OBSERVATION

Advances recoverable include an amount of Rs. 112 lacs due from corporate companies forwhich no provision has been made. However as per analysis of their net worth as perfinancial statements available the amounts are doubtful of recovery.

• RESPONSE

The Company is making efforts to realize the amount. Hence no provision has been madefor the advances.

OBSERVATION

No provision have been made for Income Tax Penalty of Rs 22.86 lacs the appeal ispending with Ho`ble ITAT

• RESPONSE

The Company has a strong case for favourbale decision by ITAT. Hence no provision hasbeen made.

OBSERVATION

Balances grouped under Sundry Creditors Advances from Customers and advancerecoverable are under reconciliation and subject to confirmation from respective parties.

• RESPONSE

The confirmation of balances is being received.

OBSERVATION

The Company has closed down its manufacturing operations w.e.f. 20.7.2004 under theprovisions of 6W to be read with 6V of U.P. Industrial Disputes Act 1947. The accountshave been prepared as a going concern of the fact the company has closed down itsmanufacturing operations and its entire net worth has been eroded.

• RESPONSE

The existing operations of the Company have been closed the Company's Board has notyet resolved not to start the any operations yet.

OBSERVATION

Trading of shares of the Company has been suspended by the stock exchanges because ofpenal reasons.

• RESPONSE

The Company has paid the arrears of listing fees to BSE. The process of revocation ofsuspension trading in securities is in process. Other regional stock exchanges where theshares of the Company are listed have either exited from the business of stock exchangesor are in the process of exiting.

1. CONSERVATION OF ENERGY

a) Energy conservation measures taken

The operations of the Company remained closed during the year and no energy wasconsumed.

Hence no measures were taken.

b) Additional investments and proposals if any being implemented for reduction ofenergy.

There being no energy consumption in view of closed manufacturing operations noadditional measures and proposals implemented for reduction of energy used.

c) Impact of (a) and (b) above for reduction of energy consumption and consequentimpact on the cost of production.

Not applicable.

2. TECHNOLOGY ABSORPTION Research and Development

a) Specific areas in which R&D carried out by the company.

The operations of the Company being closed no R&D activity was carried out.

b) Benefits derived as a result of above R&D

Not Applicable

c) Future plan of action.

Not Applicable

d) Expenditure on R&D

Not Applicable

3. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION.

a) Efforts made towards technology absorption adaptation and innovation.

Not Applicable

b) Benefits derived as a result of above efforts.

Not Applicable

c) Particulars relating to improved technology.

Not Applicable

4. FOREIGN EXCHANGE EARNINGS AND OUTGO a) Activities relating to exports:

As the manufacturing operations of the company remained closed no initiatives forexport were undertaken.

b) Foreign Exchange Earnings and Outgo