Prominent Notes: - Securities and Exchange Board of India

16. Our Company is dependant on limited number of suppliers for our power and fuel requirements.
We have significant power / fuel requirements for our furnances in our existing and New Project. These
include electricity, furnace oil and / or gas and we are dependent on limited number of external
suppliers for the same. Further we are yet to enter into definitive arrangements for power and fuel
requirements for our New Project. Failure on our part to enter into definitive arrangements or failure of
the supplier to deliver the desired quantity and quality supplies at the required time may adversely
impact the business, result of operations and financial condition.
17. There has been a decline in profits for the Financial Year 2008-09.
For the Financial Year ended 2007-08, the Profit as per restated Proft and Loss Account was ` 245.93
Lacs. However, the same declined to ` 226.62 Lacs (on consolidated basis) for the Financial Year
2008-09.
18. Failure to obtain or maintain pre-qualifications from customers or loss of our pre-qualified status
from our existing customers could adversely impact our business.
Majority of our customers require forging manufacturers to undergo pre-qualification processes. These
processes evaluate both the technical ability to provide relevant products with the exact specifications
needed by the end-user, and the production capabilities of the supplier. These processes generally take
time to complete and involve our incurring significant up-front expenses in learning and meeting
customer qualification requirements. We continuously strive to retain our pre-qulification status as
approved suppliers, with the existing customers. Our failure to obtain pre-qualifications from newer
customers or loss of our prequalified status from our existing customers could have an adverse impact
on our profits, results of operations and cash flows.
19. Our business is dependent on our continuing relationships with our customers, with whom we have
not entered into long term arrangements.
We do not have long term arrangements with any of our customers to purchase our products in the
future, at the current prices or at all. There is no assurance that we will be able to maintain historic
levels of business from the existing customers or to retain the existing customers, or that we will be
able to replace our customer base in a timely manner or at all, in the event our existing customers do
not continue to purchase products manufactured by us. Such loss of customers may have an adverse
effect on our revenues, cash flows and operations, including an interruption or partial or total work
stoppage at our manufacturing facilities.
20. We have high working capital requirements and we may not be able to raise the required capital for
future orders.
Our business requires a large amount of working capital, used primarily to finance the purchase and
processing of raw materials before payments are received from customers. Our working capital
requirements may increase if, under certain orders, payment terms do not include advance payments or
such orders have payment schedules that shift payments toward the end of the order or otherwise
increase our working capital burdens. In addition, our working capital requirements have increased in
recent years because we have undertaken a growing number of orders within a similar timeframe and
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resulted, in increases in our working capital needs.
Our ability to arrange financing and the costs of capital of such financing are dependent on numerous
factors, including general economic and capital market conditions, credit availability from banks,
investor confidence, the continued success of our current projects and other laws that are conducive to
our raising capital in this manner. Our attempts to complete future financings may not be successful or
on favourable terms, which may adversely impact our profits, results of operations and cash flows.
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