a) No securities convertible into Equity/Preference shares issued by the Company during the year.

b) No calls are unpaid by any Director or Officer of the Company during the year.

i) During 1995-96 the company offered 1,18,13,725 Equity Shares of Rs. 2/- each to the existing Shareholders in the ratio of 1 share for every 2 shares held, at a premium of Rs. 6/- per share as per letter of offer dated December 21,1995 . Out of the above shares, allotment of 6,000 Equity Shares are kept in abeyance under Court Order.

c) 6,00,000 Redeemable Cumulative Preference Shares were allotted by the Company on 21.01.2004, 2,00,000 Redeemable Cumulative Preference Shares were allotted by Erstwhile Eastern Jingying Ltd. on 09.02.2004 & 6,00,000 Redeemable Cumulative Preference Shares were allotted by Erstwhile Sstella Silks Ltd. on 26.03.2005. All the Preference Shares are carrying dividend at the rate of 8%. The date of redemption of all the preference shares which were due for redemption on 25th March, 2010 and 1st April, 2010 have now been extended upto 1st April, 2020 with the consent of all the preference shareholders. Hence,the earliest date of redemption is 1st April, 2020.However the redemption of the preference shares can only be made after the entire dues of Banks & Institutions are repaid.

d) The Promoter's shareholding remains encumbered in favour of Allahabad Bank, Leader Bank of consortium of Banks.

Term Loan

i) Pari passu first charge over entire movable fixed assets excluding assets charged to other lenders.

ii) Pari passu second charge over the company's entire current assets excluding assets charged to other lenders

iii) Equitable Mortgage of the Company's Property No. 84 in Sy. No. 39 measuring to an extent of 4 Acres 34 guntas situated at Kammasandra,Agrahara,Village- Kasaba Hobli,Anekal Taluk,Bangalore Dist together with all buildings & structures thereon and all plant & machinery attached to the earth;both present & future.

iv) Equitable mortgage of the Company's property on Plot No: 209 in Bommasundra Industrial Area, Anekal Taluk,Hosur Road,Bangalore,admeasuring 10896 sq.mtrs together with all buildings & structures thereon.

v) Personal guarantee of Shri S.S.Shah and Shri Sundeep Shah.

Working Capital Term Loan

i) Secured against first pari-passu charge on all Assets,excluding assets exclusively charged to respective lenders.

ii) Equitable Mortgage of the Company's Property at Plot No.11A of Nanjangud Industrial area situated in Sy No.184,185 and 169 of Kallahally Village,Chikkaiahna,Chatra,Hobli,Nanjangud Taluk,Mysore District containing by admeasurement 58686.00 sq. mtrs.

iii) Second charge on the Company's property at 411, Telugarahalli Road,Anekal,Bangalore 562106

iv) Second charge on the Company's property at Kammansandra Agrahara Kasaba Hobli,Anekal, Bangalore 562106.

v) Second Charge on the Company's Plot No: 209 in Bommasundra Industrial Area, Anekal Taluk,Hosur Road, Bangalore,admeasuring 10896 sq.mtrs together with all buildings & structures thereon.

vi) Personal guarantee of Shri S.S.Shah and Shri Sundeep Shah.

Loan from others

Secured by residual charge on the Company's Assets to the extent of satisfaction of charge under OTS with Banks.

Loan from Related Parties

Promoters Contribution (free of interest) to remain subordinate to the Bank Loans.

*Nature of Security

i) Hypothecation of entire current assets including book debts of the Company on first charge basis ranking pari passu with Bankers without any preference or priority of one over the other.

ii) Hypothecation of realizable non-current assets of the Company on first charge basis ranking pari passu.

iii) Hypothecation of all tangible,moveable plant & machineries,equipment,etc.located at the Company's unit at Anekal Unit I & II on second charge basis ranking pari passu.

iv) Exclusive pari passu charge on specific plant and machinery installed at Anekal unit,Karnataka created out of sale proceeds of the Company's Noida unit.

v) Second Charge on the company's Plot No: 209 in Bommasundra Industrial Area, Anekal Taluk,Hosur Road,Bangalore,admeasuring 10896 sq.mtrs together with all buildings & structures thereon.

vi) Personal Guarantee of Shri S.S.Shah and Shri Sundeep Shah.

2) Contingent Liabilities not provided for in respect of :

                                               2014-15       2013-14 
                                            Rs. In Lacs    Rs. In Lacs

(a) Guarantees given by the Bankers	         47.00	     47.00

(b) Excise, Sales tax, Custom Duty, 
ESIC & Other Claims	                        389.44	    184.44

(c) Dividend on Cumulative Preference
Shares (Including tax)	                        655.07	    520.68

4) The Company had executed bonds worth Rs. 5,403.04 Lacs in favour of President of India being the customs duty for import of capital goods under the EPCG License. Under the said license it is obligatory on the part of the Company to export products worth Rs. 43,224.32 Lacs over a period of 8 years from the date of issue of the license i.e. between 20th December, 2002 to 19th February, 2019 for availing the concessional rate of customs duty on imports. The Company has completed the entire export obligation of Rs. 43,224.32 Lacs up to the year ended 31st March, 2012. On completion of the export obligation bonds executed by the Company to the extent of Rs. 5,273.79 Lacs (P.Y.Rs. 4,849.67 lacs) have been released and the balance bonds of Rs. 129.25 Lacs (P.Y. Rs. 553.37 lacs) is under process of being released by the Commissioner of Customs.

5) Claims against the Company not acknowledged as debts:

i) Demand by the Department of Commercial Taxes, Government of Karnataka, levying a sum of Rs. 20.00 lacs, as Entry Tax on Import of Plant & Machinery. The Company has obtained a Stay Order from the Hon'ble High Court of Karnataka during 1996.

ii) Demand by the Commissioner of Customs, Bangalore for Rs. 109.77 lacs have been stayed by the Customs, Excise and Service Tax Act Appellate Tribunal, Chennai. The Company has deposited a sum of Rs. 38.00 lacs with the Customs Authorities under protest.

6) Lining Fabrics valued at Rs. 93.78 Lacs were imported in 2002-03 for usage in manufacturing of products for export. Due to the non-acceptance by the Customs Department of the methodology adopted by the Company for the co-relation between the material used and the material imported, an amount of Rs. 154.50 Lacs was paid in protest towards Customs Duty on the said imports and shown under Advances. Since the final liability amount is unascertained and not acceptable by the Company in principle, no provision has been made in the accounts. The Adjudicating authority has passed an Order confirming the demand of the customs department. The Company's appeal before the CESTAT was heard and an Order has been passed setting aside the Order of the Adjudicating Authority. On remand of the Order, the Commissioner of Customs (Port) has once again confirmed the Order in original and the Company's second appeal before the CESTAT is being heard.

7) Export of goods made by the company from SEZ unit on specific order from the overseas customers have become subject of dispute in relation to its valuation. A show cause notice issued by DRI Kolkata was heard and adjudicated by the Customs Appellate and the matter was adjudicated imposing a fine and penalty amounting to Rs. 205.00 Lacs. The order of the Adjudicating authority has been challenged by the company before the CESTAT and a pre-deposit of Rs. 5.00 Lacs have been made and shown as an advance and no provision has been made against adjudicated liability of Rs. 205.00 Lacs in the statement of accounts.

8) a) After exit from the CDR Scheme on 20th August, 2014 the Company has bilaterally settled its dues with two Banks on one-time basis against the aggregated outstanding of Rs. 2,873.98 Lacs with a payment of Rs. 840.00 Lacs. The resultant amount of interest waiver is included as income under 'Other Incomes' and the rebate on principal is included under 'Exceptional Items'.

b) No provision in respect of interest payable to the banks and financial institutions for the period April'2014 to March'2015 amounting to Rs. 6,557.70 Lacs has been made in the Statement of Accounts in view of the reference made by the company to the BIFR on erosion of 100% net worth as at 31st March, 2015.

c) 'No Lien Term Deposit' with the consortium bankers for Rs. 2,400.00 Lacs towards 5% deposit of the amount outstanding against the offer of one time settlement were made, of which Rs. 1,809.40 Lacs have been appropriated by a few banks towards recovery of their overdue interest. The same has not been recognized by the company and no adjustment has been made and the principal amount of deposit is continued to be shown as 'No Lien Term Deposit' without accounting for interest accruals. In view of the arbitrary and unilateral decision of the Banks, no provision for interest accrued has been made in the Statement of Accounts.

9) Exceptional item represents

(a) The Rebate of Rs. 1,747.11 Lacs (P.Y. NIL) on the principal amount payable to the Banks on one time settlement.

(b) Payment made to Nanjangud workers amounting to Rs. 0.50 Lacs (P.Y. Rs. 306.21 Lacs)on account of their final settlement

10) As per provisions of the SICA Act 1985, the Company is a BIFR referred company pending registration.

11) (a) An amount of Rs. 3,697.22 Lacs has been provided during the year as bad & doubtful debts in addition to Rs. 10,648.85 Lacs provided in the earlier years. After writing off irrecoverable bad debts amounting to Rs. 1,680.97 the aggregate provision as at 31st March, 2015 stands at Rs. 12,665.10 Lacs which is considered adequate by the management for covering any shortfall in realization.

(b) The money suites filed before the Hon'ble Kolkata High Court are actively pursued to recover the amount from the overseas buyers towards sale consideration of the goods exported amounting to Rs. 25,203.90 Lacs(P.Y.? 26,427.08 lacs).

12) In terms of Accounting Standard-22, Deferred Tax Assets (DTA) of Rs. 429.77 lacs (P.Y. Rs. 1,828.81 lacs) is required to be recognized during the year. The Company has so far recognized DTA aggregating Rs. 4,572.98 lacs. Earlier recognitions were made based on future profitability and projections. The Company is of the opinion that net DTA of Rs. 4,572.98 lacs as recognized in the books is sufficient for future income and as such, the current year's DTA has not been recognized.

13) The dues to Micro, Small and Medium Enterprises as much to companies knowledge amounts to Rs. 3.87 lacs (since paid) which are outstanding for more than 45 days as at 31st March, 2015. This information as required to be disclosed under the Micro , Small and Medium Enterprises Development Act,2006 has been determined to the extent such parties have been identified on the basis of information provided by the supplier.

14) As per Accounting Standard 15 "Employees Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below :

Defined Benefit Plan

The Employees' gratuity fund Scheme managed by The Life Insurance Corporation of India (LICI) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized in the same manner as gratuity.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected rate of return on plan assets is based on the portfolio of assets held, investment strategy and market scenario. In order to protect the capital and optimize returns within acceptable risk parameters, the plan assets are reasonably diversified.

15) As the Company's business activities falls within a single primary business segment viz. Silk, Textile yarn, Fabrics and Made-ups, no further reporting is necessary as per Accounting Standard - 17 issued by The Institute of Chartered Accountants of India.

16) Related Party Disclosure in accordance with Accounting Standard - 18 issued by The Institute of Chartered Accountants of India.

(I) List of Related Parties

a) Associates: -

(1) Ethics Commercials Ltd.

(2) Lucky Goldstar Company Ltd.

(3) P.K.Textiles Ltd.

(4) Tarun Fabrics Ltd.

(5) Gemini Overseas Ltd.

b) Key Management Personnel: -

Shri S. S. Shah (Chairman & Managing Director)

Shri Sundeep Shah (Executive Director)

Smt. Ginia Devi Shah (Wife of Mr.S.S.Shah)

17) As per the provisions of Schedule II of the Companies Act, 2013, depreciation for the year ended March 31, 2015 has been provided on the basis of the useful life of the assets. As a result of this the depreciation expenses in the statement of Profit & Loss Account is higher by Rs. 652.25 Lacs.

No depreciation has been provided on the assets located at the Falta & Nanjangud units. In the year 2012-2013, assets located at the said units were impaired and both the units are inoperative since then.