2. In the opinion of Board of Directors, Current Assets, Loans and Advances have been valued at least equal to the amount at which they are stated in the Balance sheet, if realized in the ordinary course of business and same are subject to confirmation.

3. No provision for gratuity has been made as none of the employees have put in requisite period of service for the entitlement of this benefit.

4. In view of the loss of the current year and higher depreciation allowable under Income Tax Act no provision for Income Tax is done for the current year.

5. Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs. 1,07,00,000/-.

6. In view of the loss Managerial remuneration is not paid..

7. Shares of Shriram Co-op bank of Rs.20,550/- are kept in lien with the bank.

8. No provision is made in accounts in respect of liability for Excise duty of Rs.4,70,681/- as the same is contested by the company in the appeal and the company is of the opinion that the same will be decided in favor of the company.

9. The company has received an intimation u/s.143 (1) (a) of the Income Tax Act for Asst. yr. 1997-98 demanding Rs.8,38,802/- out of which TDS has been adjusted and a demand of 4 lacs is still pending. No provision is made in the accounts for the demand and interest.

10. Inventory is as per inventory taken, prepared, valued and certified by the Managing Director.

11. Damaged goods are valued at estimated value by management and is stated at the same amount as stated in the accounts last year.

12. Interest on Unsecured Loans in as far as current year is concerned has not been provided for Group Companies and certain other parties. This has resulted in understatement of liability by Rs. 11,64,000/-for the current year Rs. ll,64,000/-for the earlier year over and above Rs. 1,59,89,936/- as mentioned in note no. 13 to the accounts for the year ended 31.3.99.

13. Term loan is secured by First Mortgage and charges all the immovable assets of the company, both present and future ranking pari passu with the charges created in favor of Oriental Bank of Commerce (subject to prior charges of specified movable created in favor of banks for borrowings for working capital) and further secured by personal guarantees of Managing Director and his relative.

14. Working capital loans are from bank are secured by Hypothecation of Stock of Raw Material, Stock in process, Finished Goods, Stores & Spares and further secured by personal guarantee of Managing Director and his relatives.

15. The company has defaulted in payment of installments of Term loan and interest and all of the institutions have recalled the entire amount and hence the amount payable towards term loan within a year is not ascertainable.

16. Interest on Secured Loans has not been provided, as the Company hopes to get interest concessions from Banks/FIs and feels that the present provisions shall be sufficient. As a result of non provision of interest for the current year, the Liabilities are understated and profit overstated by Rs. 5,04,95,440/-

17. No provision has been made in the accounts for Doubtful debts as the recovery proceedings and legal actions are in process as the extent of doubtfulness is not ascertainable.

18. Other additional Quantitative information as required by para 3,4 C of Part II of Schedule VI of the Companies Act, 1956 has not been given as the same are not applicable.

19. Additional information pursuant to the provisions of part IV of Schedule VI to the Companies Act, 1956 is as per annexure " R ".