2. Attention is invited to Note No. 2 forming part of the notes annexed to the accounts for the year ended March 31, 2011, an un-provided liability of Rs 6450 Lacs and accured interest thereon, if any, is not acknowledged by the Company and hence, it is not provided in the books of account.

3. The Company does not remain a going concern since the secured lenders have sold all the fixed assets mortgaged to them and there is no definite source of income. However, the accounts have been prepared in the best possible manner on the basis of available information.

4. Attention is invited to Note No. 8 forming part of the notes annexed to the accounts for the year ended March 31, 2001. The said note referred to the adjustments made in the accounts for that year, as a result of which an amount of Rs 2463 Lacs then due to Global Trust Bank Limited (GTBL) and now merged and known as Oriental Bank of Commerce (OBC), (hereinafter referred to as "the said bank") in respect of unsecured debentures and the amount of Rs 2463 Lacs due by Sashak Nobel Metals Limited (SNML) were transferred to Killick Financial Services Limited (KFSL).

The said note also specifically stated that the said transfers were made in pursuance of Memorandum of Understanding entered into between the Company, the said bank and KFSL and the other Memorandum of Understanding between the Company, KFSL and SNM. The said MOUs have not been revoked so far.

Further, in month of June 2001, Global Trust Bank Ltd. has credited Company's account by Rs 565 Lacs . In terms of the said MOUs KFSL had agreed to allow the aforesaid amount due by Snowcem India Limited to the said bank to be adjusted against the security deposit of Rs 7400 Lacs agreed to be paid by the bank to KFSL in consideration of the latter company agreeing to execute sub-lease of the land in favour of the bank. We are informed by the KFSL that they have filed a suit against the bank for specific performance and damages

The said bank has called upon the Company to pay to it the aforesaid amount of Rs 2425 Lacs after adjusting a credit of Rs 565 Lacs towards the amount received by them for which the bank provided no details to the company. The said bank has also initiated proceedings against the Company in Debt Recovery Tribunal. The Company is contesting the proceedings and has been legally advised not to make any changes in the accounts till the final outcome of the proceedings is known. The said transfers were made in pursuance of the MOUs agreed to by the Board of the said bank and the Boards of respective companies. In terms of the said MOUs, the liability to the said bank has to be met by KFSL and the Company stands fully discharged of its liability. This stand of the Company finds support in the judgment of the Bombay High Court and Supreme Court in another similar matter. The Debts Recovery Tribunal has stayed proceedings against the Company as the Company is also registered with Board of Industrial and Financial Reconstruction (BIFR). The company also maintains that under various MOUs as referred to above the amount was to be appropriated against Company's liabilities from the consideration of the land sold and purchased by them.

5. Provision has not been made in the accounts:

(a) For disputed income tax liability in respect of various Assessment orders aggregating to Rs 2343 Lacs (Previous year Rs 2343 Lacs) . The appeals filed by the Company against relevant orders are pending before various authorities. Liability in respect of interest/penalty under Income Tax Act, 1961 will be accounted for as and when the orders are passed.

(b) For disputed Sales tax liability in respect of various Assessment Years aggregating to Rs 95.46 Lacs relating to West Bengal Territory. The company has preferred appeals, which are pending before the competent authorities.

6. The Company has not provided the following, in the books of accounts.

(i) Interest on overdue fixed deposit of Rs 1264.08 Lacs due from time to time, amount unascertained.

(ii) Interest on loan from MPSIDC of Rs 2800 Lacs and ADCB of Rs 250 Lacs . However, MPSIDC has made an aggregate claim of Rs 26518. 31 Lacs as on 31st March 2012, which is not acknowledged by the Company. Further there are no details available regarding the same.

7. a) In view of the liquidity crunch, the Company could not pay the matured FDs of Rs 1264.08 Lacs (Rs. 1270 Lacs ) and interest due up to maturity of Rs 246.50 Lacs ( 248 Lacs ) . Some of the FD holders have taken legal action and obtained orders from CLB regarding payment in installments. The Company has made all attempts to comply with the orders However, due to acute cash crunch, the Company could not fully comply with the orders of CLB as required under Section 58A (9) of the Companies Act, 1956. Accordingly, the CLB has directed the ROC of Maharashtra to take appropriate action in the matter, and the Company has submitted a scheme with Principal Bench of CLB at New Delhi, which is pending for its consideration. The total number of cases pending before various authorities are 6 aggregating to Rs 1.55 Lacs (previous year aggregating to Rs 1.55 Lacs )

(b) During the year, some of the Fixed Deposit holders approached the Company expressing their willingness to accept partial payment in full and final settlement of their dues. The Company has settled such claims for gross amount of Rs 7.82 Lacs during the current year, which has resulted in reduction of Company's liability to the extent of Rs 6.1 Lacs towards principal and Rs 1.72 Lacs towards interest, which were earlier provided to the accounts. The Company has been legally advised that after the settlement the Company's liability towards those deposit holders is fully extinguished and no claim thereafter is tenable and the same can be reversed in the books. Accordingly, Rs 0.06 Lacs , being the writing back of interest has been credited to profit and loss account and Rs 0.23 Lacs , being the reduction in liability of unsecured loan has been credited to FD Settlement account grouped under the Reserves and Surplus.

8 Some of the Sundry debtors, creditors, loans and advances and unsecured loans are subject to confirmation and re-conciliation.

9. The Company has fulfilled all the conditions referred to in the clarification No. 3/5/84 CLX dated 5- Dec.1984 given by the Department of Company Affairs to the Institute of Chartered Accountants of India with regard to treatment of subsidy received from the Government as "Free Reserve" as defined in the Rule 2(d) of the Companies (Acceptance of Deposits) Rules. In view of the said clarification, the amount of subsidy received by the Company is deemed to be part of Free Reserves.

10. The Company was declared a sick unit under section 3(1) (O) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA) on July 5, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). However, Fixed Assets have been sold by the secured lenders under the Securitisation and Reconstruction of the Financial Assets & Enforcement of Security Interest Act, 2002 (SARFESAI) and forwarded the intimation to BIFR. Appropriate order from Honorable BIFR is awaited.

11. As a prudent accounting policy, the Company has decided not to recognise Deferred Tax Assets on accumulated losses.

12. Previous year figures have been regrouped and/or rearranged wherever necessary.

Notes :

1) In the previous year Snowcem Products Lanka Pvt. Ltd. had agreed to buy back its shares at the face value. The refund has since been received . However, the proceeds are yer to be credited in Company's account by the Bank, pending certain formalities.The relevant information is as below -

2) National Saving Certificate is deposited with the government authorities since a long time and the same is not traceable.

2) The Company does not have any Managing Director as required under section 269 of the Companies Act, 1956 because the Company cannot pay remuneration as per the Schedule XIII of the Act. Hence, the Company is being managed by various Committees of the Directors for looking after day to day working. Total Directors Fees and Committees Fees paid during the year amounted to Rs. 2.6 lacs (Rs 3.36lacs).

3) The Board has approved the expenses for which requisite evidences/documents are not available on the records and has confirmed that these have been incurred in the normal course of business and out of business expediency.