a) Guarantees given to banks against Credit Facilities availed by an associate Company of Rs. 2,65,12,00,000.(Previous period Rs. Nil).

b) Entry Tax demands of Rs. 5,76,968 (Previous Period 7 5,76,968) against which amount deposited Rs. 1,66)000 (Previous Period Rs. 1,66,000).

c) The Assistant Commissioner of Central Excise, Bhopal ("ACCE") issued following two show cause notices to the Company in relation to availment and utilization of CENVAT Credit amounts under rule 14 of CENVAT Credit Rules, 2004 read with section 11A of Central Excise Act, 1944 and the Company has raised the objection before ACCE.

d) Regional Provident Fund Commissioner, Gwalior has lodged the case under section 7Aof the "Employees' Provident Fund and Miscellaneous Provisions Act, 1952", ("PF Act") for the recovery against provident fund amount from April, 2008 to December, 2010 and passed an order under section 8F of PF Act vide order no.EPF/MP/SRO/GWL/ENFORCEMENT/8F dated December 04,2013, for recovery of Rs. 2,157,618 (Previous Period Rs. 2,157,618). The Company has disputed the amount and filed an Appeal before Provident Fund Tribunal, New Delhi against which the PF Commissioner has recovered Rs. 1,074,351 (Previous Period Rs. 1,074,351) from the Company's bank account.

2. The Company has given corporate guarantees to Banks on behalf of Wearit Global Limited, an associate company for the various credit facilities availed by them during the year. However, the Corporate Guarantee limit as sanctioned by the shareholders has exceeded by Rs. 15,12,00,000 and the Company is taking necessary steps to ratify the same in ensuing Annual General Meeting of the shareholders.

3. Capital Reserve - others of Rs. 17,93,09,492 represents remission of liability on account of Principal by the Secured Creditors.

4. Sales is net of return of Rs. 15,51,961 (Previous PeriodRs. Nil).

5. Certain Trade Receivables, Trade Payables, Other Current Liabilities, Claim Receivables are subject to confirmation by the parties and include some old items pending reconciliation and adjustment to appropriate accounts. However, letter for balance confirmation were used during the year but confirmations are yet to be received.

6. The Company has adopted Schedule II of The Companies Act, 2013, for providing depreciation from 1st April, 2014. According to paragraph 3 of part 3 of Schedule II the useful life of assets shall not ordinarily be different from the useful life specified in Part C of the schedule provided that where a Company adopts a useful life different from what is specified in Part C of the schedule, the financial statements shall disclose such difference and provide justification in this behalf duly supported by technical advise. The Company has adopted different useful life from what is specified in Part C of the schedule. M/S Mahesh Agrawal and Associates, a government approved chartered engineer certified the remaining useful life as on 01/04/2014 regarding the assets of the Company.

Re-estimation of useful life of fixed assets resulted in adjustment of Rs. 3,26,159 in opening balance of retained earnings accounted in accordance with the change in useful life of assets. Due to change in the method of providing depreciation as per schedule II of the Companies Act, 2013, depreciation provided during the year is lower by Rs. 84,27,506 having consequential impact on the profit for the year.

7. Provision for Employee Benefits:

Accounting Standard-15 ("AS-15") on "Employees Benefits" 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 the Statement of Profit and Loss, respectively.

Gratuity:

As regards Gratuity, the Company is under "The Employee Group Gratuity Scheme" of the LIC for meeting its obligation under post employment benefits and the Company has no obligation to pay benefits to the employee and insurer has the sole responsibility for paying the post employment benefits.

As per LIC's renewal intimation, the Company has contributed a sum of Rs. 2,19,930. In accordance with the provisions of AS-15 on "Employee Benefits", the contribution so made is charged to the Statement of Profit and Loss.

Leave Encashment:

As per Actuarial Valuation as on March 31,2015 and recognized in the financial statements in respect of Employee Benefit Schemes:

8. The Company is primarily engaged in the business of manufacturing and selling of yarn and is managed organizationally as a single unit. Accordingly, the Company is a single business segment company, which as per Accounting Standard -17 is considered the only reportable business segment. The geographical segmentation is not relevant, as the Company did not have any overseas operations during the year.

9. Disclosure in respect of related parties as defined in Accounting Standard 18 are given below:-

A. Key Managerial Personnel and Relatives

a. Mr. Manish Kumar, Director

b. Mr. Vilas Agarwal, Whole time Director

c. Mr. Balesh Kumar Bagree, Chief Financial Officer

d. Mrs. Nidhi Binani, Company Secretary ,

B. Associates

a. Wearit Global Limited

b. Ritspin Synthetics Limited

c. Dhanterash Sale Private Limited

10. The timing difference relating mainly to depreciation and unabsorbed losses result in net deferred tax credit as per Accounting Standard 22 "Accounting for Taxes on Income". As a prudent measure the net deferred tax assets relating to the above have not been recognised in the Financial Statements.

11. 100% of indigenous Raw Materials and Stores & Spare parts consumed during the year

12. The figures of the current year are for twelve months hence, not comparable with the previous period figures of six months. However, the previous period figures, wherever necessary, have been regrouped, reclassified and recasted.