1. Due to the absence of manufacturing activity there is no Sales
 during the period.
 
 2. Their is disputed Liabilities towards Income Tax and  Sales Tax
 amounting to  Rs.42,04,009/- and Rs. 5,80,93,966/-respectively,
 against which the Company has filled appeal with appropriate authority.
 
 3. The Company is in default to re-payment of NCDs/ZCBs amounting to
 Rs. 19,07,973/- and the interest of Rs. 12,66,433/-thereon.
 
 4. Liabilities in respect of various court cases pending against the
 company is unconfirmed/unsettled and unascertainable. Hence, no
 provision has been considered necessary. However, the accounts have
 been prepared on going concern basis and the liability in future, if
 any, would be accounted for in the year of demand.
 
 5. Prior period expenses amounting to Rs. 1,27,000/- have been charged
 to the profit and loss accounts under the head listing fee, unpaid for
 last three years .
 
 6. The company has not accounted for penal interest on delayed/non
 payment of secured and unsecured loans from U.P.F.C and Banks which is
 uncertainable due to non-availability of statements from the concerned
 parties.
 
 7. The amount Rs. 7,19,815/- of Advance Income Tax under the head
 CURRENT ASSETS, LOANS & ADVANCES has been adjusted with same amount
 outstanding in Income Tax payable under the head CURRENT LIABILITIES &
 PROVISIONS.
 
 8. Balance of some of the Creditors,  Advances and loans are subject
 to confirmation and adjustments, if any.
 
 9. Loan from U.P.F.C. amounting to Rs. 60,00,000/- (previous year-
 Rs. 60,00,000/-) and interest thereon is secured by Fixed Assets,
 Plant and Machinery and personnel guarantee of Directors/Promoters and
 corporate guarantee by Paam Pharmaceuticals (Delhi) Ltd. to the extent
 of Rs. 150 Lacs. However, short term loan of Rs. 1,45,00,000/-
 (previous year- Rs. 1,45,00,000/-) and interest thereon and bank loan
 of Rs. 1,97,00,741/- (previous year- Rs. 1,97,00,741/-) and interest
 thereon which was secured by hypothecation of raw material, finished
 goods, stores and book debts has been treated as unsecured due to
 NIL stock in trade and debtors.
 
 10. Since there is no profit for the year, therefore provision of Sec.
 349 of Companies Act, 1956 does not apply.
 
 11. In the opinion of the Board of Directors and to the best of their
 knowledge and belief the value of realisation of loans, advances and
 current assets could be less than the amount at which they are stated
 in the balance sheet.
 
 12. Balance of some bank accounts are subject to confirmation and
 reconciliation.
 
 13. No provision for taxation for the current year has been made due
 to the absence of taxable income.
 
 14. Previous year figures have been regrouped/re-arranged/
 re-scheduled wherever necessary to make them comparable.
 
 15. In some cases, provision of interest to bank and financial
 institution has been made on an estimated rate of interest.
 
 16. The company made a reference to the BIFR under SICA on 15-9-99
 which was rejected by the BIFR. Against such order of the BIFR, the
 Company made an appeal to the AAIFR and the order of the BIFR
 rejecting Companys reference was reversed. The AAIFR has directed the
 BIFR to reconsider the reference afresh on merits. During the year two
 hearings has been held before the Bench (B.I.F.R) on 2-8-2001 and
 19-12-2001. Final order of the Bench Dated: 26th March, 2002, held
 that the Company does not qualify to be an Industrial Company with
 in the meaning of section 3 (1)(o) read with section 3 (1)(e) & (f) of
 the Sick Industrial Companies (Special Provisions) Act ,1985 (SICA).
 
 17. Income Tax Assesment in respect of Assesment year 94-95,95-96,98-99
 the demand aggregate Rs. 42.04 Lacs against which a provision of
 Rs. 82.24 Lacs, has been made.The amount of excess provision made,
 written back to the Profit & Loss Accounts (Other Income).
 
 18. According to the pursuant of Section 211(3A) of the Companies, Act
 1956 and Accounting Standards -18 (Releted party disclousures) their
 are two releted parties and the required disclosers are as under:-
 
 Name                          Nature of                     Transaction
                               Relations                 during the year
 
 M/s. Paam Pharmaceuticals     Associates Company    Rs. 1,16,736/-(Cr.)
 (Delhi) Ltd
 
 M/s. Paam Drugs &             Associates Company                    Nil
 Pharmaceuticals Ltd.
 
 Name                                                            Balance
                                                             outstanding
 
 M/s. Paam Pharmaceuticals (Delhi) Ltd              Rs. 16,87,525/-(Cr.)
 
 M/s. Paam Drugs & Pharmaceuticals Ltd.            Rs.1,12,13,124/-(Dr.)
 
 
 19. According to the notification of Govt. of India, dated 22-5-2002
 that, there is non of the parties are SSI undertaking under Sub
 heading Current Liabilities & Provisions.