The Directors present the Fortieth Annual Report together with the
 Audited Accounts for the year ended 31 st March, 2007.
 
 1.  FINANCIAL RESULTS
 
                                                       Rs. in lacs
 
                           2006-2007     2004-2006       2004-2006
                         (12months)   (Annualised)      (18months)
 
 Sales                     9882.68        7771.31       11656.97
 Profit/(Loss) before 
 Interest, Depreciation 
 and Tax.                  1802.73        1310.29        1965.43
 Interest and 
 Finance Charges            662.34         505.89         758.83
 Profit/(Loss) 
 before Depreciation 
 and Tax                   1140.39         804.40        1206.60
 Depreciation               341.25         341.44         512.16
 Profit/(Loss) before Tax,  799.14         462.96         694.44
 Expenditure associated 
 with Kalwe division 
 (including depreciation)  (444.88)       (493.57)       (740.36)
 Expenditure on 
 Legal Matters              (80.04)        (26.82)        (40.23)
 Surplus on Settlement of 
 Loans/Fixed»Deposits2        3.51          12.17          18.26 
 Provision for Taxation     (11.00)         (9.59)        (14.38)
 Profit/(Loss) afterTax,    266.73         (54.85)        (82.27)
 PriorYear/Period
 Adjustments,               (33.84)          -           (136.97)
 Balance brought forward (18431.82)                    (18212.58)
 Profit/(Loss) carried 
 to Balance Sheet        (18198.93)                    (18431.82)
 
 Shown separately as the Kalwe division is inoperative since 29th May,
 2004.
 
 * Comprises of costs related to the Scheme of Arrangement with
 lenders/creditors, BIFR Rehabilitation Scheme and arbitration with SPS
 Technologies, USA/Others.
 
 2.  DIVIDEND
 
 On account of the Companys substantial indebtedness and repayment
 obligations, the Directors are unable to recommend payment of dividend.
 
 
 10.  FIXED DEPOSITS
 
 As on the date of this Report, outstanding fixed deposits from the
 public aggregate to Rs. 410.00 lacs. All fixed deposits are due and
 repayable.The Rehabilitation Scheme to be submitted- to BIFR for
 approval will provide for the repayment of fixed deposits.
 
 11.  DIRECTORS
 
 Mr. Sanjay Brar and Mr. H. B. Bhavsar retire by rotation at the
 forthcoming Annual General Meeting and being ineligible under Section
 274 (1)(g) of the Companies Act, 1956, do not offer themselves for
 re-appointment.
 
 Mr. D. S. Lodha was appointed as Additional Director designated as
 Managing Director-cum-CEO w.e.f.  16th January, 2008. He holds
 office until the conclusion of the ensuing Annual General Meeting and
 being eligible, offers himself for re-appointment.
 
 Mr. S. C. Roongta, Wholetime Director & Company Secretary, resigned
 from the Board and as Company Secretary on 21st January, 2008.
 
 12.  AUDITORS AND AUDITORSREPORT
 
 M/s. Haribhakti & Company, Chartered Accountants, retire at the
 forthcoming Annual General Meeting and being eligible.  offer
 themselves for re-appointment.
 
 Managements response to the observations of the auditors on the
 financial statements for the year under review are as follows:
 
 - As regards Point No. 4 (I) (a) of the Auditors Report regarding
 non-provision of interest on Loans and Statutory Dues, management would
 like to clarify that the debt restructuring package of the Company has
 been principally approved by its principal lenders and creditors.The
 debt restructuring is to be implemented by way of a BIFR Rehabilitation
 Scheme, which is being.prepared in consultation with the Operating
 Agency. The debt restructuring package incorporates several reliefs and
 concessions including but not limited to the waiver of interest on long
 term debt from the cut-off date i.e. 30th June, 2004.  Hence, interest
 on secured arid unsecured debt, other than Fixed Deposits and current
 Working Capital assistance, has not been provided on the loans that are
 to be restructured. With respect to Statutory Dues, since these are
 also expected lo be restructured in line with Secured and Unsecured
 Loans through the BIFR Rehabilitation Scheme no interest has been
 provided in the accounts.
 
 - As regards Point No.4 (IV) (a) and (f) of the Auditors Report
 regarding the physical condition/valuation of stocks and fixed asset
 verification at the Kalwe plant, management would like to state that
 pursuant to the Settlement reached with the principal Employee Unions
 at Kalwe in November 2007, the unit is now fully accessible to it.
 However/due to the non-availability oi power at the unit, it is not
 practicable to carry out an exhaustive examination of stocks and fixed
 assets available there though these have been outwardly verified. Based
 on the verification carried out, there does not appear to be any
 permanent impairment to fixed assets. Nevertheless, all equipmeni.will
 require overhauling. Certain inventories have also suffered degradation
 and will need to be re-worked. During the course of re-working
 inventories, some permanent impairment may be. encountered but the
 extent of such impairment is not likely to be substantial. Management
 expects to undertake salvaging actions in respect of both stocks and
 fixed assets at the time of or immediately upon relocating these items
 as per the Companys impending Rehabilitation Scheme. .Only on
 completion of these actions will it be possible to arrive at the exact
 impact, if any, on the carrying values of stocks and fixed assets.
 Until then, management has deemed it fit to reflect these items at
 their original book values and has represented as such to the Auditors
 
 The other observations made by the Auditors in their Report are either
 self-explanatory or explained in the Notes on Accounts.
 
 13.  DIRECTORS RESPONSIBILITY STATEMENT
 
 As required under Section 217 (2AA) of the Companies Act.  1956, the
 Board of Directors of the Company nereoy cot ilirms that:
 
 - In the preparation of the annual accounts, the applicable accounting
 standards have been followed and there have been no material
 departures.
 
 - The Company follows all mandatory Accounting Standards except
 Accounting Standard 2 on Valuation of Inventory.  Accounting Standard
 15 on Accounting oi Retirerneni* Benefits to Employees and Accounting
 Standard 29 on Disclosure of Provisions. Notes in respect of these
 have been given in the Accounts, whichre self-explanatory.
 
 - The Board selected and applied such accounting policies and made
 judgements and estimates that, are reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company as at 31st
 March, 2007, and of the Profit and Loss Account for the year ended on
 that date.
 
 - The Board made best efforts to maintain adequate accounting records
 in accordance with the provisions of the Companies Act, 1956, for
 safeguarding the assets of the Company and for preventing and detecting
 fraud and other irregularities.
 
 - The Accounts have been prepared on a going concern basis as the
 Company is under the purview of BIFR and expects to be rehabilitated.
 
 14.  CORPORATE GOVERNANCE
 
 A separate Report on Corporate Governance along with the Auditors
 Certificate on its compliance by the Company is included as a part of
 the Annual Report.
 
 The matters referred to in the Auditors qualifications on the
 Corporate Governance Report have been dealt with in the said Report and
 hence require no further explanation.
 
 15.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information pertaining to conservation of energy, technology absorption
 and foreign exchange earnings and outgo as required by Section 217 (1)
 (e) of the Companies. Act, 1956.  read with the Companies (Disclosure
 of Particulars in the Report of the Board of Directors) Rules, 1988, is
 given in Annexure A forming part of this Report.
 
 16.  PARTICULARS OF EMPLOYEES
 
 Information as per Section 217 (2A) of the Companies Act.  1956, read
 with the Companies (Particulars of Employees) Rules, 1975, forms part
 of this Report. However, as per the provisions of Section 219 (T.) (b)
 (iv) of the Companies Act, 1956, the Report and Accounts are being sent
 to Shareholders excluding the information relating to employees. Any
 Shareholder interested in obtaining such particulars may write to the
 Managing Director-cum-CEO, Mr. D. S. Lodha, at the Registered Office of
 the Company.
 
 
                                    On.behalf of the Board of Directors 	
                                                          SANJAYB.SHAH
                                                              Chairman
 Place: Mumbai
 Dated: 11th February, 2008.