1.  The company has filed cases against the following debtors for which
 no provision is made;
 
 (a) Against M/S. Kansso Packaging Private Limited, the Company has
 obtained the decree and realised Rs. Nil.
 
 (b) Criminal complaint No. 923/M/98 against Mayank Corrugating
 Industries for Rs. 8.25,0007-
 
 (c) Criminal complaint No. 1689/M/98 against Kedia Paper Agency for Rs.
 2,79,5367-
 
 (d) Against M/S.  Andhra Pradesh Paper Mills Limited in Rajamundhry
 Court Andhrapradesh, for Rs.39,25,7047-. The Court has rulesd in favour
 of the Company and awarded Rs. 22,45,946.00. The Company has filed
 petition to recover the amount.
 
 2.  The company had been declared as Sick Industrial Company under the
 meaning of section 3(1) (O) of the Sick Industrial Companies Act, on
 16th March, 1998. B.I.F.R.  recommended liquidation of the Company vide
 its Order dated 13.06.2002.
 
 Subsequently, the Company with prior discussions with several lenders
 filed a rehabilitation scheme under section 391 of the Companies Act,
 1956 with the
 
 Mumbai High Court on 27.09.2003.  The petition was admitted and under
 the directions of the Hon able High Court, the meetings of all classes
 of Shareholders and lenders were held and the Company received the
 necessary approvals from them. The Registrar of the High Court has
 filed his report and the matter is pending in the High Court.
 
 3.  At present there is uncertainty about rehabilitation of the Company
 (Refer note No.  3). In view of this, of the company has not
 ascertained and provided for deferred tax Assets / Liability as
 required by accounting standard 22 issued by I.C.A.I..
 
 4.  The net worth of the Subsidiary Company Inter Fresh (Malaysia) SON
 BHD, Malaysia is negative and hence the Company has made necessary
 provision to cover possible losses.
 
 5.  Debtors include debts amounting to Rs 422.18 Lacs (Rs. 415.66 Lacs)
 which are outstanding for more than 6 Months and hence considered
 doubtful. The Company is in the process of taking necessary action for
 recovery of the aforesaid dues. Provision has been made only for Rs.
 63.36 Lacs in the books of accounts.
 
 6.  In the absence of confirmations in respect of balances of Sundry
 Debtors, Loans & Advances & Creditors, the balances have been taken as
 per the books of accounts and are subject to reconciliation and
 adjustments. The company is in the process of reconciling the above. No
 provision for interest on Inter-corporate loans has been made in the
 accounts and amount of interest is not ascertained.
 
 7. Inter Corporate loans of Rs. 60.22 Lacs taken by the company are
 secured against security of shares given by HMG Engineering Private
 Limited and HMG Trading & Investments Ltd.
 
 8.  The company is yet to redeem 50000 Non Convertible Debenture of
 Rs. 100/- each aggregating to Rs. 50,00,000/-, which was due redemption
 on 19th May 1997 and are not redeemed till date.
 
 9.  No Interest / Penal interest / liquidated damages payable on loan
 has been provided for in the Accounts.
 
 10.  Enforcement Directorate, Foreign Exchange Regulation Act (FERA),
 has initiated investigations of alleged FERA violation involving the
 company regarding non receipt of certain debtors amounting to US$
 1,62,835/- (Rs. 58,32,750/-approx) beyond the stipulated period and
 issued a show cause notice. Out of the total amount as above, a sum of
 US $ 37,7157- has been received by the company, while obtaining
 permission from Reserve Bank of India for writing off an amount of US $
 32,605/-.  The Enforcement Directorate levied on the Company a penalty
 of Rs. 6.50 Lacs against which the company has preferred an appeal.
 Enforcement Directorate issued a shoe cause notice for non realisation
 of Debtors to the extent of $ 4,99,036.34, beyond the stipulated
 period. The Company has filed its written reply, wherein it has been
 stated that the correct amount should be $ 2,57,967V; and had personal
 hearing in the matter. The Company is awaiting the order from the
 Department.
 
 11.  The net worth of Marvel Pharmachem. is negative. No provision for
 the shortfall in value of investment of Rs. 2.79 lacs is made.
 
 12.  The company has not made provision for dividend on the cumulative
 Preference Shares aggregating to Rs. 55.67 Lacs unto the date on which
 the Preference Shares had to be redeemed.
 
 13.  The details of suits filed against the Company for which no
 provision has been made in Accounts.
 
 (a) Alpha Group (Hong Kong) Ltd. has filed the Suit being No. A8463 of
 1995 as amended on 22nd April, 1997 in the Supreme Court of Hong Kong
 against the Company to recover US$ 81,200 approx. Rs. 29.07 lacs) being
 difference in the market price and the contract price for the supply of
 DOR
 
 (b) Indian Bank has filed a Suit in the High Court of Judicature at
 Bombay inter-atia against the Company for the recovery of Rs.
 6,21,865/= alongwith interest @ 22.25% from the date of filing of the
 suit i.e. 13/1/1997 until the date of payment.
 
 (c) Bank of Nova Scotia has filed a Suit on 5.7.97 in the High Court of
 Mumbai against the Company for the recovery of export credits amounting
 to Rs. 19,20,65,455/= together with interest @ 18% p.a. w.e.f. 1st
 July, 1997 until the date of payment.. Subsequently the case has been
 transferred to the Debt Recovery Tribunal where the Company has
 obtained a stay. The Mumbai High Court has also granted a stay vide its
 Order dated 01.07.2005.
 
 (d) LIC Housing Finance has filed a criminal complaint being case No.
 1108/S/98 under the negotiable Instruments Act for dishonor of cheque
 amounting to Rs. 18.50 Lacs.
 
 (e) State Bank of Hydrabad has filed a suit No. 127 of 2003 in the Debt
 Recovery Tribunal, Mumbai, for Rs. 25,30,79,102/=. The Mumbai High
 Court has granted a stay vide its Order dated 01.07.2005.
 
 (f) Calyon Bank, formerly known as Credit Agricole Indosuez has filed a
 suit being No. 239 of 1998 in High Court of Mumbai for recovery of Rs.
 3,35,12,941.17.  The Mumbai High Court has granted a stay vide its
 Order dated 01.07.2005.
 
 14.  In the absence of statements and confirmation of balance from
 Banks / Financial Institutions / Inter Corporate Loans, the balances as
 per the books of Accounts have been taken and the same are subject to
 adjustments and reconciliation. We are not able to express any opinion
 on the same.
 
 15.  (a) The company holds 100% share capital of its subsidiary
 company, Marvel Pharmachem Limited, and the loss of this subsidiary
 company is not dealt with in the books of account of the company.
 
 (b) The company holds 60% share capital of its subsidiary company
 Inter-Fresh Meat Centre SON BHD, incorporated in Malaysia. The
 profit/(loss) of this subsidiary company is not dealt with in the books
 of account of the company.
 
 16.  (a) (i) The Income Tax & Wealth Tax Assessments have been
 completed upto
 Assessment Year 1997-98. No intimation has been received from the
 Income Tax authorities in respect of assessment year 1998-99 and
 1999-2000.  In respect of Assessment year 1991-92 and 1992-93 the
 outstanding demand as on 31.3.2001 is Rs.71,49,000/-which is disputed
 in appeal by the company.
 
 (ii) In respect of Assessment year 1994-95 the outstanding undisputed
 principal demand is Rs.81,11,579. No provision has been made for the
 above amounts in the books of account..
 
 (b) No provision for Income Tax is considered necessary in view of the
 past losses, and Company is declared as SICK Industrial Company U/s
 3(1) (0) of the Sick Industrial Companies Act,
 
 (c) The Sales Tax Authorities has raised demand aggregating To Rs. 1260
 Lacs upto assessment year 1998-99. This includes principal and interest
 and penalties.  The company has neither accepted the liability, nor was
 in a position to go in appeal. The Company has made provision of Rs.
 422 Lacs and is exploring avenues of preferring an appeal..
 
 17.  Advances to Suppliers (Frozen Food Division) of Rs. 223.30 Lacs
 (Rs. 226.06 Lacs) are outstanding for more than a year. In spite of
 agreements for advances with many parties, we are unable to comment on
 its recoverability. The company is in process of taking suitable action
 to recover the said dues.
 
 18.  Bank balances include a sum of Rs. 0.07 Lacs (Rs.0.07 Lacs) lying
 in a Refund account representing unencashed refund orders, and sum of
 Rs. 3.28 Lacs (Rs. 3.28 Lacs) representing unencashed dividend
 warrants/ debenture interest warrant.
 
 19.  Deposit with Banks of Rs. 11.99 Lacs (Rs. 17.40 lacs) are under
 lien for the various credit facilities availed from them.
 
 20.  As per the past practice, the excise duty is paid on finished
 goods as and when they are cleared from the factory.  An estimated
 amount of Rs. 4.98 Lacs (Rs. 4.98 Lacs) of excise duty is payable on
 the finished goods lying in the factory and the same is not included in
 the inventory valuation.  However there is no effect on the profit for
 the year on account of the above treatment of excise duty.
 
 21.  As per the terms of issue of debentures, the Company is required
 to create debenture redemption reserve.  However, no reserve has been
 created during the year in absence of profits.
 
 22. (i) 15% Secured Non-Convertible Debentures of at a premium of 5% in
 three equal installments commencing from 1st October, 1997 on expiry of
 6th, 7th & 8th year from the date of allotment. The premium will be
 accounted on payment basis. The Company has not redeemed the first and
 second installments.
 
 (ii) 17% Secured Non-Convertible Debentures of Rs. 500 Lacs (Second
 Series) are redeemable at par in three equal installments commencing
 from 1st August, 2000 on expiry of 6th, 7th & 8th year from the date of
 allotment.
 
 (iii) 20.5% Secured Non-Convertible Debentures of Rs. 50 Lacs (Third
 Series) are redeemable on 19th May, 1997 at the end of 24th months from
 the date of allotment with call option exercisable by the subscriber by
 giving one months notice. The Company has not redeemed the said
 Secured Non-Convertible Debentures.
 
 (iv) 18.5% Secured Non-Convertible Debentures of Rs. 1000 Lacs (Fourth
 Series) are redeemable in three equal installments commencing from
 5th/9th January, 2002 on the expiry of 6th, 7th & 8th years from the
 date of allotment.
 
 23.  (a) Rupee Term Loans from financial institutions and
 Non-Convertible Debentures
 
 (First Series, Second Series & Fourth Series) privately placed with
 financial institutions and funds are secured/to be secured by way of
 mortgage of immovable properties and hypothecation of movable assets of
 the Company (except book-debts), subject to prior charge(s) on stocks,
 consumables and other movable assets of the Company, created/to be
 created in favour of bankers ranking pari passu interse and further
 subject to exclusive charge in favour of a financial institutions. The
 creation of securities in respect of the Fourth Series of the
 Debentures of Rs. 1000 Lacs is not complete. Further the Rupee Term
 Loans from the financial institutions are secured by personal
 guarantees of the Chairman and the Managing Director.
 
 (b) Rupee Term Loans from the financial institution under Asset Credit/
 Equipment Finance Scheme are secured by exclusive charge by way of
 hypothecation of the plant & machinery, equipment and other assets
 acquired there against and personal guarantees of the Chairman and the
 Managing director.
 
 (c) Non-Convertible Debentures (Third Series) are yet to be secured by
 way of second charge on the immovable properties of the Company.
 
 (d) Rupee Short Term Loan from Financial Institution are secured by way
 of pledge of equity shares in the Company held by an investment Company
 and personal guarantee of the Chairman and the Managing Director.
 
 (e) Cash Credit, Packing Credit and bill discounting and other working
 capital facilities from the banks are secured by hypothecation of all
 the present & future Goods, book debts and other current assets of the
 respective divisions of the Company for which the facilities are
 sanctioned by the concerned banks by way of prior/first charge ranking
 pari-passu interse.
 
 (f) Short Term Loan from IDBI is secured against securities of third
 party.
 
 24.  The Sundry Creditors include Tax deducted at source on dividend of
 Rs. 19.56 Lacs, which is still unpaid.
 
 25.  Since no remuneration has been paid to the Directors, the
 computation of net profit ; u/s 349 of The Companies Act, 1956 is not
 enumerated.
 
 26. No depreciation has been provided for during the year on assets of
 paper division, amount not ascertained.
 
 27.  The Company has not made any provision for gratuity payable
 amounting to Rs. 30.00 Lacs ( approx.)..
 
 28.  Pre-operative expenses amounting to Rs. 22.15 lacs (22.15 lacs)
 under the heading Miscellaneous Expenditure, represents amount spent on
 Enzyme Project of chemical division, whose implementation is deferred
 as of date.
 
 29. The Company is in process of collecting the information in respect
 of amounts payable over Rs. 1 Lac or more to small-scale Industrial
 Undertakings, which are outstanding for more than 30 days.
 
 30.  Previous years figures have been regrouped, rearranged and
 reclassified wherever necessary.