the absence of profits deferred Revenue Expenditure has not
 been written off during the Period.
 
 13.  The amounts shown as expenditure are net of recoveries, wherever
 applicable.
 
 14.  The accounts of the Company is prepared on a going concern basis,
 inspite of the huge accumulation of losses, as the Management is
 confident of reviving the unit keeping in view the upsurge in the
 Cement Industry, and improvement in the operation.
 
 15.  NOTE ON SSI DUES:
 
 In the absence of adequate information, and considering the
 multiplicity and dffliculty in identification of accounts of such
 undertakings, particulars hi respect of dues to SSI undertakings, as
 required in Schedule VI of the Companies Act, 1956 is not furnished.
 
 16.  RELATED PARTY DISCLOSURE :
 
 In accordance with Accounting Standard-18,  Related Party
 Disclosures*, issued by the Institute of Chartered Accountants of
 India, the Disclosures are as follows:
 
 17. Segment Reporting
 
 The Company is a single product company and operates only in the
 Domestic Segment only in South India. Hence, the information required
 to be disclosed as per AS-17 on segment reporting is not applicable.