Regd. Off : A-60, OKHLA INDUSTRIAL AREA, PHASE - II, NEW DELHI - 110020.

STANDALONE UNAUDITED FINANCIAL RESULTS FOR THE

QUARTER ENDED JUNE 30, 2013

'The above financial results have been reviewed by the Audit Committee and were approved by the Board of Directors in their meeting held on 8th August, 2013.

'In accordance with Accounting Standard 17 on Segment Reporting notified under section 211(3C) of the Companies Act, 1956, for standalone financials, the Company has identified two Business Segments viz., Textile Manufacturing and Textile Trading, accordingly segment disclosure has been done.

The Auditors, in their limited review report have mentioned regarding diminution in the value of company's long term Investment of Rs. 2,044.70 lacs and recoverability of Rs. 5,041.46 lacs ( Previous quarter Rs. 4,710.71 lacs) in Amit Spinning Industries Limited (ASIL), subsidiary of the Company. Due to economic slow down, ASIL had registered losses during the quarter and in earlier financial years and eroded its net worth. The Company believes that the diminution in value of said Investment is temporary in nature and considering improvement in the global textile market, ASIL will be able to make good its losses in a foreseeable period of time which will also place this subsidiary in a position to repay the liabilities in due course and hence no adjustment is required in the books of accounts.

As on June 30, 2013, the accumulated losses of the Company exceeded its net worth. Accordingly company in compliance with the provisions of section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 filed a reference with Board for Industrial and Financial Restructuring (BIFR). The Company’s operations were adversely affected in 2011-12 due to adverse Govt policies and high volatility of Raw Material prices. Further, considering the change in scenario, recent performance and trends of the company as well as overall industry outlook, the management believes that losses incurred in the past would reasonably be made good, in due course. The financial statements, as such have been prepared on a going concern basis on the strength of management’s plan of revival including reorganization of business.

The Company has an investment of Rs. 5,610.11 Lacs and Rs. 93.24 Lacs in its subsidiary Spentex Netherlands B. V. (SNBV) and its step down subsidiary Spentex Tashkent Toytepa LLC (STTL) respectively. Further it has Rs. 700.12 Lacs as export receivable from STTL and advances of Rs. 950.71 Lacs in SNBV as on June 30, 2013. During the period of investment Government of Uzbekistan changed certain laws and policies by breaching the investment agreement and rendered operation of STTL unviable. Since treaties entered between the Government of India and Uzbekistan and the Investment agreement entered between Govt. of Uzbekistan and Spentex were breached, company has issued notice claiming protection of investment and payment of dues & compensation for the losses suffered by the company. Company has since been making all possible efforts to settle the same amicably with the Govt. of Uzbek., failing which arbitration proceeding would be initiated by the company to recover its Investment and claims. In view of legal opinion and claim lodged with Govt. of Uzbek., the Directors have decided not to make any provision for diminution in value of investment at this stage.

Trade receivables and advance balances amount aggregating to Rs. 63.71 Lacs and Rs. 273.14 Lacs respectively due from certain parties where payments are not forthcoming. Against the above, the Company has filed a suit for recovery. The Company is making effort to recover the same and expects to reduce them significantly. Based on outcome of the legal suit coupled with further negotiations with these parties, the management is of the opinion that ultimately there would be no losses against these old balances and hence no provision is considered necessary at the stage.