2) No provision has been made of doubtful debts in respect of sundry debtors for Rs. 3,89,91,736/- (Prev.Yr.Rs. 4,41,91,736/-), Advance for capital goods Rs. 2,08,11,349/- (P.Y.Rs. 2,08,11,349/-), as the company is hopeful of recovering the same. As a result of which the loss for the year and accumulated losses are understated and respective assets are overstated to the extent of Rs.5,93,03,085/- (P.Y.Rs. 6,50,03,085/-).

3) No Provision has been made for penal interest and liquidated damages on overdues on account of lease transaction in cases where the term of lease has expired amount not ascertained. The same are accounted on payment basis except in case of Industrial Finance Corporation of India Limited.

4) The company's current years loss amounting to Rs 48,63,00,170/- (Previous year Rs. 9,97,56,885/-) together with accumulated losses of Rs.2,58,21,19,432/- upto 31.03.2009 (without considering the effects of the above note nos. 3 & 4 has resulted in erosion of total net worth of Rs. 8,52,79,239/- comprising of paid up capital of Rs. 3,94,70,800/- and free reserves Rs. 4,58,08,439/-. The above losses are mainly due to interest, finance charges and depreciation. As at 31.3.2010, the current liabilities have exceeded the current assets by Rs. 1,51,32,02,106/- & the total liabilities have exceeded total assets by Rs. 2,98,31,40,363/- (without considering the effects of note nos.

5) The company had made reference under section 15 of the sick Industrial companies (Special provisions) Act, 1985 to the Board for Industrial & Financial Reconstruction (BIFR) in May 1999 and declared sick industrial company u/s. 3(1) (0) of the said Act vide order dated 29/6/2001 and instructed the operating Agency (OA) (Industrial Finance Corporation of India Ltd.) to interalia explore measures for rehabilitation . Pursuant to this, the company has already submitted a proposal for rehabilitation to the operating Agency which is under consideration. The company's ability to continue as a going concern is mainly dependent upon the approval of the said rehabilitation proposal and pending necessary approval the accounts have been prepared on the basis of going concern.

6) a). During the year, the SICOM Ltd. has accepted the One Time Settlement(OTS) offer of the company for Rs.23,46,000/- against total dues payable towards balance term loans of Rs.92,00,000/- and interest/penal interest payable of Rs.11,61,44,192/- as per company's books of accounts, aggregating to Rs. 12,53,44,192/- and SBI Capital Mkts Ltd. has also accepted the One Time Settlement(OTS ) offer for Rs. 15,43,250/- against total dues payable towards Hire Purchase and Lease Agreement of Rs. 2,19,48,123/- as per company's books of accounts and accordingly the balance amount aggregating to Rs.14,34,03,065/- of both the parties has been written back during the year and shown as exceptional items in the Profit & Loss A/c.

b) During the year 2007-08, company's proposal for One Time Settlement (OTS) with IFCI Ltd. has been agreed to for Rs.3,38,52,000/- vide letter dated 12th December, 2007 subject to fulfillment of the stipulated conditions. As per the said letter, the OTB should have been completed by 30th June, 2000. Draft Rehabilitation Scheme(DRS) has been submitted to BIFR through IFCI Ltd., who is the Operating Agency (OA) and the approval of the same is awaited. Pending the approval of the said DRS and fulfilment of the stipulated conditions, the effect of the OTS has not been given in the financial statements. Accordingly, interest and penal interest for the year has been provided on outstanding dues, as per the original terms of the loan agreement entered into by the company with IFCI Ltd.. The total outstanding liability to IFCI Ltd. towards principle and interest upto 31st March, 2010 as per books of accounts aggregating to Rs. 303,43,05,373/-.

7) GRATUITY :

As per Accounting Standard-15 (Revised) issued by the Institute of Chartered Accountants of India for accounting of the employee benefits, the provision for gratuity has to be made as per actuarial valuation. However, the Company has made provision for gratuity on estimates basis amounting to Rs. 13,477274/-( prev. year Rs. 12,31,255/-).

8) LEAVE ENCASHMENT :

Accounting Standard-15 (Revised) issued by the Institute Chartered Accountants of India for accounting of the employee benefits, the liability towards encashment of accrued leave payable to employee has to provided as per actuarial valuation. However, the company has made provision on estimates basis amounting to Rs.4,91,193/- (P.Y.Rs.4,11,582/-).

9) Disclosure requirements as per Accounting Standard 18 (AS-18) "Related Party Disclosure" issued by the Institute Of Chartered Accountants of India.

i) Enterprises under common control of the Promoter : Jay Iron and Steel Industries Ltd., Zenith Capital Ltd., Matrushree Finance & Investments Pvt. Ltd, Zest Iron Agencies Private Limited and Dara Trading & Finance Private Limited.

10) Segment Reporting :- There are no separate reportable segments as per Accounting Standard on Segment Reporting (AS - 17) as the company s primary business is of manufacturing Galvanised Pipes and M.S. Pipes.

11). As per Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, where an enterprise has unabsorbed depreciation or carry forward of losses under the laws, deferred tax assets should be recognised only to the extent that there is virtual certainty supported by convincing evidence against which such deferred tax assets can be realised. As there is no reasonable certainty that future taxable income will be available against which such deferred tax assets can be realised, no deferred tax asset has been recognised.

12). The Company was entitled for sales Tax under the Package Scheme of Incentives 1933, of Government of Maharashtra and has been granted the same vide letter No. DCK/INC/1989/ deferral/EC/175/164 dt.30.09.56 of Development Corporation of Konkan Ltd. for the period from 01.04.86 to 31.03.93. It has obtained the benefits by ways of Sales Tax Deferral (interest free Sales Tax) upto 11.08.1989 and availed the total sales tax loan Rs.5.32,762/- which is repayable in six equal annual installment from the expiry of 12th year.

13) The balances of sundry debtors, creditors, deposits, secured loan, unsecured loan, loan and advances and dues to secured creditors are subject to confirmation, reconciliation and consequential adjustment.

14) The Company is in the process of assessing impairment in the carrying amount of Fixed Assets as required by Accounting Standard-28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. The provision for impairment loss if any shall be made on completion of the said assessment.

15) The Company had closed its operations at Vikramgadh factory since May'1999.

16) In the opinion of board subject to Note No.3,4 & 6, the current asset, Loans and advances are approximately of value stated, if realised in the course of business the provision for all determined and known liabilities are adequate and not in excess of the amounts reasonably required.

17) In the absence, of any information from supplier regarding the status under Micro, Small and Medium Enterprises Development Act, 2006 amounts due to such enterprises have not been disclosed separately under Sundry Creditors and as such the provisions for interest on the same as required by the said act has not been provided for. However the management does not expect any material liability towards the same.

18) The Company does not have a whole-time Company Secretary as required by sec. 383 A of Companies Act, 1956. Management is taking necessary steps in this regard.

* The above production does not include goods produced on job work basis, (refer item D below).

19). The figures of previous year have been regrouped, rearranged and reclassified wherever considered necessary.