1. a. The company has suspended all its operations and activities
 April, 1996, yet the accounts have been prepared to taking into
 consideration the going concern method.
 
 b. Union Bank of India only bank to the company filed a civil suit for
 recovery of their dues at Bombay High Court against the Company.
 Subsequent to the arguments by plaintiff and defendant (i.e. the
 company), the court as appointed a Receiver to take possession of the
 factory and take necessary steps for execution of the order by the
 court.  Accordingly the Receiver took possession of the factory on
 13.7.98 in presence of Mr.Atul N.Modi and Mr.Robert, representative of
 the Company authorised to hand over the possession.
 
 2. Contingent Liabilities
 
 a) Counter Guarantees given by the Company to the bankers against
 guarantees given by it on behalf of the Company Rs. 17,800/- (Previous
 year Rs. 17,800/-).
 
 b) Estimated claims against the Company, not accepted as debts Rs.
 55,80,678/- (Previous year Rs. 55,80,678/-).
 
 c) Corporate Guarantees given by the Company to Banks/Institutions on
 behalf of other Companies Rs. 51,46,39,447/- (Previous Year Rs.
 51,46,39,447/-).
 
 d) Provision for interest accrued and due for Secured Term Loan and
 Funded Loan from UBI has been made by the management on the basis of
 its estimated liability for payment of such interest as no
 communication of the Amount of interest payable has been received from
 the bankers in view of the litigation pending before Bombay High Court.
 
 e) Provision for interest towards Cash Credit A/C of industrial Bank
 has been made on an estimated basis though the bank has claimed
 interest at a higher rate as per their letter letter Dated 22/12/97
 which is disputed by the Company and not provided for.
 
 f) The Company has received cash subsidy of Rs. 25,00,000/- upto 31st
 March 1996 under the special Capital incentive 1988 Scheme.  The same
 has been added to Capital Reserve.  This subsidy is granted on
 fulfillment of certain usual condition imposed by the Maharashtra State
 Government under the above named scheme.  The Capital Subsidy becomes
 repayable to the government of Maharashtra as such conditions are
 breached.  However no such claim has been made by the Government of
 Maharashtra as yet.
 
 3. The Company has not accounted the following on accrual basis.
 
 a) Interest on loans given as per Schedule H to the Balance Sheet.
 The effect there of cannot be ascertained.
 
 b) Insurance has not been taken for the Fixed assets as per the loan
 agreement with bank any loss accounted of non-insurance cannot be
 ascertained.
 
 c) Provision for Electricity charges are made upto October 1996 only.
 
 d) Provision for rates and taxes payable on vehicles.
 
 4. No tax provision has been made in view of there being carried
 forward losses.
 
 5. Unclaimed `Share Application monies Rs. 6,07,60.20 are still lying
 in the Share Application Refund a/c as on date.
 
 6. Balance on Debtors, Creditors, Acceptance, Loans, Advances and with
 the scheduled banks on share application money account are subject to
 confirmation & reconciliation, if any.