a.  Method of Preparation of accounts:
 
 Accounts are prepared on historical cost convention, in accordance with
 the normally accepted accounting principles.
 
 b.  Fixed Assets:
 
 Fixed assets are stated at their original cost of acquisition,
 including taxes, freight and other incidental expenses incurred in
 connection with the erection / commissioning / construction of the said
 assets, less accumulated depreciation.
 
 c.  Inventories:
 
 Inventories are valued at cost or net realizable, whichever is lower.
 
 d.  Depreciation:
 
 Depreciation is computed on straight-line basis in accordance with the
 provisions of Schedule XIV to the Companies Act, 1956.
 
 2.  The Company is a Sick unit and is before the Hon''ble BIFR in Case
 No.210/2000. The company has reached OTS with both the secured
 creditors and submitted a viable revival proposal to the Hon''ble
 BIFR.
 
 3.  Pending finalization of one time settlement with banks no interest
 was provided on principal outstanding loans from 01.04.2005 to
 31.03.2012.
 
 4.  Claims not accepted as debt by the company and pending in courts /
 appeals.
 
 a) Liability if any on alleged sale and leaseback transaction.
 
 b) Appeals against the Arbitration awards and Decreetal orders of the
 Learned Single Judge are pending before the Division Bench in the High
 Court Judicature at Madras
 
 c) Claim of Central Excise Department amounting to Rs.25.74 Lakhs
 pending in appeal.
 
 5.  The Company declared a Lay-Off with effect from December 06, 2004.
 Pending final settlement, no provision has been made in the books of
 account for terminal benefits like gratuity, bonus and leave
 encashment.
 
 6.  The term Loans from Industrial Development Bank of India and State
 Bank of Hyderabad are secured by joint equitable mortgage of land and
 buildings, hypothecation of plant & machinery and other movable assets,
 excluding book debts, and on the personal guarantee of some of the
 directors of the Company.
 
 a) The working capital loans from State Bank of Hyderabad are secured
 by a first charge on all goods, book debts and movable assets of the
 Company and on the personal guarantee of some of the directors. The
 working capital term loan is secured by a second charge on the fixed
 assets of the Company.
 
 b) SASF Cell (IDBI had accepted the OTS Proposal of the Company on
 18.06.2007 and also had accepted the down payment of Rs.15.00 Lakhs
 arranged by the Company. As such, the Company has not provided compound
 and penal interest on term loan for the year under review.
 
 c) Reportedly SBH has assigned its debt to ASREC India Ltd. on
 07.11.2006. Deutsche Bank being the power of attorney holders of ASREC
 had reached OTS with the Company on 02.03.2007. As such, the Company
 has not provided compound and penal interest on term loan from SBH for
 the year under review.
 
 7.  Redundant fixed Assets of Rs.96.19 Lakhs (approx) have been given
 to another EOU, after obtaining permissions from VEPZ / Central Excise
 authorities, on a returnable basis without any rental charges.
 
 8.  Claims made by the Company
 
 a) The claim filed by the Company against National Insurance Company
 before the Learned Addl. Chief Judge City Civil Court Hyderabad has
 been dismissed with costs and hence the - same is debited to statement
 of profit & loss during the year as exceptional item.
 
 b) Claim filed by the Company against the Revenue Divisional Officer,
 Nalagonda under National Highway Act 1956 US 3(a), 3(d) and 3(b) is
 pending for finalization.
 
 9.  No confirmations have been obtained for sundry creditors, debtors
 and other balances outstanding.
 
 10.  As regards to the compliance of provision relating to the dues to
 the small scale industries in terms of companies (Amendment) Act, 1999
 the company has sent letters to the creditors to confirm whether they
 are SSI Units. The company is yet to receive the confirmations from
 them. Hence, the company could not quantify the dues, if any, to the
 small-scale industries/ ancillary undertakings.
 
 11.  The company has not made any related party transaction during the
 Financial Year under review.  However the Outstanding balance of
 un-secured loan taken from the Managing Director as at March 31, 2012
 was Rs.l,15,01,829/-
 
 12.  Segment Reporting: The Company has not performed any operations
 during the year under review and hence Segment Reporting is not
 applicable.
 
 13.  Earnings Per Share: The Company has incurred a net loss of
 Rs.2,43,32,438/- during the year under review and hence EPS is not
 applicable.
 
 14.  Deferred taxation:
 
 Even though, the company has unabsorbed depreciation, carry forward of
 losses and adjustments under section 43 B of Income tax Act, 1961
 deferred tax asset as per the Accounting Standard - 22  Accounting for
 taxes on income issued by the Institute of Chartered Accountants of
 India, has not been recognized in the Books of account as the company
 is 100% EOU and eligible for tax exemption u/s 10A of income tax Act,
 1961 and also generation of sufficient taxable income in near future is
 uncertain. In view of the appeal preferred against the order of BIFR as
 detailed in Note No. 2 and also considering the fact that deferred tax
 assets are more than the deferred tax liabilities, no provision has
 been made in respect of deferred tax liability. Taking a more prudent
 view deferred tax assets have not been recognized in the books of
 account.
 
 16.  Aoditional information pursuant to the provisions of Paragraphs 3
 & 4 of Schedule VI to the Companies Act, 1956.
 
 17.  Previous year''s figures are rearranged or regrouped wherever
 necessary.
 
 18.  As there was no production ability no depreciation is charged for
 the year