Notes to Accounts of Hanjer Fibres Ltd.

Mar 31, 2012

1. CONTINGENT LIABILITIES

In our opinion and to the best of our information and according to the explanations given to us, we report that the Company has disputed sales tax liability in contingent nature. As per the assessment order provided to us, we state that the Company has sales tnx liability of Rs. 13,661,826 for the year 2000-2001. The appeal has been filed before Gujarat Sales Tax Tribunal. We further report that the survey had been done at the factory premises by Sales Tax Department as op 13-02-2008, however no assessment order has been received yet.

2. SEGMENT REPORTING The Company is operating in textile segment only.

3. EARNINGS PER SHARE

The amount considered in ascertaining the Company's earnings per share constitutes the net profit after tax. The number of shares used in computing basic earnings per share is the weighted avenge number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.

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Mar 31, 2010

1. TERM LOANS / TERM OVERDRAFT FROM BANKERS AND FINANCIAL INSTITUTIONS

First charge on all the movable and immovable assets of the company, present and future subject to prior charge on specified movables in favour of the companys bankers for working facilities, ranking pari passu in favour of MCB/Reliance Asset Reconstruet|S5rB8^Dany Limited/Typhoon Financial Services Limited for their term loan / term overdraft.

2. CONTINGENT LIABILITIES:

In our opinion and t6 the best of our information and according to the explanations given to us, we report that the Company has disputed sales tax liability in contingent nature. As per the assessment order provided to us, we state that the Company has sales tax liability of Rs. 13,661,826 for the year 2000-2001. The appeal has been filed before Gujarat Sales Tax Tribunal. We further report that the survey had been done at the factory premises by Sales Tax Department as on 13-02-2008, however no assessment order has been received yet.

3. Balances in accounts of the sundry debtors/creditors are as per books of account, in the absence of adequate response to the companys request for confirmations.

4. INSURANCE CLAIM RECOVERABLE:

The company has secured an order of the Honourable High Court for arbitration proceedings to be commenced wimin time limit specified in the said order for the balance disputed insurance claim of Rs. 7,000,000/-. The insurance companys appeal in the matter heard by the larger Bench and decided in favour of the Company. Moreover, there are several Supreme Court Judgements to support the contention of the company in the matter. Hence, the company is confident of recovering the balance claim amount with interest.

5. Total dues to Small Scale Industrial undertaking Rs. Nil (Previous year Nil)

6. Related Party Disclosures:

a) List of Related Parties and Relationships:

PARTY RELATION

Key Management Personnel

Mr. Irfan A. Furniturewala Managing Director

7. Deferred Tax Accounting:

As per the provisions ofthe Income Tax Act, 1961 the Company has unabsorbed depreciation. As a conservative business policy, the Company has not recognized the same as Deferred Tax Assets

8. Segment Repotting:

The Company is operating in textile segment only.

9. The Figures of the previous year have been regrouped and rearranged wherever necessary to conform to this years classification.

10. Quantitative & Other information (As certified by Directors).