1. a) Due to disconnection of power and shortage of raw material,
 coupled with management dispute, liquidity and labour problems, the
 operation of the factory at Sohana are under suspension w.e.f.
 01-01-2001 with labour laid off.
 
 b) In view of above physical verification of inventory and fixed assets
 could not be carried out during the year and is as per stores records
 and subject to reconciliation.
 
 c) Due to the inherent nature of the product, usability and
 realisability of Work-in-progriss can be determined only when the
 factory resumes production. Hence no provision has been made/considered
 necessary now.
 
 2. Accumulated losses of the company had exceeded its net worth and
 presently production facility are under suspension w.e.f. 01.01.2001
 but the company has no intention to close down the same. Consequently,
 these accounts has been prepared on the basis of going concern
 concept. As per the provisions of clause (0) of sub-section (1) of
 Section 3 of Sick Industrial Companies (Special Provision) Act, 1985
 reference has been made to BIFR.
 
 3. Oriental Bank of Commerce Greater Kailash II has filed a suit
 before the Debt Recover) Tribunal (DRT) DELHI for recovery of their
 dues, which is still pending.
 
 4. CONTINGENT LIABILITIES NOT PROVIDED FOR.
 
 a) Guarantee executed in favour of office of DETC-Sales-Tax, Gurgaon
 Rs.50,000/-(P.Y.Rs. 50,000/- against which margin of Rs.50,000/-(P.Y.
 Rs.50,000/-) kept with a Schedule Bank.
 
 b) Notice has been received from Sales Tax Department, Gurgaon
 regarding imposition of penalty for non-deduction of Sales Tax @2% on
 payments made to contractors in the financial year 1993-94 and
 1995-96. The claim is still being disputed before the Sales Tax
 Authorities.
 
 c) Demand/Penalty amounting to Rs. 881850/- deposited under protest
 with the Excise Department in pursuance of a raid conducted by them on
 21.09.1998 is still unascertained and disputed.
 
 d) Further Demand  penalty amounting to Rs. 88,31,026-as per order
 dated 24.08.2000 in pursuance of a raid conducted by them on 23rd
 September 1998 received from Excise Department not acknowledged as
 debts and is being disputed in appeal.
 
 e) Claim in respect of restatement of one employee whose services were
 terminated by the Company is under adjudication before the Labour Court
 Gurgaon (Amount not ascertainable)
 
 f) No provision for workers lay-off compensation has been provided as
 no claim has been made by any of the exemployee.
 
 g) Winding up petition was filed by M.S Sakhi Engineering Pvt. Ltd. in
 December, 1994 for recovery of Rs.12.5 Lacs along with interest @18%
 p.a. The case is presently adjourned sine-die, as the company has filed
 a reference with the Honble BIFR.
 
 5. As agreed by the depositors, no interest has been provided on Inter
 Corporate Deposit arid Loans.
 
 6. MANAGERIAL REMUNERATION.                     2004-05         2005-04
 
 Salary & perquisite                                 NIL             NIL
 
 7. PAYMENT TO AUDITORS.
 
 Audit Fees (including Service Tax)               10,800          10.800
 
 8. SEGMENT REPORTING.
 
 As there has been no business activity during the year, the disclosure
 requirements of Accounting Standards (AS 17) Segment Reporting,
 issued by the Institute of Chartered Accountants of India, are not
 applicable.
 
 9. RELATED PARTY DISCLOSURE.
 
 Disclosure as required by Accounting Standard on Related Party
 Disclosures (AS 18) issued by the Institute of Chartered Accountants
 of India are given here under :-
 
 A. RELATED PARTIES                      NIL
 
 B. ASSOCIATES                           NIL
 
 C. KEY MANAGEMENT PERSONNEL
 MRS KAMINT KHANNA
 SH. SK. LAIN (NOMINEE HFC)
 SH. V.K. CHADHA
 SH PREM SHANK.ER
 SH. PREM BALLABH
 
 D. TRANSACTIONS WITH RELATED PARTIES:     NIL
 
 10. EAR1NGING PER SHARE (EPS) (4.57)
 
 11. Since the manufactring operation of the company remain closed
 during the year, depreciation on fixed assets amounting to Rs.24.45
 (P.Y. 27.75 lacs) and till date Rs. 105.89 lacs has not been provided.
 
 12. DEFERRED TAX LIABILITY
 
 As required by Accounting Standard on Accounting for taxes on income
 (As 22) issued by the Institute of Chartered Accountants of India,
 provision for defered tax liability has not been made as the management
 does not foresee any immediate revival of operations/earnings in the
 near future where the deferred tax assets can be realized against
 future taxable income. Therefore. the accounting of deferred taxes has
 not been done.
 
 13. Earning in Foreign Currency               YEAR ENDED     YEAR ENDED
                                               31-03-2005     31-03-2004
 
 Export Sales                                         NIL            NIL
 
 14. Value of Imports Calculated on                   NIL            NIL
 CIF basis Raw Material-Chemicals
 
 15. Debit and Credit balance are subject to confirmation/reconciliation
 
 16. Interest on loans from financial institutions and banks is being
 provided for on estimate basis in the absence of statements and
 confirmations from banks/financial institutions.
 
 17. Previous years figures have been re-grouped/re-arranged wherever
 considered necessary, to make them comparable with those of the current
 year.
 
 18. The schedule referred to in Balance Sheet and Profit & loss
 account form an integral part of accounts.