1. CONTINGENT LIABILITY NOT PROVIDED FOR IN RESPECT OF:
 
                                                     As at         As at
                                                31/03/2002    31/03/2001
                                                    Rupees        Rupees
 
 A. Claims against the Company not acknowledged
 as debts.                                         1570225       1453725
 
 B. Sales Tax Demand                                171936         47781
 
 C. Mining Eng. II                                       -       8286611
 
 D. Dead Rent (Royalty)                             228194             -
 
 2. Estimated amount of contracts remaining to
 be executed on capital account and not provided for     -             -
 
 3. Payment to Auditors.
 
 As Auditors                                         15000         15000
 
 Out of Pocket Expenses                               5827          9049
 
                                                     20827         24049
 
 4. The company has been accounting liability for royalty In respect or
 Finished goods on goods despatched in lumpsum. Hence liability on
 account of royalty, if any, for the financial year ended 31/03/2001 and
 thereafter would be accounted for after the completion of DMG
 assessment.
 
 5. Any liability on account of Sales Tax, if any, would be accounted
 for after the completion of assessment.
 
 6. The depreciation on Fixed Assets Tor the current year has not been
 provided in the Financial Statements. However the company has provided
 depreciation of Rs. 1,12,778/- for 1999-2000, Rs. 1,12,778/- for
 2000-01 and Rs. 1,05,015/- for 2001-02 on the assets sold by the
 company during the current year upto the date of transfer of assets.
 This is a deviation from Accounting Standard No. 6(AS6). The reason for
 non provision is absense of operating profit before charging such
 depreciation.
 
 The financial Implication of such deviation Is that the loss for the
 year, as disclosed in the Profit & Loss Account is less by the amount
 of depreciation of Rs. 15,55,639/- and the value of Fixed Assets in
 the Balance Sheet is higher by a like amount.
 
 The aggregate amount of depreciation ought to be provided and is
 computed in accordance with Section 205 (2) of the Companies Act. 1956
 is Rs. 47,99,722/- being Re.16,88,542/- for 1999-2000, Rs. 16,55,541/-
 for 2000-01 and Rs. 15,15,039 Tor 2001-02.
 
 7. The Company accounts for the following items on cash basis:
 
 a) Interest on arrears of allotment and call monies - As and when
 received.
 
 b) Gratuity - As and when paid.
 
 8. In the openion of the Management, the Current Assets and Advances
 are approximately of the value stated, if realised in the ordinary
 course of business unless otherwise stated, the provision for all
 liabilities are adequate and not in excess/shortage of the amount
 reasonably necessary.
 
 9. Sundry Debtors amount to Rs. 0.26 lac are under litigation (Previous
 year Rs. 0.26 lac).
 
 10. Corresponding figure of the previous year have been regrouped to
 conform with this years grouping whenever necessary.
 
 11. All the balances of Sundry Debtors, Sundry Creditors for Trade &
 Expenses, Advances to/from parties, Loans and Advances are subject to
 confirmation/Reconciliation.
 
 12. As the Company has no taxable profits relevant to this accounting
 year, hence no provision for income tax has been made.
 
 13. None of the employee is getting more remuneration as required by
 Section 217 (2A) of the Companies Act, 1956 and the rules made
 thereunder.
 
 14. Payments made/credited to various contractors during the year is
 not reconciled/correlated with total sales of contractors during the
 year.
 
 15. The Company has no proper supportings/evidences of machine hiring
 charges credited In the books, In the light of above we are unable to
 comment on Income of Machinery Hire Charges.
 
 16. Inter-Parties balances transferred are subject to
 confirmation/reconciliation.
 
 17. The Company has not paid/provided interest on unsecured loans
 because of insufficiency of profits and the same shall be provided in
 the year profits.
 
 18. An Amount of Rs. 30,03,500/- is shown as Advance from parties to
 whom no material was supplied during the current year. Further no
 confirmed orders or any other supporting available for supply of
 material, also no provision for interest is made in the financial year.
 
 19. The small scale undertakings (to the extent such parties have been
 identified from available informations) to whom amount outstanding for
 more than 30 days, where such dues exceeds Rs. 1,00,000/- are as
 follows:-
 
                                      As on 31/03/2002  As on 31/03/2001
 
 1. Estern Steel Industries                     356963            356963
 
 2. Proneel Technologies Pvt Ltd.               384800            384800
 
                                                741763            741703
 
 20. The Company has not made any provisions about deferred tax
 Liability/Assets as required by AS-22 Issued by the Institute of
 Chartered Accountants of India and the same shall be provided in the
 next financial year.