1. No provision for taxation has been made in the accounts as the
 Company expects no such liability.
 
                                                      AS AT        AS AT
                                                 31.03.1999   31.03.1998
 
 2.   Contingent liabilities not
      provided for in respect of
 
 i.   Interest not charged by
      banks as they have
      defined the loan as
      non-performing assets.
 
 a)   Bank of Maharashtra, Nasik                   2455,144    11,92,640
 
 b)   S.B.I. (E.P.C.), Mumbai                     42,93,011    14,89,905
 
 c)   S. B. I. (C.C.)                           1,47,30,650    49,57,947
 
 ii.  Bank Guarantee                               2,50,000     2,85,082
 
 iii. Amount not acknowledged as debts             1,57,535        --
 
 3. Balance with B.O.M. Nasik, packing credit account is not tallied
 with the Bank certificate as on 31.03.1999 due to credit given by the
 Bank towards interest reversed for 1996-97 amounting to Rs. 4,40,024/-
 and ECGC fees refund for June and July, 1997 amounting to Rs 6,532/-
 as the Bank has defined the account as non-performing asset.
 
 4. The Company has not appointed a whole time Company Secretary as
 required under section 383A of the Companies Act 1956.
 
 5. No provision have been made for interest Rs. 87,13,013/- on ICICI
 Foreign Currency Loan and interest Rs. 10, 18,230 on ICICI Rupee Tied
 Loan as per statement of account received from ICICI.
 
 6. i) Foreign currency loan from State Bank of India, Singapore is
 secured by mortgage /hypothecation in favour of State Bank of India,
 Commercial Branch, Mumbai.
 
 a. on all the immovable properties of the Company, at Gutt No.46/47,
 Village Walkhed, Taluka - Dindori, Dist. Nashik (Maharashtra), both
 present and future.
 
 b. on all movable assets of the Company, both present and future,
 subject to prior charges created / to be created in favour of the
 Company's bankers on specified movable assets for securing borrowings
 for working capital requirements.
 
 The loan is further secured by personal guarantees of Pramod Lath,
 Manish Kejriwal, G. L. Lath and Santosh Kejriwal.
 
 The mortgage/hypothecation charges referred to above will rank
 pari-passu with charges created/to be created in favour of SCICI Ltd.
 (now merged with ICICI Ltd.) for their portion of term loan of US
 Dollar equivalent of Rs. 300.00 Lakh.
 
 ii) Foreign currency loan from SCICI Limited (now merged with ICICI
 Ltd.) is secured by mortgage/hypothecation.
 
 a) on all the immovable properties of the Company, at Gutt 46/47,
 Village Walkhed, Taluka - Dindori, Dist. Nasik ( Maharashtra), both
 present and future.
 
 b) on all movable properties of the Company, both present and future
 [save and except specified movables which are - charged or may require
 to be charged only with prior written approval of SCICI Ltd.  (now
 merged with ICICI Ltd.) in favour of lenders of working capital.]
 
 The loan is further secured by personal guarantees of Pramod Lath,
 Manish Kejriwal, G.L. Lath and Santhosh Kejriwal.
 
 The mortgage/hypothecation referred to above will rank pari-passu with
 the mortgage/charges created/to be created by the Company in favour of
 State Bank of India.
 
 iii) Term Loan from The Saraswat Co-operative Bank Limited is secured
 by
 
 a. the mortgage of office premises at 211 Udyog Bhavan, Sonawala Road,
 Goregaon (East), Mumbai - 400 063.
 
 b. Personal guarantees of Pramod Lath, Manish Kejriwal, G. L. Lath and
 Santosh Kejriwal.
 
 iv. Working Capital finance from State Bank of India is secured by :
 
 a. joint mortgage / hypothecation by way of first charge on current
 assets :
 
 b. second charge by way of equitable mortgage on fixed assets of the
 Company :
 
 c. Personal guarantees of Promod Lath, Manish Kejriwal, G. L. Lath and
 Santosh Kejriwal.
 
 v. Working Capital finance from Bank of Maharashtra is secured by :
 
 a. joint mortgage / by hypothecation by way of first charge on current
 assets :
 
 b. second charge by way of equitable mortgage on fixed assets of the
 Company :
 
 c. Personal guarantees of Pramod Lath, Manish Kejriwal, G. L. Lath and
 Santosh Kejriwal.
 
 7. Balance of loans and advances and sundry debtors and creditors are
 subject to confirmation.
 
 8. Previous years figures have been regrouped and rearranged, wherever
 necessary, to make them comparable.
 
 9. All figures have been rounded off to the nearest multiple of a
 rupee.
 
 10. Loans and advances includes Rs. 46,07,152/- (Previous year Rs.
 46,07,152/-) due from a company in which directors are interested as
 directors.
 
 11. Tractor and Tempo traveller which was taken on lease basis has
 been paid for finally during the year.  The above assets therefore
 belong to the company and the same should have been accounted in the
 block of assets This has not been done.
 
 12. a. In the opinion of the Board, the Current Assets, and Loans and
 Advances would realise at least the amount at which these are stated in
 the Balance Sheet.
 
 b. Provision for all the known liabilities have been made.
 
 13. During the year the Company has not written off miscellaneous
 expenditure, i.e., preliminary expenses Rs. 83,203/- and share issue
 expenses Rs. 8,62,833/- as there was no production during the year.
 
 14. The Company has changed its method of providing depreciation on
 plant and machinery by using the straight line method for only the
 period covering which the said plant and machinery has worked instead
 of for the whole year as in the past.  As during the year plant has not
 been used at all, depreciation on the same has not been provided for
 the year.  Had the depreciation been provided, the Loss would have been
 higher by Rs. 71,76,164/-.