(2) Contingent liabilities not provided for in respect of:

(a) The Company is contingently liable for principal dues, including penalty, fine etc. of Rs. 40.29 laces of excise duty against which Rs. 2,00,000/- have been deposited. The matters were pending at The Commissioner / Dy. Commissioner of Central Excise however finally such matters have been set aside and remanded back by such higher authority. Therefore the Company has strong belief that there would no liability at a later date.

(b) Demand raised by Commissioner of Income Tax, Ahmedabad in respect of disclosing the prior years (2000-01 to 2004-05) Income (Rs. 35.55 laces) (Out of which company has already paid and deposited Rs. 20 laces). Further, appeal for demand of Rs. 61.19 laces raised for the AY. 2006-07 , is pending with Commissioner of Income Tax. The company is of strong belief that there would no liability against the aforesaid assuagement years/ orders.

(3) Depreciation of Rs. 7,75,382/- (previous year Rs. 8,84,250/-) on Fixed Assets has not been provided during the year under review as the manufacturing operations are not going on.

(4) The Company has derived Working capital remission benefit of Rs. 3,25,53,999/-,on account of the fact that the said amount pertains to current assets and related to day to day operations, settlement with working capital bankers in earlier years. The said amount has credited to profit and loss account to present true and fair view as per decision taken by the management.

(5) The account of loans & advances and creditors are subject to balance confirmation and reconciliation.

(6) During the year the company has credited Rs. 6,35,54,836/- to Capital Reserve being capital remission benefit on account of Settlement with Term Lenders, debenture holders and un secured lenders.

(7) Employee Retirement Benefit : The proviso ion for Leave encashment and other retirement benefits are not required to be made on account of non completion of minimum period of service of the past employees and company has not employed any employee during the year.

(8) Advances recoverable are net off credit balances of Rs.5,20,77,550/-. ( Previous year Rs. Nil ).

(9) Other Income includes Loss on Commodity (Future) of Rs. 1,74,94,828/-, gain on account of One Time Settlement with Working Capital Lenders and sundry creditors Rs. 3,25,53,999/- and Rs. 16,15,298/- respectively and Misc. Balances written off Rs. 8,952/-

(10) Interest Income Rs. 86,60,534/- (Previous year Rs. 76,38,824/-) is net of interest expenses of Rs. 9,27,984/- (Previous year Rs. 66,02,221/-).

(11) (i) The Company believes that in view of carried forwarded loss and depreciation of past years there would be no taxable income, for the year under review and therefore no provision for taxation is required to be made in the accounts.

(ii) The Company has unabsorbed depreciation & carried forwarded losses under Tax laws. In absence of virtual certainty of sufficient taxable income net deferred assets has not been recognized during the year under review by way of prudence in accordance with Accounting Standard (AS) 22-'Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India. It is not out of place to mention that on account of net worth becoming positive, the correct situation would emerge in years to come.

(12) As per the Accounting Standard (AS) 18 - "Related Party Disclosure" the Disclosure is hereunder :-

(A) Associates Companies / Firms Nil

(B) Key Management Personnel

(1) Mr. Ramesh D. Solanki

(2) Mr. Pawan Agrawal

(3) Mr. Vinod C-Thakar

Note : During the year there was no transaction with the above referred personnel.

(13) There is only one activity during the year under review, therefore no reporting made as required under Accounting Standard (AS) 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India.

(14) During the year the company has not incurred any expenses and earned any earnings for which disclosure is required under 4D of part II of Schedule VI of the Companies Act, 1956.

(15) As per the provision of the section 383A of the Companies Act, 1956 the Company is liable to appoint the Whole time Company Secretary and the Company is in process of implementation of the same.