Note No. 1: CONTINGENT LIABILITIES                       (Rs. In lacs)

                                       As at 31.03.14   As at 31.03.13

I)  Income-Tax demands against which 
the department has gone on appeal.             285.56           285.56

II) Sales-tax demands against which 
company has gone on appeal.                    152.04           152.04

III) Excise demand against which Central Excise Department has gone on appeal before Hon'ble High Court, Andhra Pradesh

A sum of Rs.9.00 lacs has already 
been paid / adjusted against this 
liability.                                     157.58                -

IV)  Guarantees issued and outstanding        1512.00          4245.00

Dues with Banks / Institutions have been settled in OTS during the year and all the legal cases initiated by the Creditors against the Company have been withdrawn and as on date there are no legal proceedings pending against the Company.

Note No. 3: CASE BEFORE BOARD FOR INDUSTRIAL AND FINANCE RECONSTRUCTION (BIFR)

The Hon'ble Board for Industrial and Financial Reconstruction (BIFR) has declared the Company as Sick Industrial undertaking in terms of Sec 3 (1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 at it's hearing held on 12th February, 2007 and IFCI was appointed as Operating Agency (OA) under section 17(3) of the Act with directions to prepare a revival scheme for the Company.

The AIFR has directed the Company to submit DRS to the Operating Agency and the Company had submitted DRS to Operating Agency and the case is pending before BIFR.

Note No. 4: In view of the brought forward unabsorbed losses, there is no liability as per Income tax Act, 1961.

Note No. 5: In respect of loan availed from M/s. Prayag Enterprises Private Limited, the Company is in the process of creation of charge on land and buildings situated at Nellore, as required by Companies Act, 1956, by way of security.

Note No. 6: The Company has settled all the dues to Banks / Institutions under One Time Settlement (OTS) entered with them and as a result, a sum of Rs. 4,71,69,432/- has been transferred to Capital Reserve due to remission in the Principle portion of the liability.

Note No. 7: The IMFL Distillery unit at Jeedimetla, Hyderabad is being revived. In that connection a sum of Rs. 20,01,48,000/- has been paid to the Government of Andhra Pradesh towards arrears of annual license fee.

Note No. 8: The Steel Division at Nellore has been closed down. Out of the Steel Ingots and Billets on hand, 50.96 M.T have been sold during the year and the balance quantity of 30.19 M.T remained as raw material stock on hand at the year end.

Note No. 9: The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure requirements in this regard as per Schedule-VI of the Companies Act, 1956 could not be provided.

However, we have not provided any interest for delay in payment as per contractual terms, if any, for the enterprises covered under the above act.

Note No. 10: In the absence of operational profits during the year, the Company has not proposed dividend on Preference Share Capital. Since these shares are cumulative, the dividend accumulated up to the current year isRs. 4,73,26,712 (Previous year-Rs. 3,70,76,712).

Note No. 11: The balances of Sundry Debtors, Creditors, and Loans and Advances are subject to Confirmations.

Note No. 12: Previous year's figures have been regrouped / re classified wherever necessary to correspond with the current year's classification / disclosure.