1 The net worth of the Company has substantially eroded. However, these
 accounts have been prepared by applying the assumption of Going Concern
 in view of continuing business operations. Further, the Management of
 the Company is taking steps towards optimization of its operations and
 is of the view that same shall enable the Company to achieve positive
 results and the restoration of positive net worth. ¦
 
 PARTICULARS                   For the year           For the year
                               ended                  ended
                               31st March, 2011       31st March/2010
 
 2   Contingent Liabilities: 
 
 (a) The Company has imported
     capital goods under           18,00,000           18,00,000
     the EPCG Scheme at 
     concessional duty with an      
     export obligation for which 
     bank guarantee has
     been provided for in
     favour of Government of
     India.  In  the  event  
     export  obligation  is  not
     fulfilled the Company
     would be liable to pay the .         
     custom duty saved along 
     with interest thereon.
     The amount of  custom   
     duty   saved   is   Rs.
     1,07,65,944/-. ,                           
 
 (b) Excise demands, where 
     favorable decision 
     of the                           58,313              58,313
     Appellate Authorities are
     disputed by the Excise
     Department in further appeals. 
 
 3   No provision has been made for            
 
 (a) Estimated gratuity payable 
     to its employees at a       2,13,31,769          1,76,73,792
     future date, being the
     difference between the''
     liability determined on
     actuarial valuation and the
     fund, balance-:                    
 
 (b) Estimated leave salary 
     payable to its employees at   10,19,514            10,19,514
     a future date, representing  
     the difference between
     the liability determined on
     actuarial valuation and
     the-provision made therefore
     as upto ,31st March,
     2007. Further, effective 
     year ended 31st March,    
     2008 actuarial valuation has
     not been carried out.
 
 4 The Company had revalued it''s leasehold land, buildings, electrical
 installations and plant and machinery acquired upto 31st March, 1995
 and held as on 1st April, 1996 at their Current Replacement Cost on
 the basis of a report by an approved value by ¦transferring the
 resultant difference between the Current Replacement Cost and
 Original Cost of Rs. 5,13,83,446/- to the Revaluation Reserve
 Account.  Difference in depreciation in respect of revalued assets as
 provided on Current Replacement Cost and Original Cost is adjusted
 as under:
 
 (a) Till 31st March, 1996 depreciation adjusted to Revaluation Reserve
 Account is Rs. 2,16,57,503/-.
 
 (b) For the year depreciation transferred from Revaluation Reserve
 Account to the Profit and Loss Account is Rs.2,39,938 /- (Previous Year
 Rs.9,47,047/--),
 
 5 During the previous year, the Company had sold its freehold land
 situated at Pathardi Nasik for Rs. 18,00,000/- and earned profit of Rs.
 56,37,254/-, representing an extraordinary item.  The said profit is
 included in the amount of Profit on Sale of Fixed Assets under the
 Schedule of Other Income.
 
 6.  The Company''s 36/70,000 6% Cumulative Convertible Preference Shares
 of Rs 30/ each wen, converted into 36,70,000 equity shares of Rs. 10/-
 each fully paid up at a premium Rs. 20/- per share on 26th September,
 2007.  However, the Company has not paid the Cumulative Dividend of Rs
 1,42,97,918/-in respect of the said 6% cumulated convertible preference
 shares up to the date of their conversion into equity shares, as the
 management is of the view that the same is not payable as not declared.
 
 7. The Company in accordance with the approval accorded by it
 shareholders at its extra ordinary general meeting held on 8th
 January,2008 had issued 1830000 Zero Percent Convertible Warrants of
 Rs.30/- per warrant convertible into 183000 on vemdie Waianae of Rs.
 30/- per warrant convertible into 18,30,000 equity shares of Rs. 10/-
 each at a premium, of Rs.  20/- per share on preferential basis
 placement as per rite SEB1 (Disclosure & Investor Protection) being 10
 % of the amount receivable on issue thereof. During the previous year
 account of non-receipt of 90%. of me amounts payable on convulse hereof
 some warrant were cancelled by the Board of Directors at their meeting
 held on 28th January 2010 and consequently the application money
 received there against was forfeited and credited to Capital Reserve
 Account.
 
 8.1.  In the absence of Net Profit as computed under Section 349 of
 the Companies Act made.  Consequently, the computation of Net Profit
 under Section 349 of the Companies Act, 1956 has not been shown.  
 
 9. The Company is in the process of evaluating the utility as well as
 realisable value of certain inventories of stores, spare parts and die
 blocks which have remained unmoved for asserting whether there is any
 need to provide for obsolescence/ impairment. Upon completion of such
 execrate, necessary provision shall be made thereof, if required.
 
 10.  No provision for doubtful debts aepreeatine to Rs.23649749
 Previous Year Rs 2,49,34,621 ) has been made as the Company continues
 its efforts to recover them bv taking appropriate legal steps and or
 personal follow up actions.
 
 11. The Company had entered into an agreement, effective 1st April,
 2005 with Messrs.  Invest well for portfolio management and investment
 Activities  24 Months. In accordance with the said agreement, the
 profits (Net) earned during the period of 24 months were to be shared
 equally and the losses (Net) incurred were to be borne by Messrs.
 Invest well. The said Agreement was mutually extended for a further
 period of 12 months. As on 31.03.20T1, there is a debit balance of Rs.
 6,32,66,282/- in the name of.  Messrs. Invest well, which comprises of
 funds utilized and losses and costs incurred in relation to the said
 activities. The management is of the view that the said amount of Rs.
 6,32,66,282/-due from M/s Invest well is good for recovery.
 
 12.  Loans and Advances include Rs. 2,75,69,994/-, being the aggregate
 amounts paid to Prathamesh Investment & Trading Private Limited
 including, on their behest, for certain services rendered by them in
 connection with Preferential Issue of Shares and Warrants by the
 Company in the earlier period(s).
 
 No provision has been made for the fees payable by the Company to them,
 as the amount payable has not been agreed upon by and between the
 Company and the said Prathamesh Investment, & Trading Private Limited
 as yet. The management has decided that as and when the said- fees are
 determined, then amount thereof shall be charged off to Share Premium
 Account ,:in accordance with the provisions of Section 79 of the-
 Companies Act, 1956 and hence, provision at this junction is not
 necessary.
 
 13. The Company had entered into a license cum operating agreement
 (the agreement) with Business Combine Limited (BCL) under which, w.e.f.
 1st April, 2005, BCL had granted the Company an exclusive license to
 operate its factory for manufacture of S.g!  Iron Castings of various
 types ,& machine components, as per the terms and conditions as stated
 therein. The said agreement has been discontinued w.ei. 1st October,
 2008 and consequently, the amount of security deposit of Rs.
 9,00,00,0.00/- placed by the Company has been refunded during the year.
 
 As on 31st March, 2011 an amount of Rs. 7,04,68,215/- is recoverable
 from BCL, which includes the following which are subject to
 reconciliation and confutation by item.
 
 (a) Interest of Rs. 1,86,57,778 charged by the company during the
 previous year on the outstanding balances recoverable from BCL,
 However, the Company has not charged such interest on the outstanding
 balances recoverable from BCL for the year.
 
 (b) Labour charges of Rs.81,60,395/- credited by the Company to BCL
 towards products manufactured by them for and upto years ended 31st
 March, 2011.
 
 (c) Debit notes issued by the Company for rejection(s) as well as
 reimbursement of expenses for and upto years ended 31st March, 2011.  
 
 The aforesaid debit of interest/rejection(s)/reimbursement of expenses
 and credits for conversion charges are subject to acceptance by BCL,
 The necessary adjustments if any arising upon finalization/settlement of
 the aforesaid claims-shall be made in the year in which the same are
 concluded.  ''
 
 Further, in the opinion of the Management of the Company, the amount
 due from BCL as on 31.03.2011 of Rs. 7,04,68,215/- is good for
 recovery, though it is a Sick Industrial Company as it continues its
 business operations and the Company. endeavors to recover the same.
 
 14. Advances includes Rs. 1,07,87,214 (Previous Year Rs.  1,05,28,192)
 paid to suppliers which are subject to reconciliation and necessary
 adjustment entries shall be passed upon reconciliation thereof.
 
 15. The balances of Sundry Debtors, Loans and Advances and Sundry
 Creditors are subject, to conformation/reconciliation. Necessary
 adjustment entries shall be passed upon receipt of conformations/
 reconciliations.
 
 16. The Company does not have any information as regards status of the
 vendors covered under the Micro, Small and Medium Enterprises Act, 2006
 and consequently, no disclosure of the amount due to such vendors along
 with interest payable, if any, has been made.
 
 17.  No provision has been made for the income tax demand of Rs,
 64,90,611 for earlier years as the same are disputed in appeals.
 
 18. The Company has constituted an audit committee under Section 292A
 of the Companies Act, 1956.  The audit committee had functioned during
 the year.  However; the Management of the ''Company is taking steps to
 make the same more effective.
 
 19.  SEGMENT REPORTING PURSUANT TO ACCOUNTING STANDARD-17:
 
 The Company is engaged. in the business of manufacture arid sale of
 carbon and alloy steel forgings and hence, The company has only one
 business segment. Further, the Company does not have any geographical
 segment.
 
 20.  TAXATION:
 
 (a) Deferred tax : In accordance with Accounting Standard (AS - 22) on
 Accounting for Tax on Income notified by the Companies (Accounting
 Standards) Rules,20Q6 , Deferred Tax Assets consist of substantial
 amounts of''carry'' forward losses and unabsorbed depreciation under fee
 Income Tax Act, 1961. However, since the availability of sufficient
 future taxable income against Which the said benefits can be set off is
 not possible to be ascertained with virtual certainty, Deferred Tax
 Assets have not been recognised as a measure of abundant caution.  
 
 (b) Current Tax Company has incurred loss during the year and hence no
 provision for current tax has been made during the year.
 
 21.  DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING
 STANDARD
 
 A.  Related Parties and their relationship:
 
 1.  Mr. C.D Dhongde: Managing Director, a Key Management Personnel
 (KMP)
 
 2 Business Combine Limited: Promoter Company (*)
 
 3.  Hindustan Hardy Spicer Limited and XLO India Limited: Companies in
 which a director of the Promoter Company exercises significant
 influence-(*).  (*) Referred to as Associated Enterprises
 
 Note: Related parties and then relationship are as identified by the
 Company and relied upon by the Auditors.