Secured Loans:
 
 Foreign Currency Term loan from I. D. B. I. is secured by way of joint
 equitable mortgage, by deposit of title deeds over the Companys
 immovable properties (both present & future) and hypothecation of all
 movable properties (save and except book debts) subject to prior
 charge in favour of Companys bankers for working capital requirements
 on specific movables and it is further secured by personal guarantee of
 Sh. V. M. Dawra, Sh. R. B. Arora, Sh. V. K. Choudhari and Sh. S. K.
 Prahladka.
 
 Term Loan from Central Bank of India is secured by First Parri Passu on
 total fixed assets including all movable machinery and spare parts and
 further secured by personal guarantee of Sh. V. M. Dawra, Sh. R. B.
 Arora and Sh. V. K. Choudhary. Packing Credit loan from Central Bank
 of India is secured by hypothecation of Raw Material, work in progress
 Finished goods and further secured by way of second charge of Companys
 immovable properties. Bokadia Finance Ltd., Loan is secured against
 hypothecation of car.
 
 16020117
 1. CONTINGENT LIABILITES NOT PROVIDED FOR:
 
 Contingent Liabilities not provided for in respect of:
 
                                                     AS AT        As At
                                                31.03.2002   31.03.2001
 
 a) Income Tax demands  which the company has
 disputed and filed the appeal against
 the same.                                     2,70,61,581    44,13,324
 
 b) Suit filed against the Company for
 dishonour of Cheque (matter pending
 with the Court)                                  2,11,804     2,11,804
 
 c) Excise duty demand which the company
 has disputed and filed the appeal against
 the same                                         8,67,168
 
 2. IDBI and Central Bank has filed Suit with Debts Recovery Tribunal
 (DRT), Jaipur for recovery of their dues.
 
 3. The company has been declared Sick by BIFR in terms of section 3(1)
 of Sick Industrial Companies (Special Provisions) Act, 1985. Net Worth
 of the company has been completed eroded and Company is presently doing
 production on Job Work basis only. BIFR has appointed IDBI as operating
 Agency, with direction for conducting a Techno-Economic-Viability study
 (TEVS) of the company and presentation of Viability study report and
 financial scheme for its rehabilitation. The Accounts of the Company,
 however have been prepared on going concern basis.
 
 4. The Company has not got acturial valuation done in respect of
 gratuity and earned/encashment leave benefit payable to employees on
 retirement or otherwise (Amount not ascertained), accordingly provision
 of liability for the same as prescribed by Accounting Standard-1.5,
 issued by the Institute of Chartered Accountants of India could not be
 made.
 
 5. The Company has sought details from suppliers who had permanent
 registration certificate as SSI undertaking issued by the Directorate
 of Industries of a State or Union territory. In the absence of such
 information the amount outstanding of Small Scale Industrial
 Undertakings and its bifurcation for 30 days or more has not been
 ascertained. Interest due as per the Interest on delayed payments to
 Small Scale (and Ancillary Industries I undertaking Act, 1993 is also
 not ascertainable as on the Balance Sheet date.
 
 6. (a) Rs. 21,29,995.00, included in the bank balances, was kept by
 the Company as margin money with the Central Bank of India which has
 been adjusted by the bank against its dues despite all efforts by the
 Company not to do so hence the above amount has now been adjusted by
 the Company in the accounts by reducing the dues of the bank and the
 bank balances to that extent.
 
 (b) Rs. 2,03,542.73 and Rs. 5,000/- included in the bank balances lying
 with the Central Bank of India and Vysya Bank respectively in current
 accounts have been attached by the Income Tax Departments towards its
 income tax demands.
 
 7. In the opinion of the management the current assets and advance are
 approximately of the value stated, if realised in the ordinary course
 of business unless otherwise stated. The Provisions for all liabilities
 are adequate and not in excess of the amount considered necessary.
 
 8. Sales during the year include excise duty amounting to Rs. 42049/-
 (Previous year 487026).
 
 9. Prior period adjustment includes Rs. 36160/- as prior period
 expenses. (Previous year Rs. 270940.65 as prior period expenditure).
 
 10. Balances of sundry Debtors, Creditors and loans & Advances are
 subject to confirmation.
 
 11. No Directors Remuneration/perquisites has been paid during the
 year (Previous year NIL).
 
 12. CST Reimbursement Rs. 905513/- Received during the year pertaining
 to earlier year has been grouped under the head other income (Previous
 Year Rs. 352989/-).
 
 13. As the Company has been declared as a Sick Industrial Company by
 Honble BIFR and it proposes to file a rehabilitation proposal seeking
 relief in Interest and re-schedulement of loans from IDBI and Central
 Bank of India, Company has therefore not provided any interest for the
 year on the dues of above banks. The effect of such non-provision has
 resulted in reduction of loss and loans payable to the extent of Rs.
 51366258.30.
 
 14. Segment Reporting as required by Accounting standard (AS-17):
 
 The companys predominant risk and returns are from Terry Towel, which
 constitute 100% of this company revenue for reporting period. Thus the
 segment revenue, segment result, total amount of segment assets, total
 amount of segment,liabilities, the total amount of expenses incurred
 for depreciation and amortisation during the year all the same as they
 are reflected in the financial statement for the year ended on 31st
 March, 2002 and as on that date
 
 15. Related Party Disclosure as required by the Accounting standard
 (AS-18) issued by the Institute of Chartered Accountants of India is as
 follows:
 
 Name of related Party: Mr. V. M. Dawra
 
 Nature of relationship: Key Managerial Personnel
 
 Details of transaction: Rupees 30,000/- has been received from Mr. V.
 M. Dawra as interest free unsecured loans which has been repaid by the
 company during the year and Rs. 10000/- has been paid as advance which
 is still pending at the year end.
 
 16. The Loans & Advances include amount due from Managing Director of
 the Company amounting to Rs. 110000/- (Previous year Rs. 100000/-}.
 Maximum amount due at any time during the year Rs. 110000/- (Previous
 Year Rs. 108126.55).
 
 17. Earning per Share as per the accounting standard (AS-22) issued
 by the Institute of chartered Accountant of India:
 
                                                     For the Year ended
                                               31.03.2002    31.03.2001
 
 Profit & Loss as per P & L. A/c                (2303219)    (67803126)
 
 Weighted aggegate no. of equity               (11100000)    (11100000)
 
 Share outstanding (Of Rs. 10/- Each)
 Basic and diluted earning per Share           (Rs. 2.07)    (Rs. 6.11)
 (EPS)
 
 18. Accounting for Taxes on Income (AS-22):
 
 Deferred Tax Assets are arising mainly on account of brought forward
 losses and unabsorbed depreciation under Tax Laws.
 
 In view of heavy losses there is no reasonable certainty that there
 will be sufficient future taxable income against which deferred tax
 assets can be realised and accordingly deferred tax assets are not
 recognised and carried forward, and no deferred tax is recognised on
 the same.
 
 19. The company has applied for delisting in Bombay Stock Exchange
 (BSE), Ahemdabad Stock Exchange (ASE), and Culcutta Stock exchange
 (CSE). However no proceedings in that respect. has taken place and the
 company is still providing for listing fees payable.
 
 20. Previous year figures have been re-grouped or re-arranged
 wherever necessary.