2. (a) During the year, the excise duty payable on finished goods lying
 in factory or sector in bonded is neither charged to the profit and
 loss account nor included in the valuation of closing inventory, unlike
 in the previous year where the excise duty payable on such finished
 goods was charged to the profit and loss account and included in the
 valuation of closing inventory. The impact, as a result of aforesaid
 change in accounting policy, on the charges for the year on account of
 excise duty and value of closing inventory has not been ascertained.
 This change has no effect on the loss for the year.
 
 (b) The Company had received a refund of Rs. 96.15 lakhs from the
 Excise Authorities which was credited in Profit and Loss Account in an
 earlier year, however subsequently Excise Authorities went in appeal
 that the above refund had been granted erroneously. The case has now
 been decided in favour of the Department and hence a provision of Rs.
 96.15 Lakhs has been made during the year.
 
 3. The Company has been incurring substantial operating losses, since
 -96. In view of the acute position, the Company has not been able to
 pay creditors on due dates and there have also been defaults in the
 repayment of maturing term loan instalments and interest dues. Some
 creditors have filed winding up petitions in the Bombay High Court. The
 Board for Industrial and Financial Reconstruction have passed an order
 dated 5th February, 2001 and recommended to the Bombay High Court for
 the winding up of the Company. Meanwhile Bank of Baroda has also filed
 a petition before Bombay High Court for winding up. However, the High
 Court has appointed Court Receiver, in the intervening period.
 
 The operations of the Company has come to grinding halt since
 mid-November 2000. The books of account, records and documents are
 lying in the Mill and H. O. and could not be accessed for the
 preparation of the financial statements.  The financial statements have
 been prepared based on the documents and records presently available
 with the management of the Company.
 
 However, the financial statements have been prepared on a going concern
 basis.
 
 4. CONTINGENT LIABILITIES NOT PROVIDED FOR:
 
 (i) On account of Bills discounted Rs. Nil (previous year Rs. 195.14
 lakhs)
 
 (ii) On account of Bank guarantee given - Not ascertainable
 (previous year Rs. 4.75 lakhs)
 
 (iii) On account of Sales tax demands aggregating - Not ascertainable
 (previous year Rs. 3.87 lakhs)
 
 (iv) On account of Excise duty demands aggregating - Not ascertainable
 (previous year Rs. 431.43 lacks)
 
 5. The commitments for capital expenditure not provided for are
 estimated at - Rs. 144.59 lakhs (previous year Rs.  144.59 lakhs).
 
 6. The Industrial Development Bank of India has an option under certain
 circumstances, in terms of the loan agreement, to convert the whole of
 the outstanding amount of the loan or a part not exceeding 20% of the
 total loan whichever is lower into fully paid equity share at par.
 However, IDBI has recalled the loan and filed a case in Debt Recovery
 Tribunal.
 
 7. The conveyance in respect of sale in an earlier year of Rs. 465
 lakhs booked on entering into binding agreements to sell certain lands
 located at Hubli, Kurla and Yeotmal have still be executed. The balance
 consideration of Rs. 25.50 lakhs is included in Secured Debtors. The
 purchaser has raised counter claim for compensation, which is disputed
 by the Company. The compensation amount is presently not ascertained.
 
 8. (a) In the year 1998-99, in accordance with Development Control
 regulation for Greater Bombay, 1991, the Company surrendered 49,706,.25
 sq. mtrs. of land to Bombay Municipal Corporation and Maharashtra
 Housing And Development Authority. The Company received equivalent sq.
 mtrs. of Transferable Development Rights (TDR) against such surrender
 of land. During the previous year the Company's share thereof being
 24,829.40 sq. mtrs.  alongwith 394.85 sq. mtrs. purchased, aggregating
 25,224.25 sq. mtrs. was sold at the rate of Rs. 500 per sq. ft.  The
 net income from sale of TDR amounting to Rs. 1,242.40 lakhs had been
 credited to profit and loss account of the previous year (after
 adjusting cost of purchase of TDR Rs. 21.25 lakhs and cost of
 development Rs. 93.91 lakhs).
 
 (b) Preliminary and other expense aggregating Rs. 12.11 lakhs (previous
 year Rs. 12.11 lakhs) attributable to the development of land have been
 carried forward under Other Current Assets
 
 9. The Company has an investment of Rs. 11.79 lakhs (previous year Rs.
 11.79 lakhs) in equity shares and aggregate amount of Rs. 1,027.98
 lakhs (previous year Rs. 1,022.83 lakhs) recoverable from Coromandel
 Garments Limited (CGL), a wholly owned subsidiary, CGL has been
 declared a sick company by The Board for Industrial and Financial
 Reconstruction.
 
 10. No provision has been made in respect of doubtful debts and
 advances as the same has not been ascertained. In case of previous
 year, advances aggregating Rs. 79.71 lakhs and debtors amounting to Rs.
 Nil has not been considered for provision as the Company was taking
 steps for recovery.
 
 11. The Company has imported certain equipment, which has not been
 cleared from customers warehouse due to paucity of funds. The cost of
 this equipment amounting to Rs. 257 lakhs including provision for
 custom duty and other cost is included under capital work-in-progress.
 The management is of the view that this equipment would not be of use
 to the Company. It is presently not possible to quantify the loss, if
 any, that may arise on the sale/disposal of this equipment and no
 provision is considered necessary for demurrage and detention charges
 and also for other penalties, if any. In respect of some parts of the
 equipment, which have already been auctioned by the custom by the
 custom authorities, the adjustments for loss (if any) will be made on
 receipt of complete information/demand from custom authorities.
 
 12. The Company has incurred capital expenditure of Rs. 1,890 lakhs
 (previous year Rs. 1,890 lakhs) including capital advances under the
 modernisation programme. Due to difficult liquidity position, the
 Company has not been able to complete the installation and
 commissioning of the equipment.
 
 13. (a) In the current year and in the earlier years, under
 instructions from the Company, some of the customers made direct
 payments to the creditors for supplies and expenses. During the
 previous year, the Company has reconstructed the parties ledger and has
 obtained/is in process of obtaining confirmations from the parties and
 reconciling with the various control accounts. At the end of the
 previous year the total of the various Creditors control accounts after
 adjusting the unreconciled debit balance in the aforementioned accounts
 exceeds the aggregate balance as per the reconstructed Creditors
 Ledger by Rs. 187.60 lakhs. No steps could be taken to reconcile the
 same due to closure of operations in the later part of the current
 year.
 
 (b) During the previous year, on reconciliation of the balances certain
 adjustment in Excise on cloth recoverable account and Excise MODVAT
 account were identified and are disclosed under prior period item.
 Capital work in progress includes Rs. 33.08 lakhs on account of prior
 year MODVAT reversal.
 
 14. Lease rentals charged to the profit and loss account in accordance
 with the terms and conditions of the relevant lease agreements is Rs.
 1.87 lakhs (previous year Rs. 1.87 lakhs). The balance future lease
 rentals amount to Rs. Nil (previous year Rs. 1.88 lakhs).
 
 15. Sundry creditors include total outstanding of Small Scale
 Industrial (SSI) undertakings - Amount not ascertained (previous year
 Rs. 25,05,635). The names of the SSI undertakings to whom the Company
 owned a sum exceeding Rupees One lakh which are outstanding for more
 than 30 days as at the year end - Not ascertained.
 
 18. Previous year's figures have been regrouped wherever necessary to
 make them comparable with those of the current year.