NOTES ON ACCOUNTS

A. ACCOUNTING POLICIES

1. Revenue/Income and Cost/Expenditure are generally accounted on accrual as they are earned incurred.

2. Fixed Assets are shown at cost less accumulated depreciation other than land where no depreciation is charged.

3. Depreciation on Fixed Assets is provided on Straight line basis at the rates specified from time to time in Schedule XIV to the Companies Act, 1956.

B. NOTES ON ACCOUNTS:

1. Contingent Liabilities not:

A. Counter Guarantees in respect of guarantees furnished by Bankers Rs.56,400/-

B. Unutilized letter of Credit Rs. Nil (Previous year Rs.Nil) C. Amount claimed in suits in respect of cases pending before the court by some of the creditors amount not determined.

2. a) In the opinion of the Board of Directors all the revenue expenditures, Depreciation and Interest relate to operational activity, Hence taken to Profit and Loss Account. The Company during the year has not made any efforts to pursue the Project Work, therefore no expenses are put to us.

b) All the items classified under expenditure during the construction relate to the project and it is therefore the intention of the Company to capitalize the same till the time the relative assets are put to us.

c) Fixed assets which are completed and/or put to use were capitalized including proportionate incidental expenditure incurred construction period.

3. Confirmation of Balances from all the creditors, Debtors and from persons to whom advances have been paid have not been obtained. In the absence of Balance confirmation the entries and other supporting records have been relied upon.

4. Stock of Demonstration Tools are compiled based on the records maintained and physical balance is however subject to confirmation.

5. Previous year figures have been regrouped/rearranged wherever necessary.

6. Additional information pursuant to paragraphs 3, 4, 4c and 4d of Part-II Schedule VI to the Companies Act, 1956.

i. Licensed Capacity : 1,05,000 (Nos. Tools per annum)

ii.   Installed Capacity		: 1,05,000 (Previous year 
                                          1.05.000 Nos. Tools per annum)

iii.  Production and Consumption of
      Raw material	                : Not compiled as Numerous 
                                          components are involved.

      Turnover - Tools & Spares	        : Rs. NIL Previous year Rs. NIL

v.    Purchase - Tools & Spares	        : Rs. NIL Previous year Rs. NIL

vii. Expenditure in Foreign Currency : Rs. NIL (Previous year Nil)

viii. Earnings in Foreign Currency : Rs. Nil (Previous year Nil)

ix. Remittance in Foreign Currency on : Nil (Previous year Nil) account of Dividends.

For Nataraj Iyer & Co. For Consortex Karl Doelitzsch (India) Limited Chartered Accountants

Sd/-		                   Sd/-	                      Sd/-
E.S. Ranganath	                   M. Sudhakar Rao	      V. Manohar
Partner	                           Managing Director	      Director