CONSOLTEX GROUPINC.

                  CONSOLIDATED FINANCIAL STATEMENTS

                     YEAR  ENDED DECEMBER 31,1999
                  (IN THOUSANDS OF CANADIAN DOLLARS)



<PAGE>












February 15, 2000


AUDITORS' REPORT

To the Shareholders of
Consoltex Group Inc.


We have audited the consolidated balance sheets of Consoltex  Group Inc. as at
December  31,  1999  and 1998 and the consolidated statements of earnings  and
retained earnings and  cash  flows  for  each  of  the years in the three-year
period  ended  December  31,  1999.   These  financial  statements   are   the
responsibility  of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted our  audits  in  accordance  with  generally  accepted  auditing
standards  in  Canada.   Those  standards  require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are free
of  material misstatement.  An audit includes  examining,  on  a  test  basis,
evidence  supporting  the amounts and disclosures in the financial statements.
An  audit  also  includes   assessing   the  accounting  principles  used  and
significant estimates made by management,  as  well  as evaluating the overall
financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company  as  at  December 31,
1999 and 1998 and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 1999 in accordance  with
generally accepted accounting principles in Canada.


/s/ PricewaterhouseCoopers LLP
Chartered Accountants



<PAGE>



COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING DIFFERENCE


In the United States, reporting standards for auditors require the addition of
an  explanatory  paragraph  (following  the opinion paragraph) when there is a
change  in  accounting  principles  that  has   a   material   effect  on  the
comparability  of  the  company's  financial  statements,  such as the  change
described in Note 1h to the consolidated financial statements.   Our report to
the  shareholders  dated  February  15,  2000 is expressed in accordance  with
Canadian reporting standards which do not require a reference to such a change
in accounting principles in the auditors'  report  when the change is properly
accounted for and adequately disclosed in the financial statements.







/s/ PricewaterhouseCoopers LLP
CHARTERED ACCOUNTANTS

Montreal, Canada
February 15, 2000





<PAGE>








                             CONSOLTEX GROUP INC.
                         CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                     <C>

                                                        DECEMBER  31
</TABLE>
<TABLE>
<CAPTION>
(in thousands of Canadian dollars)                         1999     1998
-------------------------------------------------------  ------- --------

<S>                                                     	<C>     <C>
                                                                 Restated
ASSETS                                                          (Note 1-h)
CURRENT ASSETS
  Cash                                                    $4,285    $3,883
  Accounts receivable and prepaid expenses, net of
  allowance for doubtful accounts of $2,028
  (1998 - $2,411) (Note 2)                                73,080    55,633
  Inventories  (Note 3)                                  130,180   110,382
  Current portion of future income tax assets (Note 13)      650       792
-------------------------------------------------------   ------- --------
	                                                   208,195   170,690

Fixed assets  (Note 4)                                   162,403   162,106
Goodwill, net of accumulated amortization of $15,428
(1998 - $12,618 )                                        117,963    74,091
Other   assets,  net  of  accumulated  amortization
of $12,318
(1998 - $8,765)							     8,749    15,558
Future income tax assets (Note 13)                         2,193       639
-------------------------------------------------------  -------- --------
Total assets                                             $499,503 $423,084
                                                         ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Bank loans (Note 5)                         		    $56,123  $42,515
  Accounts payable and accrued liabilities (Note 6)        52,888	  46,371
  Income taxes payable							3,985    6,934
  Current portion of long-term debt (Note 7)               79,376   10,714
  Current portion of other long-term liabilities (Note-8)   8,149        _
  Current portion of future income tax liabilities(Note 13) 9,231    4,039
-------------------------------------------------------   ------- --------
	                                                    209,752  110,573

Long-term debt (Note 7)                                   173,184  202,026
Other long-term liabilities (Note 8)			     15,618    4,687
Future income tax liabilities (Note 13)                    23,962   31,526

Commitments and contingencies (Note 14)

SHAREHOLDERS' EQUITY
  Share capital (Note 9)                                   95,628   92,998
  Contributed surplus                                       3,076      -
  Retained earnings                                         6,680   11,813
  Deferred translation adjustment (Note 10)               (28,397) (30,539)
-------------------------------------------------------    ------- --------
		                                                76,987   74,272
-------------------------------------------------------    ------- --------

Total liabilities and shareholders' equity                $499,503 $423,084
-------------------------------------------------------   ======== ========

</TABLE>

The accompanying notes are an integral part of these financial statements.




                             CONSOLTEX GROUP INC.
          CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS


<TABLE>
<CAPTION>
<S>                                           <C>
                                              Year ended December 31

</TABLE>
<TABLE>
<CAPTION>
(in thousands of Canadian dollars)			 1999    1998     1997
-------------------------------------------   	------- -------  -------
<S>                                            	  <C>     <C>      <C>

                                                      Restated  Restated
                                                     (Note 1-h)(Note 1-h)

Sales 						      $510,343 $481,299 $509,447
--------------------------------------------    -------- -------- --------
Cost of sales						 396,819  368,244  398,100
Selling and administrative expenses  		  56,229   49,296   50,141
Foreign exchange (gain) loss (Note 11)              (110)   3,434     (509)
Depreciation and amortization                      25,182  21,077   19,256
--------------------------------------------    --------- -------  -------
                                                  478,120 442,051  466,988
--------------------------------------------    --------- -------- -------
Earnings from operations                           32,223  39,248   42,459
Other expense (Note 12)                           (4,435)    (255)       -
--------------------------------------------     -------- -------- -------
								   27,788   38,993  42,459
Financing costs:
  Interest expense -
    Banks loans						    4,491    3,660   1,213
    Long-term debt                                 23,531   22,207  21,537
--------------------------------------------      -------  ------- -------

                                                   28,022   25,867  22,750
  Factor expenses (Note 2)				    2,317    2,290   2,411
  Amortization of deferred financing expenses       2,341    1,749   2,843
--------------------------------------------      -------- ------- -------
                                                   32,680   29,906  28,004
--------------------------------------------      -------- ------- -------
Earnings (loss) before income tax expense          (4,892)   9,087  14,455
Income tax expense (Note 13)                          241    3,631   3,625
--------------------------------------------      -------  ------- -------
Net earnings (loss) for the year                   (5,133)   5,456  10,830

Retained earnings (deficit) at the beginning
of the year as previously reported                 15,889   12,824   3,384
Effect of an accounting change (Note 1-h)          (4,076)  (6,467)  (7,262)
--------------------------------------------      -------- -------- -------
Retained  earnings (deficit) at beginning of
year - restated						    11,813   6,357   (3,878)
Share  issue   costs,   net  of  income  tax
benefits of $364 (Note 9)    					  -        -        -
--------------------------------------------      -------- -------- -------
Retained earnings at the end of the year            $6,680  $11,813   6,357
                                                  ======== ======== =======
</TABLE>


The accompanying notes are an integral part of these financial statements.


<PAGE>


                             CONSOLTEX GROUP INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
         							<C>
    								Year ended December 31
<S>                                             <C>
</TABLE>
<TABLE>
<CAPTION>
(in thousands of Canadian dollars)			1999     1998      1997
--------------------------------------------   -------- --------  --------

<S>                                              <C>      <C>      <C>

                                                      Restated Restated
                                                    (Note 1-h)(Note 1-h)

Cash flows from operating activities:
 Net earnings (loss) for the year   		 $(5,133)  $5,456  $10,830
 Depreciation                                     19,941   16,288   14,822
 Amortization of goodwill                          3,957    2,220    2,081
 Amortization of other assets                      1,284    2,569    2,353
 Amortization of deferred financing expenses       2,341    1,749    2,843
 Future income tax benefit                        (2,399)  (1,083)  (1,616)
 Gain on disposal of fixed assets                      -     (745)       -
-----------------------------------------------  -------  -------  -------
								  19,991   26,454   31,313
Changes in -
 Accounts receivable and prepaid expenses         (7,261)   1,640    4,278
 Inventories                                     (14,630)  (4,856)  (1,152)
 Accounts payable and accrued liabilities           (689)  (3,600)  (9,606)
 Income taxes payable                             (3,714)  (1,580)   4,964
----------------------------------------------   -------  -------  -------
Cash flows from (used in)operating activities     (6,303)  18,058   29,797
----------------------------------------------   -------  -------  -------

Cash flows from investing activities:
 Purchase of fixed assets                         (15,848) (21,203) (20,231)
 Proceeds on sale of fixed assets                       -      328        -
 Business acquisitions (Note 16 )                 (54,262)       -        -
---------------------------------------------    --------  -------  -------
Cash flows from (used in)investing activities     (70,110) (20,875) (20,231)
---------------------------------------------    --------  -------  -------

Cash flows from (used in)financing activities:
 Increase in bank loans                            13,608   15,357   (1,873)
 Payment of long-term debt                        (10,412)  (9,100) (10,020)
 Proceeds from issuance of long-term debt          62,058        -        -
 Increase(decrease)in other long-term
 liabilities                                          965    1,604      (69)
 Decrease (increase) in other assets                4,890   (2,068)  (4,002)
 Issuance of share capital                          2,630       33    6,120
 Capital contribution                               3,076        -        -
 Share issue costs                                      -        -     (959)
----------------------------------------------    -------  -------  -------
                                                   76,815    5,826  (10,803)
---------------------------------------------     -------  -------  -------

Increase (decrease) in cash                           402    3,009   (1,237)
----------------------------------------------    -------  -------  -------

Cash:
 At the beginning of the year                       3,883      874    2,111
----------------------------------------------   --------  -------  -------
 At the end of the year                            $4,285   $3,883     $874

Supplemental disclosures of cash flow
information

Interest paid                                     $27,645   $26,611   $23,670
---------------------------------------------   =========  ========  ========

Income taxes paid                                   3,088     6,047     3,039


</TABLE>
The accompanying notes are an integral part of these financial statements.


<PAGE>


                             CONSOLTEX GROUP INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of Canadian dollars, unless otherwise noted)

1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES

Consoltex  Group  Inc.  (the  "Company"),  is a North American textile company
with activities divided between  its  Polypropylene  and  Textile  Operations.
Consoltex  is  vertically  integrated  from  the  production  of  yarn, in the
Polypropylene Operations, through to weaving, dyeing, printing, finishing  and
coating,  as well as, cutting and sewing operations for certain product lines.
The Company  also  conducts its own research and development and maintains its
own sales, marketing  and  distribution  network throughout Canada, the United
States and Mexico.  On January 1, 2000, the  Company's  subsidiary,  Consoltex
Inc.  was wound-up into Consoltex Group Inc.  As a result of this transaction,
the Company subsequently changed its name to Consoltex Inc.

The consolidated  financial  statements  are expressed in Canadian dollars and
have been prepared in accordance with generally accepted accounting principles
in  Canada  which, in the case of Consoltex  Group  Inc.,  differ  in  certain
respects from those in the United States as explained in Note 19.

The  consolidated  financial  statements  reflect  the  following  significant
accounting policies:

(a)  The consolidated financial statements include the accounts of the Company
  and its subsidiaries.

(a) Inventories are valued at the lowest of cost, determined using the average
   cost  methods,  replacement  cost  and  net realizable value.  For finished
   goods and work in process, cost includes  the cost of raw materials, direct
   labour and manufacturing overhead.

(c)   The  assets and liabilities of self-sustaining  foreign  operations  are
   translated at current exchange rates with the resulting gain or loss
   recorded as  a  deferred  translation  adjustment  which is a component
   of shareholders' equity. Revenue and expense items of self-sustaining
   foreign operations  are  translated  at  average exchange rates
   prevailing during the period.

   In all other cases, including hyperinflationary countries,  monetary assets
   and liabilities in foreign currencies are translated into Canadian  dollars
   at  the  exchange  rates  prevailing at the period-end dates.  Revenues and
   expenses in foreign currencies  are translated into Canadian dollars at the
   average exchange rates prevailing  during  the period. All gains and losses
   on translation are included in net earnings  for  the  periods  except  for
   unrealized  foreign  currency  gains or losses on long-term monetary assets
   and liabilities.  For long-term  debt  designated  as  a  hedge  to the net
   investment in foreign self-sustaining operations, exchange gains and losses
   are included in the deferred translation account.  For the remaining
   long-term monetary liabilities and assets denominated in a foreign
   currency,exchange gains and losses are deferred and amortized over the
   remaining lives of the related items on a straight-line basis and are
   included in Depreciation and amortization. The Company has designated a
   portion of the Senior Subordinated Notes as a hedge to the net investment
   in its self-sustaining U.S. operations.

   The Company manages its foreign exchange exposure on anticipated net U.S.
   dollar cash flow to its Canadian operations, through  the  use  of  forward
   exchange contracts. Resulting gains and losses are recognized when realized
   and are included in Foreign exchange gain or loss.

(d)    Fixed  assets  are  stated at cost.  Depreciation is provided for on a
straight-line basis over the estimated useful lives of the assets, which
        are as follows:

<TABLE>
<CAPTION>
Buildings               40 years
<S>                     <C>
Machinery and equipment 3 to 20 years
</TABLE>

(e)   Goodwill is being amortized over periods ranging from 15 to 40 years.
  The Company assesses at each balance sheet date whether
  there has been a permanent impairment in the value of goodwill.  This is
  accomplished in a number of ways, including determining
  whether projected undiscounted future cash flows from operations exceed the
  net book value of goodwill as of the assessment date. Additional factors
  considered by management in the preparation of the projections and in
  assessing the value of goodwill include the effects of obsolescence,
  demand, competition and other pertinent economic factors and trends and
  prospects that may have an impact on the value or remaining useful life
  of goodwill.

(f)    Other assets primarily include deferred financing expenses, long-term
receivables and unamortized foreign exchange losses on long-term debt.
Deferred financing expenses are amortized over the duration of the related
debt.

(g)   The differentials to be  received  or  paid  under  interest  rate  swap
contracts are recognized in earnings concurrently with the interest expense on
the underlying debt.


<PAGE>


ACCOUNTING POLICIES (CONT'D)

1. In  1999,  the  Company  retroactively  adopted  the Canadian Institute  of
   Chartered Accountants' ("CICA") new recommendations  for the accounting for
   income  taxes  which  requires  the use of the asset and liability  method.
   Under this method, future income taxes are recognized for the future income
   tax  consequences  attributable  to   differences   between  the  financial
   statement carrying values and their respective income  tax basis (temporary
   differences).  Future income tax assets and liabilities  are measured using
   enacted income tax rates expected to apply to taxable income  in  the years
   in  which  temporary  differences  are expected to be recovered or settled.
   The effect on future income tax assets  and  liabilities of a change in tax
   rates is included in income in the period in which  the change occurs.  The
   amount  of future income tax assets recognized  is limited  to  the  amount
   that is "more  likely  than  not" to be realized.  As a result of these new
   recommendations,  retained earnings  on  December  31,  1997  decreased  by
   $6,467, net future  income  tax  liability  increased  by $20,837, goodwill
   increased by $19,002 and the deferred translation adjustment  increased  by
   $4,632.    The restatement of prior years statement of earnings resulted in
   an increase  in  net earnings reported for the year ended December 31, 1998
   of $2,391 (year ended  December  31,  1997  -  increase  in net earnings by
   $795).

   In  1999,  the  Company  retroactively adopted the CICA new recommendations
   concerning  the  statements  of  cash  flows.   As  a  result  of  the  new
   recommendations, cash flows from financing activities for 1998 increased by
   $13,966 (year ended December 31, 1997 - decreased by $3,396).

2. The  preparation of  financial  statements  in  conformity  with  generally
   accepted  accounting  principles  requires management to make estimates and
   assumptions that affect the reported  amounts of assets and liabilities and
   disclosure  of  contingent  assets  and liabilities  at  the  date  of  the
   financial statements and the reported  amounts  of  revenues  and  expenses
   during  the  reporting  period.   Actual  results  could  differ from these
   estimates.

(j)    Certain comparative figures have been reclassified to conform with the
current year's presentation.

2.    ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
<TABLE>
<CAPTION>

									   December 31
----------------------------------------------------- ----------------

<S>                                                   <C>
</TABLE>
<TABLE>
<CAPTION>

                                                       1999     1998
<S>                                                   <C>      <C>
Trade receivables                                     $67,213  $49,915
Other receivables                                       4,133    4,243
Prepaid expenses                                        1,734    1,475
----------------------------------------------------- ------- --------
                                                      $73,080  $55,633
                                                    ========= ========
</TABLE>

The Company factors certain of its accounts receivable from customers in the
United States.  The difference between the proceeds from factoring of
receivables and the book value is recorded as factor expenses under financing
costs while related commissions are included in selling and administrative
expenses.

3.   INVENTORIES
<TABLE>
<CAPTION>

								 December 31
-------------------------------------------- ---------------------------

<S>                                          <C>
</TABLE>
<TABLE>
<CAPTION>

                                                      1999     1998
<S>                                                   <C>      <C>
Raw materials                                          $35,415  $24,211
Work in process                                         34,653   29,729
Finished goods                                          54,231   51,570
Spare parts                                              5,881    4,872
----------------------------------------------------- -------- --------
                                                      $130,180  $110,382
                                                     ========= =========
</TABLE>



<PAGE>



4.    FIXED ASSETS
<TABLE>
<CAPTION>
                                                  DECEMBER 31, 1999
<S>                                          <C>
</TABLE>
<TABLE>
<CAPTION>

<S>                                          <C>     <C>       <C>
								   Accumulated Net Book
                                              COST Depreciation  Value
-------------------------------------------- ------- --------- --------
Land and buildings                           $61,867   $11,040  $50,827
Machinery and equipment                      198,458    86,882  111,596
-------------------------------------------- ------- --------- --------
                                             260,325    97,922  162,403
                                            ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
                                                  December 31, 1998
<S>                                          <C>
</TABLE>
<TABLE>
<CAPTION>

<S>                                          <C>     <C>       <C>
								   Accumulated Net Book
                                              Cost Depreciation  Value
-------------------------------------------- ------- --------- --------

Land and buildings                           $59,780    $8,841  $50,939
Machinery and equipment                      180,652    69,485  111,167
-------------------------------------------- ------- --------- --------
                                             240,432    78,326  162,106
                                           ========= ========= ========
</TABLE>
5.   BANK LOANS

On  October  25, 1999, the Company amended and restated its senior  bank  debt
facility providing  it with a US$57.5 million working capital revolving credit
line  maturing  on October  31,  2000.   The  Company  and  all  its  material
subsidiaries may  borrow  under this syndicated facility.  The working capital
revolving  credit  line  is  subject   to   certain  financial  covenants  and
restrictive  conditions,  is secured by certain  Canadian  and  United  States
accounts  receivable  and  certain   inventory,   and  is  guaranteed  by  all
subsidiaries of the Company.  Unless the lenders under  the  senior  bank debt
facility  consent  in  writing otherwise, the working capital revolving credit
line is repayable upon a  change  of  control  of  the  Company.   Interest is
payable  quarterly  for  base rate loans, at issuance for bankers'  acceptance
loans  and  at maturity for  LIBOR  loans  at  the  applicable  rate  plus  an
applicable  margin.   The  margin  varies  from  2.75%  on  LIBOR and bankers'
acceptance rate loans and 1.50% on base rate loans. At December  31, 1999, the
rate  for  outstanding  LIBOR loans was  8.99%,  7.78% for bankers' acceptance
rate loans and 9.55% for  base  rate loans for a weighted average rate for the
borrowings under the working capital  revolving  credit line of  9.05%
(1998 -7.64%).

The unused portion at December 31, 1999 totalled $27,372  and  bore  an unused
commitment fee of  0.425%  per annum.

Amounts  outstanding  under letters of credit totalled $7,732 at December  31,
1999, and are included as a reduction in arriving at the unused portion of the
working capital revolving credit line, as disclosed above.

6.    ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>
                                                           December 31

<S>                                                       <C>      <C>
</TABLE>
<TABLE>
<CAPTION>

									  1999       1998
									--------   --------

<S>                                                      <C>    <C>
Trade accounts payable                                  $34,602  $29,934
Accrued salaries and benefits                             2,947    1,193
Accrued interest                                          5,757    5,220
Other                                                     9,582   10,024
-------------------------------------------------------- ------ --------
                                                         52,888   46,371
                                                        ======= ========
</TABLE>



<PAGE>



7.    LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                            December 31
<S>                                                       <C>    <C>
</TABLE>
<TABLE>
<CAPTION>
                                                           1999    1998
									  ------- -------
<S>                                                       <C>    <C>
Series B 11% Senior Subordinated Notes maturing
September 2003.  Interest payable semi-annually
on April 1 and October 1(1999 and 1998 - US$120,000)  $173,184 $183,660

Term Loan A, maturing October 2000
Interest payable quarterly at LIBOR plus 2.75%
(1999 - US$12,000; 1998 - US$19,000)			  17,318   29,080


Term Loan B, maturing October 2000
Interest payable quarterly at LIBOR plus 3.00%
(1999 - US$43,000)                               	  62,058        -
-----------------------------------------------------  -------  -------
                                                       252,560  212,740

Less:  Amounts due within one year                      79,376   10,714
-----------------------------------------------------  -------  -------
                                                      $173,184 $202,026
                                                      ======== ========
</TABLE>

The Series B 11%  Senior  Subordinated  Notes  due  2003  (the  "Notes")  were
jointly  issued  by  the  Company  and  Consoltex  (USA) Inc.,  (together  the
"Issuers").  The  Notes  are  unsecured, however they are  guaranteed,  on  an
unsecured senior subordinated basis,  by  subsidiaries  of  the  Issuers.  The
Notes  are  redeemable  under certain circumstances, including upon change  of
control of the Company.   Also,  upon  a change of control of the Company, the
Issuers must make an offer to each holder  of  Notes  to repurchase all or any
part of such holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest.  The indenture
governing the Notes contains some limitations on the ability of the Issuers to
incur certain types of indebtedness.  The Company has designated  a portion of
the  Notes  as  a  hedge  to  the  net  investment in its self-sustaining U.S.
operations.

On  March  19, 1996, the Company entered into  a  senior  bank  debt  facility
providing it  with a US$35 million five-year Term Loan A.  The Company and all
its material subsidiaries may borrow under this syndicated facility.  The Term
Loan A is subject  to  certain financial covenants and restrictive conditions,
is secured by certain fixed  assets,  and is guaranteed by all subsidiaries of
the Company.  Unless the lenders under  the  senior bank debt facility consent
in writing otherwise, the Term Loan A is repayable upon a change of control of
the  Company.   The  Term  Loan  A  was  repayable  over   five  years  in  20
installments, of which the first eight quarterly installments are US$875,
the  next  11  quarterly installments are US$1,750 and a twentieth  and  final
installment in March  2001  is  US$5,000.   During  1997,  the  Company repaid
US$3,750  of  the  term loan from the proceeds of a treasury share issue  (see
Note 9).  On October  25,   1999,  the Company amended and restated the senior
bank  credit  facility agreement resulting  in  all  outstanding  balances  at
October 31, 2000 of this Term Loan A being repayable on October 31, 2000.

Term Loan B is subject to all of the same terms and conditions as Term Loan A
except that the entire balance of Term Loan B is repayable on October 31,
2000.  Term Loan B was issued in two installments.  US$25 million was issued
on August 2, 1999 with respect to the acquisition of Marino Technologies Inc.,
while US$18 million was issued on November 19, 1999 with respect to the
acquisition of the assets of Atlas Bag Inc.

Long-term debt  payments  over the next five years, determined at December 31,
1999, are as follows: 2000 - $79,376; 2001 - Nil; 2002 - Nil; 2003 - $173,184;
thereafter - Nil.


<PAGE>



8. OTHER LONG-TERM LIABILITIES

<TABLE>
<CAPTION>
                                                          December 31
<S>                                                      <C>     <C>
</TABLE>
<TABLE>
<CAPTION>
                                                          1999       1998
-------------------------------------------------------- -------  -------

<S>                                                      <C>      <C>
Remaining amounts owing on acquisitions                  $17,052      $ -
Unfunded pension liability				           3,541    2,352
Obligations relating to equipment purchases                2,327    1,600
Provision for seniority premiums payable to employees        847      735
-------------------------------------------------------- ------- --------
                                                          23,767    4,687
Less:  Amounts due within one year                         8,149        -
-------------------------------------------------------- ------- --------
                                                          15,618   $4,687
                                                        ======== ========

</TABLE>

The Company sponsors ten pension plans, of which five are unfunded defined
benefit plans, one is a funded defined benefit plan, and the remaining four
are defined contribution plans.

Payments of other long-term liabilities over the next five years, determined
as at December 31, 1999,  will be as follows: 2000 - $8,149; 2001 - $6,037;
2002 - $2,507; 2003 - $826; 2004 - $465;  thereafter - $5,783.

9. SHARE CAPITAL

The authorized share capital of the Company consists of an unlimited number of
Multiple Voting Shares without  par  value, an unlimited number of Subordinate
Voting Shares without par value, (collectively  called  the  "Equity Shares"),
and an unlimited number of First Preferred Shares and Second Preferred  Shares
without par value issuable in series.  The Equity Shares are identical in  all
respects  except  that  the  Subordinate Voting Shares have one vote per share
while the Multiple Voting Shares have five votes per share and are convertible
any time into Subordinate Voting Shares on a share-per-share basis. The Equity
Shares rank junior to the First  and  Second Preferred Shares.   Under certain
conditions, including a change of control  of the Company, the Multiple Voting
Shares  will automatically be converted into  a  like  number  of  Subordinate
Voting Shares.

On October 20, 1999, all of the outstanding Subordinate Voting Shares of the
Company were acquired by AIP/CGI/NB Acquisition Corp. for $5.60 per share. As
a result of this transaction, the Company's equity increased by $5,698
including $3,076 of contributed surplus by AIP/CGI/NB Acquisition Corp. and
$2,622 from the exercise of all outstanding stock options.

On January 13, 1997, the Company, through a private placement, issued 3.4
million Subordinate Voting Shares at a price of $1.80 per share.  The net
proceeds from the share issue were used to repay a portion of the Company's
term loan.  The share issue costs of $959 were charged directly to retained
earnings, net of income taxes of $364.  Also on this date, 860,000 Multiple
Voting Shares were converted into a like number of Subordinate Voting Shares.

9. SHARE CAPITAL)

The number of outstanding shares and their aggregate stated value were as
follows:





<TABLE>
<CAPTION>

<S>                                 <C>                <C>
						December 31, 1999	 December 31, 1998


<S>                                 <C>       <C>      <C>        <C>
 						Number    Amount   Number     Amount
						of shares          of shares

</TABLE>

<TABLE>
<CAPTION>
Multiple Voting Shares			3,140,000  $24,727  3,140,000  $24,727
<S>                                 <C>        <C>      <C>        <C>
Subordinate Voting Shares           14,887,551 70,901   13,897,717 68,271
------------------------------------- -------- -------  ---------- -------
                                    18,027,551 $95,628  17,037,717 $92,998
                                    ========== =======  ========== =======
</TABLE>



<PAGE>



SHARE PURCHASE LOAN PROGRAM
On February  26,  1997, the Company implemented a Share Purchase Loan Program.
Under the Program,  the  Company  and certain of its subsidiaries offered full
recourse interest-bearing loans up  to  a  limit of $1,600 to Directors and to
selected  employees  for  the purchase of Subordinate  Voting  Shares  of  the
Company.

On October 20, 1999, all of  the  shares  included  in the Share Purchase Loan
Program were tendered as part of the privatization transaction.   As a result,
all  of the director and employee loans amounting to $768 were repaid  to  the
Company.


STOCK OPTION PLAN
The Company had a stock option plan which contemplated the granting of options
to key employees of the Company and its subsidiaries 1and to directors of the
Company to purchase an aggregate number of Subordinate Voting Shares of the
Company which does not exceed 1,400,000 shares.

On October 20, 1999, those options outstanding under the Stock Option Plan
that had an exercise price below $5.60 per share became vested and were
exercised as part of the privatization transaction.  Those options with an
exercise price above $5.60 per share were forfeited.


9.   SHARE CAPITAL (cont'd)

A summary of the changes to the number of outstanding options during the years
ended December 31, 1997, 1998 and 1999 is provided below:
<TABLE>
<CAPTION>
<S>                 <C>                  <C>                  <C>
                          1999                1998                 1997
                    -------------------  -------------------  --------------------

</TABLE>
<TABLE>
<CAPTION>
                               Weighted              Weighted             Weighted
                    Number     average    Number     average   Number     average
                      of       exercise   of         exercise  Of         exercise
                    options    price      options    price     options    price
                    ---------  ---------  ---------  --------  ---------  ---------

<S>                 <C>        <C>        <C>        <C>       <C>        <C>
Outstanding at
beginning of year   1,211,000      $3.26  1,238,500     $3.29     281,500      $5.93
Granted                     -          -     39,000      4.00     990,000       2.62
Exercised            (989,834)     $2.66    (12,500)     2.60           -          -
Forfeited            (221,166)     $6.21    (54,000)     4.68     (33,000)      5.75
                    ---------  ---------  ---------  ---------  ---------  -----
Outstanding at end
of year		          -             1,211,000       3,26  1,238,500     $3.29
                    =========  =========  =========  =========  =========  =========
</TABLE>


10.   DEFERRED TRANSLATION ADJUSTMENT

<TABLE>
<CAPTION>
                                      Year ended December 31
<S>							<C>         <C>
</TABLE>
<TABLE>
<CAPTION>
							  1999     	 1998
-------------------------------------- 	---------  ---------
<S>							<C>     	<C>
									Restated
									(Note 1-h)

Balance at beginning of year               $(30,539)   $(30,899)
Effect  of changes in exchange rates
during the year on net investment in
self-sustaining foreign operations           (6,013)      8,848
Effect of  changes in exchange rates
during the year on long-term debt
denominated in a foreign currency and
designated as a hedge                         8,155       (8,488)
--------------------------------------    ---------    ---------

Balance at end of year                      (28,397)      (30,539)
                                          =========     =========
</TABLE>



<PAGE>



11.  FOREIGN EXCHANGE (GAIN) LOSS
<TABLE>
<CAPTION>
                                                  Year ended December 31
<S>                                         <C>                          <C>
</TABLE>
<TABLE>
<CAPTION>
                                            1999      1998      1997
<S>                                       <C>        <C>        <C>
							---------  ---------  ---------

Effect of changes in exchange rate on
net manetary assests in Mexico		$    (580) $   2,090  $    (436)
Effect of changes in exchange rates
on net manetary assests denominated in
U.S. dollars held by integrated
subsidiaries					      158        759        (73)
Realized loss of forward foreign exchage
contracts							312	     585          -
----------------------------------------  ---------  ---------  ---------
</TABLE>

12.  OTHER EXPENSE

Other expense in 1999 represents charges of $4,435 (1998 - $255) related to
the privatization transaction.

13.   INCOME TAXES


<TABLE>
<CAPTION>
                                             Year ended December 31
<S>                                          <C>	  <C>	        <C>
</TABLE>
<TABLE>
<CAPTION>
                                             1999       1998        1997

<S>                                          <C>        <C>         <C>
Earnings (loss) before income tax expense
     Canada                                     $3,584    $14,145    $12,032
     United States                             (11,928)   (10,074)    (5,339)
     Latin America                               3,452      5,016      7,762
-------------------------------------------  ---------   --------   --------
                                                (4,892)     9,087     14,455
                                             =========  =========  =========
Current income tax expense (benefit)
     Canada             		      	$1,402     $3,257     $3,853
     United States                                (236)       317      1,050
     Latin America					 1,474      1,140        338
                                             ---------  ---------  ---------
                                                 2,640      4,714      5,241
                                             =========  =========  =========

Future income tax expense (benefit)
     Canada                                      $(807)      $749        $66
     United States                              (2,638)    (1,845)    (1,950)
     Latin America				      1,0462         13        268
                                             ---------  ---------  ---------
                                               $(2,399)   $(1,083)   $(1,616)
                                             =========  =========  =========
Income tax expense                                 241      3,631      3,625
                                             =========  =========  =========
</TABLE>



<PAGE>



INCOME TAXES

The composite of the applicable statutory corporate income tax rates in Canada
is 39.8%  (1998 - 39.8%; 1997 - 39.6%).  The following is a reconciliation of
income taxes calculated at the above composite statutory rate with the
provision for income taxes:


<TABLE>
<CAPTION>
                                            	Year ended December 31
<S>                                       	<C>      <C>    <C>
</TABLE>
<TABLE>
<CAPTION>

                                                1999     1998    1997
<S>                                             <C>      <C>     <C>
Income   taxes   (recovery)  at  the  composite
statutory rate                                  $(1,947)  $3,617   $5,724
Increase (reduction) attributable to:
     Canadian   manufacturing   and  processing
     credits                                       (231)    (880)    (683)
   Amortization of non-deductible goodwill        1,234      747      695
   Large  corporations  tax  and other minimum
   taxes                                          1,549    1,051      310
   Stock option deduction                          (790)       -        -
   Non-deductible capital expenditures              328      289      519
   Mexico    inflationary   and   indexation
   adjustment - net                                  39      340   (1,375)
   Benefit  of non-deductible non-tax effected
   Latin American losses                              -   (2,432)  (1,447)
   Foreign exchange                                 772      828     (765)
   Non-taxable amounts                             (219)    (312)       -
   Foreign tax rate differences                     (24)    (157)     150
   Other - net                                     (470)    (540)     497
-----------------------------------------------  ------   ------   ------
                                                    241    3,631    3,625
                                                 ======   ======   ======
</TABLE>

The portion of the Mexican losses and/or minimum tax carry-forwards for which
no future income tax assets has been recognized amounts to $1,301
(1998 - $4,569; 1997 -  $10,679).  These losses expire in 2005.


13. INCOME TAXES (CONT'D)

Future income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities.  Future tax assets (liabilities) at December 31, 1999 and 1998
consist of the following tax effected temporary differences:

<TABLE>
<CAPTION>
                                                Year ended December 31
<S>                                             <C>
</TABLE>
<TABLE>
<CAPTION>

								1999	     1998
<S>                                             <C>        <C>
Current portion of future income tax assets:
  Inventories                                         $357        $540
  Deferred financing                                   126         292
  Accounts receivable                                  355         378
  Others                                               125           -
                                               ----------- -----------
                                                       963       1,210
                                               =========== ============

Future income tax assets:
  Accrued liabilities    				       986         855
  Net losses carried forward                         8,992       2,738
  Alternative minimum taxes                          2,146         924
  Retirement plans                                   1,262         715
  Share issue costs                                    147         220
  Intangibles                                          415         235
  Others                                                 -           -
                                               ----------- -----------
                                                   $13,948      $5,687
                                               =========== ===========
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
<S>                             		      <C>         <C>
Current   portion   of   future
income tax liabilities:
  Inventories                                      $(9,117)    $(4,107)
  Deferred financing                                   (67)       (105)
  Investment tax credits                              (180)       (223)
  Others                                              (180)        (23)
                                                 ---------   ---------
                                                  $ (9,544)   $ (4,458)
                                                 =========   =========

 Future income tax liabilities:
  Property, plant and equipment                 $  (32,596)   $  (33,320)
  Deferred financing                                  (588)         (733)
  Intangibles                                         (339)         (442)
  Others                                            (2,194)       (2,233)
                                               -----------   -----------
                                                  (35,717)      (36,728)
                                              ===========    ==========
</TABLE>

After netting current assets with current liabilities and non-current assets
with non-current liabilities within each taxable entity for same tax
jurisdictions, future taxes are represented by :

<TABLE>
<CAPTION>
<S>                                            <C>


</TABLE>
<TABLE>
<CAPTION>

								1999	     1998
								---------  ---------
<S>                                             <C>        <C>
Current portion of future income tax assets         $ 650       $792
Future income tax assets                            2,193        639
Current    portion   of   future   income
liabilities                                        (9,231)    (4,039)
Future income tax liabilities                     (23,962)   (31,526)
			     					---------  ---------
<S>                                             <C>        <C>
                                                 $(30,350)  $(34,134)
                                                =========  =========
</TABLE>

Investment tax credits relating to scientific research and experimental
development have been accounted for using the cost reduction method, whereby
the expenditure is reduced by the credits. Investment tax credits were
approximately $200 for the year ended December 31, 1999 (1998 - $500;
1997 - $635).


14. COMMITMENTS AND CONTINGENCIES

(A)     OPERATING LEASES --
   Minimum annual commitments under operating leases, determined as at
   December 31, 1999 are as follows:

   2000                                  $4,668
   2001                                  $4,525
   2002                                  $3,730
   2003                                  $3,170
   2004                                  $1,885
   Total thereafter                      $5,179

   Total rental expense amounted to $3,990 for the year ended December 31,
   1999 (1998 - $2,813; 1997 - $2,577).

(B) FIXED ASSETS --
   At December 31, 1999 commitments to purchase fixed assets totalled $2,862.

(C) CONTINGENCIES --
   Certain legal actions have been brought against the Company. Management is
   of the opinion that the outcome of such actions will not have material
   adverse consequences to the Company.



<PAGE>



 UNCERTAINTY DUE TO THE YEAR 2000 ISSUE -
   The Year 2000 Issue arises because many computerized systems use two digits
   rather than four to identify a year.  Date-sensitive systems may recognize
   the year 2000 as 1900 or some other date, resulting in errors when
   information using year 2000 dates is processed.  In addition, similar
   problems may arise in some systems which use certain dates in 1999 to
   represent something other than a date.  Although the change in date has
   occurred, it is not possible to conclude that all aspects of the Year 2000
   Issue that may affect the entity, including those related to customers,
   suppliers, or other third parties, have been fully resolved.

15. RELATED PARTY TRANSACTIONS

Fees  charged  by  Clairvest  Group Inc., a shareholder, under an agreement to
provide advisory services amounted  to  $351  for  the year ended December 31,
1999 (1998 - $250).  Fees charged by American Industrial  Partners,  a company
affiliated with a shareholder, under an agreement to provide advisory services
amounted to $396 for the year ended December 31, 1999.

   (A)  BUSINESS ACQUISITIONS

1999 ACQUISITIONS
ACQUISITION OF ROYALTON
On  February  25,  1999,  the  Company, through Consoltex Mexico S.A. de C.V.,
acquired all the issued and outstanding  shares  of Royalton Mexicana, S.A. de
C.V. ("Royalton").  Royalton is a Mexican apparel  manufacturer  of  outerwear
and fashion apparel for the Mexican and U.S. markets.

ACQUISITION OF MARINO TECHNOLOGIES, INC.
On  July 1, 1999, the Company, through Consoltex (USA) Inc., acquired all  the
issued and outstanding shares of Marino Technologies, Inc. ("Marino").  Marino
is a  company  primarily  engaged  in  the  manufacturing  and distribution of
polypropylene-based flexible intermediate bulk container bags  in  the  United
States and Mexico.

ACQUISITION OF THE ASSETS OF ATLAS BAG INC.
On  October 1, 1999, the Company, through Marino, acquired the assets of Atlas
Bag Inc.  ("Atlas  Bag").   Atlas  Bag  is  engaged  in  the manufacturing and
distribution of polypropylene-based flexible intermediate  bulk container bags
in the United States.

The  acquisitions  were  accounted  for  under  the  purchase method  and  the
following  is  a  summary  of the net assets acquired at assigned  values  and
consideration paid.

<TABLE>
<CAPTION>
<S>                                                       <C>
NET ASSETS ACQUIRED:
Current assets                                             $22,479
Fixed assets                                                 6,239
Other assets                                                   997
Goodwill (to be amortized over a period of 15 years)        53,416
--------------------------------------------------------- --------
                                                            83,131
Less: Liabilities                                          (10,271)
--------------------------------------------------------- --------
                                                           $72,860
                                                         =========
CONSIDERATION PAID:
  Cash                                                     $54,262
  Accounts  payable  (balance  of sale payable over four
  years)                                                    18,598
--------------------------------------------------------- ----------
                                                            $72,860
                                                         ============
</TABLE>



<PAGE>


16. BUSINESS ACQUISITIONS (cont'd)

Assuming an effective acquisition date of January 1, 1999 and 1998 for the
1999 acquisitions, the pro-forma consolidated results of operations would have
been the following:

<TABLE>
<CAPTION>

<S>            <C>                      <C>
               YEAR ENDED                 YEAR ENDED
               December 31,               DECEMBER 31,
                  1999                        1998
               -------------             -------------
<S>             <C>                      <C>
                  (unaudited)             (unaudited)

Sales              $ 567,358                $ 577,178
                 ===========              ===========
Net loss           $  (5,182)                 $ 5,457
                 ===========              ===========
</TABLE>

17.   FINANCIAL INSTRUMENTS

(a) INTEREST RATE SWAP CONTRACTS
   The  Company is party to several interest rate swap contracts with original
   durations  ranging  from  three  to  four  years  to hedge against interest
   exposures on floating rate indebtedness.  The contracts  have the effect of
   converting the floating rate of interest on US$5,000 (1998  - US$15,000) of
   senior  bank indebtedness to a fixed rate. Under the interest  rate  swaps,
   the Company  has  agreed  with  the  other parties to exchange, every three
   months,  the  difference  between fixed rate  and  floating  rate  interest
   amounts calculated by reference to an agreed notional principal amount.

   The following table indicates the receive and pay rates on the swaps:

<TABLE>
<CAPTION>
                                                      December 31
<S>                                 <C>
</TABLE>
<TABLE>
<CAPTION>
                                           1999                 1998
                                    ------------------- ---------------------
<S>                                 <C>                 <C>
Notional principal amount                US$5,000             US$15,000
Receive -  floating rate                    LIBOR                 LIBOR
Pay - fixed rate (weighted average)         6.66%                 6.56%
</TABLE>

(b) FORWARD FOREIGN EXCHANGE CONTRACTS
   The   Company   mitigates   the   risk  associated  with  foreign  exchange
   fluctuations  related  to  U.S.  dollar   transactions  from  its  Canadian
   operations  by  entering into forward exchange  contracts.   Through  these
   contracts, the Company  is  committed  to  sell U.S. dollars and to receive
   Canadian dollars in future periods at specific rates.  Derivative financial
   instruments are not used for speculative purposes. The Company entered into
   contracts as detailed below:

<TABLE>
<CAPTION>
                                        Average rate         Contract amount
<S>                                <C>                    <C>
</TABLE>
<TABLE>
<CAPTION>
                                   1999     1998          1999     1998

<S>                                <C>      <C>           <C>      <C>
</TABLE>
<TABLE>
<CAPTION>

                                   (Canadian dollars)      (thousands
									      of U.S. dollars)
<S>                                <C>                     <C>
</TABLE>
<TABLE>
<CAPTION>
<S>                                <C>      <C>           <C>      <C>
Forward foreign exchange contracts
- 0 to 12 months                   $1.3711  $1.4318       $7,000   $7,800
Forward foreign exchange contracts
-  13 to 24 months                          $1.3711                $7,000
</TABLE>

(c) CREDIT  RISK  EXPOSURES
   In  addition  to the carrying amounts of its assets the Company's exposures
   to credit risk  include favourable interest rate swap contracts and forward
   foreign exchange contracts.

   Concentrations of  credit  risk on trade receivables due from customers are
   indicated in the following table  by  the  percentage  of the total balance
   receivable from customers in the specified categories:

<TABLE>
<CAPTION>
                                            December 31
<S>                                   <C>
</TABLE>
<TABLE>
<CAPTION>
                                              1999                1998
                                       ------------------- -------------------
<S>                                    <C>                 <C>
          Textile industry                    42.6%               43.7%
          Companies and state agencies
	    in Latin America                    24.8%               26.7%
</TABLE>


<PAGE>



17. FINANCIAL INSTRUMENTS (CONT'D)

(d) INTEREST RATE RISK  EXPOSURES
    The  Company's  exposures  to  interest  rate  risk  are  summarized in
    the following table:


                           		FIXED INTEREST RATE MATURING IN
                             ---------------------------------------------
<TABLE>
<CAPTION>
<S>                <C>       <C>       <C>       <C>       <C>       <C>
                                                 MORE
                   FLOATING  1 YEAR              THAN      NON-
                   INTEREST  OR        1 TO 5    1 TO 5    INTEREST
                   RATE      LESS      YEARS     YEARS     BEARING   TOTAL

<S>                <C>       <C>       <C>       <C>       <C>       <C>
DECEMBER 31, 1999
Financial assets     $4,285        $-        $-        $-        $-    $4,285
 Trade receivables        -         -         -         -    67,213    67,213
 Other receivables        -         -         -         -       433       433
                   --------  --------  --------  --------  --------  --------
                     $4,285        $-        $-        $-   $67,646   $71,931
                   ========  ========  ========  ========  ========  ========

Financial liabilities
 Bank loans         $56,123        $-        $-        $-        $-   $56,123
 Accounts payable
 and accrued
 liabilities              -         -         -         -    52,888    52,888
 Long-term debt      79,376         -   173,184         -         -   252,560
 Other long-term
 liabilities              -         -     4,388     8,943    23,767    10,436
 Interest rate
 swaps relating
 to long-term debt   (7,216)    7,216         -         -         -         -
                   --------  --------  --------  --------  --------  --------
                   $138,719    $7,216  $173,184    $4,388   $61,831  $385,338
                   ========  ========  ========  ========  ========  ========
</TABLE>


(e) FAIR VALUES OF FINANCIAL INSTRUMENTS

	                                DECEMBER 31,1999     December 31, 1998
<TABLE>
<CAPTION>

<S>                                   <C>       <C>       <C>       <C>
                                      CARRYING  FAIR      Carrying  Fair
						  AMOUNT    VALUE     amount    Value

 Long-term debt				  $,252,560 $250,828  $212,740  $216,413
 Other long-term liabilities             23,767   23,767     4,687     4,687
 Interest rate swap - unfavourable            -      (16)        -      (379)
 Forward foreign exchange contracts
 - unfavorable                                -     (557)        -    (2,017)
<S>                                    <C>      <C>     <C>     <C>

</TABLE>


The following summarizes the major methods and assumptions used in  estimating
the fair values of financial instruments:

Short-term financial instruments are valued at their carrying amounts included
in the balance sheet, which are reasonable estimates of fair value due  to the
relatively short period to maturity of the instruments.  This approach applies
to   cash,  trade  receivables,  bank  loans,  accounts  payable  and  accrued
liabilities.

Rates currently available to the Company for long-term debt with similar terms
and remaining   maturities  are  used  to  estimate the fair value of existing
borrowings at the present value of expected  cash flows if the debt instrument
is not publicly exchanged.  Closing market quotes  are  used  to calculate the
fair  value   of publicly- traded debt.  The same approach is used  for  other
long-term liabilities.

The fair value of interest rate swaps generally reflects the estimated amounts
that the Company  would  receive  or  pay  to  terminate  the contracts at the
reporting date.

The fair value of the forward foreign exchange contracts generally reflects
   the estimated amounts that the Company would receive or pay
to settle the contracts at the reporting date, taking into account the
unrealized gain or loss on open contracts.

18.  SEGMENT DISCLOSURES

The Corporation operates in the two reportable segments described below.
Each reportable segment offers different products and services and
requires different technology and marketing strategies.  The following
summary briefly describes the operations included in each of the
Company's reportable segments:

TEXTILE OPERATIONS - Includes the manufacture and distribution of nylon,
acetate and polyester-based fabrics and end products for Home Furnishings,
apparel, industrial and recreational markets.

POLYPROPYLENE OPERATIONS - Includes the manufacture and distribution of
polypropylene-based fabrics and bags and end-products for industrial and
agricultural markets.

The accounting policies of the reportable segments are the same as those
described in the note on Accounting Policies.   The Company evaluates
performance based on EBITDA, which represents sales, reflecting transfer
prices at market value, less allocable expenses before American Industrial
Partners management fee,  foreign exchange gain (loss), depreciation and
amortization, other income (expense), net,  financing costs and income taxes.
Intersegment sales are transacted at market value.  Segment assets are those
which are directly used in segment operations.

Beginning in 1999, the Company restructured its operations, resulting in the
combination of two previously reported segments into a new segment named
Textile Operations.  Prior years statements have been restated to reflect
this change.



<TABLE>
<CAPTION>
                                              Year ended December 31
<S>                                          <C>        <C>       <C>
</TABLE>
<TABLE>
<CAPTION>
BY SEGMENT
							   1999       1998      1997
-------------------------------------------- ---------  --------  --------
<S>                                          <C>        <C>       <C>
                                                        Restated  Restated
SALES:                                                 (Note 1-h) (Note 1-h)
Textile Operations -
  From external customers                     $317,087  $314,652  $329,950
Polypropylene Operations -
  From external customers                      193,256   166,647   179,497
-------------------------------------------- ---------  --------  --------
Consolidated sales                            $510,343  $481,299  $509,447
                                             =========  ========  ========
EBITDA:
  Textile Operations                            37,258    42,662    38,255
  Polypropylene Operations           	      25,678    26,170    30,075
-------------------------------------------- ---------  --------  --------
Total for reportable segments                   62,936    68,832    68,330
  Corporate                                     (5,245)   (5,073)   (7,124)
-------------------------------------------- ---------  --------  --------
Consolidated EBITDA                             57,691    63,759    61,206
   American  Industrial  Partners management
   fee                                            (396)        -         -
  Foreign exchange gain (loss)                     110    (3,434)      509
  Depreciation and amortization                (25,182)  (21,077)  (19,256)
  Other income (expense), net                   (4,435)     (255)        -
  Financing costs                              (32,680)  (29,906)  (28,004)
  Income taxes                                    (241)   (3,631)   (3,625)
--------------------------------------------- --------  --------  --------
Consolidated net earnings (loss)                (5,133)    5,456    10,830
                                              ========  ========  ========
</TABLE>



<PAGE>



18.   SEGMENT DISCLOSURES (CONT'D)


<TABLE>
<CAPTION>
                                            Year ended December 31
<S>                                          <C>      <C>     <C>
</TABLE>
<TABLE>
<CAPTION>                                    1999     1998    1997

<S>                                          <C>      <C>     <C>
CAPITAL EXPENDITURES:
  Textile Operations                           $6,409   $7,698   $5,534
  Polypropylene Operations                      9,420   13,441   14,689
-------------------------------------------- -------- -------- --------
Total for reportable segments                  15,829   21,139   20,223
  Corporate                                        19       64        8
-------------------------------------------- -------- -------- --------
Consolidated capital expenditures             $15,848  $21,203  $20,231
                                             ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
                                                 December 31
<S>                                           <C>      <C>      <C>
</TABLE>
<TABLE>
<CAPTION>

<S>                                           <C>      <C>
							    1999     1998
                                                       Restated
                                                       (Note 1-h)
SEGMENT ASSETS:
  Textile Operations                          $216,171 $203,789
  Polypropylene Operations                     278,081  215,515
--------------------------------------------  -------- --------
Total for reportable segments                 494,252  419,304
  Corporate                                     5,251    3,780
-------------------------------------------- -------- --------
Consolidated total assets                    $499,503 $423,084
                                             ======== ========
</TABLE>

<TABLE>
<CAPTION>
<S>                                          <C>

                                             Year ended December 31
</TABLE>
<TABLE>
<CAPTION>
BY GEOGRAPHIC AREA                           1999     1998     1997

<S>                                          <C>      <C>      <C>
SALES: (a)
  Canada                                      $84,994  $82,060   $83,867
  United States                               341,093  351,940   372,797
  Mexico                                       80,156   41,076    45,026
  Others                                        4,100    6,223     7,757
-------------------------------------------- -------- -------- ---------
Consolidated sales                           $510,343 $481,299  $509,447
                                             ======== ======== =========
</TABLE>

<TABLE>
<CAPTION>

                                                 December 31
<S>                                          <C>
</TABLE>
<TABLE>
<CAPTION>
                                             1999     1998
<S>                                          <C>      <C>

                                                      Restated
                                                      (Note 1-h)
CAPITAL ASSETS AND GOODWILL:
  Canada                                      $65,746  $68,142
  United States                               174,280  132,622
  Mexico                                       39,410   34,335
  Others                                          930    1,098
-------------------------------------------- -------- --------
Consolidated capital assets and goodwill     $280,366 $236,197
                                             ======== ========
</TABLE>

(a)Sales are attributed to countries based on location of customer.


19.   DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY
      ACCEPTED ACCOUNTING PRINCIPLES (GAAP)


The  financial  statements  have  been  prepared  in accordance with generally
accepted accounting principles (GAAP) in Canada which,  in  the  case  of  the
Company,  conform  in  all  material  respects with GAAP in the United States,
except as set forth below.

(a)  EARNINGS AND BALANCE SHEET ADJUSTMENTS


<TABLE>
<CAPTION>
                                            Year ended December 31
<S>                                         <C>      <C>      <C>
</TABLE>
<TABLE>
<CAPTION>
EARNINGS ADJUSTMENTS                          1999     1998     1997
                                            -------- -------- --------
<S>                                         <C>      <C>      <C>
                                                     Restated Restated
                                                     (Note 1-h)(Note 1-h)
NET  EARNINGS  (LOSS)  IN  ACCORDANCE  WITH
CANADIAN GAAP                                $(5,133)    $5,456   $10,830
Unrealized loss on translation of long-term
debt and obligations  (A)                      4,784     (3,251)   (2,689)
Reduction of depreciation (C)                    395        395       395
Difference  in  determination  of  goodwill
amortization of Balson Hercules (B)              190          -         -
Ajustments with respect to the purchase of
Balson-Hercules (D)                               53         53        53
Unrealized  gain  (loss) on foreign forward
exchange contracts (F)                         1,460     (1,298)     (719)
Tax effect related to the above adjustments     (570)    (1,112)    1,223
-------------------------------------------   --------  --------  --------

NET  EARNINGS  IN  ACCORDANCE  WITH  UNITED
STATES GAAP                                     $1,179      $243    $9,093
                                             =========  ========  ========
</TABLE>



<PAGE>



19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES(GAAP) (CONT'D)

<TABLE>
<CAPTION>

                                                           December 31
<S>                                                       <C>    <C>
</TABLE>
<TABLE>
<CAPTION>
BALANCE SHEET ADJUSTMENTS                                 1999     1998
-------------------------------------------------------- -------- --------

<S>                                                      <C>      <C>

                                                                  Restated
                                                                  (Note 1-h)
FIXED ASSETS, NET, UNDER CANADIAN GAAP                   $162,403 $162,106
Reduction of accumulated depreciation                         395      395
Cumulative  impact  of  prior  years,  including foreign
exchange                                                   (3,435)  (3,830)
-------------------------------------------------------- -------- --------

Fixed assets, net, under United States GAAP              $159,363 $158,671
                                                         ======== ========
GOODWILL, NET, UNDER CANADIAN GAAP                        117,963   74,091
Difference in the determination of goodwill amortization
- Balson-Hercules (D)                                          53       53
Difference in the determination of goodwill amortization
- Balson Hercules (B)                                         190        -
Cumulative  impact  of  prior  years,  including foreign
exchange                                                   (1,995)  (2,048)
-------------------------------------------------------- -------- --------

GOODWILL, NET, UNDER UNITED STATES GAAP                  $116,211  $72,096
                                                         ======== ========

OTHER ASSETS UNDER CANADIAN GAAP                            8,749   15,558
Unrealized  gain (loss) on translation of long-term debt
and obligations (A)                                         4,784   (3,251)
Employee loan to purchase Company shares (E)                1,383       99
Cumulative impact  of  prior  years,  including  foreign
exchange                                                    (8,262)   5,110)
									   --------- --------
OTHER ASSETS UNDER UNITED STATES GAAP                       $6,654   $7,296
                                                         ========= ========

OTHER LONG-TERM LIABILITIES UNDER CANADIAN GAAP             23,767    4,687
Unrealized  gain  (loss)  on  foreign  forward  exchange
contracts (F)                                               (1,460)   1,298
Cumulative  impact  of  prior  years,  including foreign
exchange                                                     2,017      719
--------------------------------------------------------  -------- --------

OTHER   LONG-TERM   LIABILITIES,   INCLUDING  SHORT-TERM
PORTION, UNDER UNITED STATES GAAP                          $24,324   $6,704
                                                          ======== ========
FUTURE  INCOME  TAX  ASSETS (LIABILITIES) UNDER CANADIAN
GAAP                						    $(30,350)$(34,134)
Tax effect related to the above adjustments                   (570)  (1,112)
Cumulative  impact  of  prior  years,  including foreign
exchange                                                     1,413    2,525
--------------------------------------------------------   -------- --------

FUTURE  INCOME  TAX  ASSETS  (LIABILITIES)  UNDER UNITED
STATES GAAP                                               $(29,507) $(32,721)
                                                          ========  ========

Represented by:
Future tax assets                                            2,843     1,431
                                                          ========  ========
Future tax liabilities                                    $(32,350) $(34,152)
                                                          ========  ========
</TABLE>



<PAGE>



19. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
   ACCOUNTING PRINCIPLES (GAAP)  (CONT'D)


<TABLE>
<CAPTION>

                                                           December 31
<S>                                                      <C> <C>
</TABLE>
<TABLE>
<CAPTION>

									   1999      1998
                                                         --------- --------
<S>                                                      <C>       <C>
                                                                   Restated
                                                                  (Note 1-h)
SHAREHOLDERS' EQUITY UNDER CANADIAN GAAP                  $76,987    $74,272
Unrealized gain (loss) translation of long-term debt and
obligations (A)                                             4,784     (3,251)
Reduction of accumulated depreciation (C)                     395        395
Difference  in determination of goodwill amortization of
Balson Hercules (B)                                           190          -
Employee loans to purchase Company shares (E)               1,383         99
Adjustments with  respect  to  the  purchase  of Balson-
Hercules (D)                                                   53         53
Unrealized  gain  (loss)  on  foreign  forward  exchange
contracts (F)                                               1,460     (1,298)
Tax effect related to the above adjustments                  (570)    (1,112)
Cumulative  effect  of  prior  years,  including foreign
exchange                                                  (14,296)    (9,182)
									    -------    -------
SHAREHOLDERS' EQUITY UNDER UNITED STATES GAAP              70,386     59,976
                                                          =======    =======
</TABLE>

     (A)  Under Canadian GAAP, unrealized exchange gains and losses arising on
     the translation  of long-term monetary items are   deferred and amortized
     over the life of such items whereas, under United States GAAP, such gains
     or losses would be included in earnings as they occur.

   (B) In Canada, there are no specific standards which require discounting of
   non-interest bearing payables and imputing interest.
     Under United States  GAAP, such payables are discounted to their present
    value using the prevailing market rate at the time of
     the issue and imputed interest is included in earnings.

   (C) In Canada, upon  the  acquisition  of a company, the excess of the fair
     value of the net assets acquired over  the  purchase  price is applied to
     reduce  the values assigned to current and non-current identifiable
     non-monetary  assets.  Consequently, upon the acquisition of Consoltex
     Canada Inc., a portion  of  the  excess  of  the  fair  value  of the net
     assets acquired over the purchase price was applied to reduce the value
     assigned to inventory by $3,000. Under United States GAAP, the excess of
     fair value over purchase price can only be allocated against non-current
     assets.

   (D) Under Canadian GAAP, certain guaranteed remuneration  to be paid over
     four years in relation to the acquisition of Balson-Hercules was recorded
     as part of the acquisition price.  Under United States GAAP, such amounts
     would be charged to earnings as they are incurred.

   (E)  Under Canadian GAAP, loans issued by the Company to its employees  and
     Directors  for  the  purchase  of  Company  shares  are included in other
     receivables.  Under U.S. GAAP, these loans are classified  as a reduction
     of capital.

   (F)  Gains  and losses arising on forward exchange contracts identified  as
     hedges of uncommitted  transactions  are  included  in  earnings  only at
     maturity.  Under U.S. GAAP, unrealized gains and losses on such contracts
     are included in earnings as recognized.


<PAGE>




19. DIFFERENCES  BETWEEN  CANADIAN  AND  UNITED  STATES  GENERALLY ACCEPTED
    ACCOUNTING PRINCIPLES (GAAP)  (CONT'D)


(B) BORROWINGS
    During the year ended December 31, 1999, the average amount  of
    short-term borrowings outstanding was $61,616 (1998 - $45,397;
    1997 - $34,683)and the weighted  average  interest  rate  on such
    borrowings  was 7.29%  (1998  - 7.28%;  1997  -  7.66%);  The
    weighted  average  interest  rate  on  total borrowings of the Company
    was 9.84% during the year ended December 31, 1999(1998 - 9.93%;
    1997 - 10.08%).

(C) FOREIGN EXCHANGE GAINS (LOSSES)
    The aggregate foreign exchange gain (loss) included in net earnings for
    the year ended December 31, 1999 was $(869) (1998 - $(4,635); 1997 - $760).


(D) CONSOLIDATED  COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
<S>                                    <C>
                                       Year ended December 31
</TABLE>
<TABLE>
<CAPTION>
                                 1999                 1998              1997
                    ------------------  ------------------- ------------------
<S>                 <C>                 <C>                 <C>
Net earnings (loss)
in accordance with
U.S. GAAP$                       1,179            $    243             $ 9,093

Foreign currency
translation
adjustments                      2,142                (123)              (234)
			  ------------------   ------------------ ------------------

Consolidated
comprehensive
income (loss)		      $  3,321            $    120             $ 8,859
			         ===========         ===========          ==========

</TABLE>


(E)    IMPACT OF ACCOUNTING PRONOUNCEMENTS NOT YET IMPLEMENTED

   ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
   In 1998, FASB 133, "Accounting for Derivative Instruments and Hedging
   Activities" was issued.  The Company must adopt this statement in fiscal
   2001 for United States reporting purposes.  This statement outlines
   accounting and reporting standards for derivative instruments and hedging
   activities.  Under this standard, all derivatives will be recognized at
   fair value and will be accounted for depending on the intended use of each
   derivative and its designation as a hedge.  The impact of implementing
   this standard on the Company's consolidated balance sheets and
   consolidated statements  or earnings and comprehensive income is
   not yet determinable.


20. FINANCIAL STATEMENTS OF CONSOLTEX (USA) INC. AND THE GUARANTOR
   SUBSIDIARIES

   The Notes are guaranteed, on an unsecured  senior  subordinated  basis,  by
   active  subsidiaries  of  the  Issuers.   Separate financial statements for
   Consoltex (USA) Inc. and the guarantor subsidiaries  (the "Guarantors") are
   not included herein because (i) the Issuers and the Guarantors  are jointly
   and  severally  liable  with  respect to the Notes, (ii) the aggregate  net
   assets, earnings and equity of  Consoltex (USA) Inc. and the Guarantors are
   substantially equivalent to the net  assets,  earnings  and  equity  of the
   Company  on  a  consolidated  basis,  and  (iii)  such  separate  financial
   statements are not deemed material to investors.

<PAGE>