1.  Despite accumulated losses resulting in entire erosion in the net
 worth, the accounts are prepared on the basis of application to a
 Going Concern, as in the opinion of the Directors, with the proposed
 implementation of the Revival plan which has been submitted to the
 financial institutions and with expected increased utilisation of its
 production capacity, the company would be able to turn around and hence
 profitability, Further the Directors do not expect any shortfall in
 value of assets on an aggregate basis.
 
 2. Contingent commitments on warranty and free service claims in respect    of gensets /multi purpose
engines sold during the year have not been provided for in the accounts since the same is not ascertainable.
 
 3. The provision for payment under Bonus/Gratuity Act are not presently applicable to the Company for the
period under consideration.
 
 4. In respect of Materials lying in Customs Bond the demurrage arising
 therefrom has not been provided in the accounts since the same is not
 ascertainable.
 
 5. PROJECT EXPENDITURE:
 
 Expenditure incurred on Refused Derived Fuel (R.D.F) Project totaling
 to Rs.37,17,737,05/- has been written off during the year after adjusting a sum of Rs.47,00,000/- being the
amount recoverable from
 the project developer on the project being abandoned during the year.
 
 6. The Directors' have waived the sitting fees during the period.
 
 7. The balances under the head Sundry Debtors, Sundry Creditors, Loans
 & Advances and Deposits are as per books of accounts and subject to
 confirmation by the parties and reconciliation if any.
 
 8. The figures for this year is for a period of 18 months from 1st
 April 1996 to 30th September 1997 and hence, not comparable with
 previous year figures which is for 12 months.
 
 9. The term loan is secured by creation of Equity Mortgage on the immovable property of the company situated
at PIPDIC Industrial Estate, Pondicherry and at Kilkarani Village Chengalpattu District and movable Plant &
Machinery, spares, tools, accessories and other movables, both present and future (save and except Book
value) and is subject to the prior charge created or to be created by the company in favour of its bankers on
the Company's stocks of the rawmaterials, semi finished goods and consumable stores, Book-debts and such other
movables as may be specifically permitted to secure its working capital.
 
 10. Working capital from bankers are secured by hypothecation of Raw materials and work-in-process, finished
goods and book debts on pari-passu basis and also secured/to be secured by second charge on the fixed assets
of the Company. Further, secured by the personal guarantee of the Chairman of the Company.