TERM LOANS
 
 IFCI Limited
 
 Secured by equitable mortgage of immovable properties both present and
 future and hypothecation of all movable assets including uncalled
 capital both present and future (save and except book debts) subject to
 charges created/to be created in favour of Banks on stocks of raw
 materials, stores, work-in-process, finished goods and book debts and
 guaranteed by some of the Directors & second charge on Current Assets
 hypothicated to Banks ranking pari-passu among the term lenders.
 
 IFCI Limited
 
 Secured by equitable mortgage of immovable properties both present and
 future and hypothecation of all movable assets including uncalled
 capital both present and future (save and except book debts) subject to
 charges created/to be created in favour of Banks on stocks of raw
 materials, stores, work-in-process, finished goods and book debts and
 guaranteed by some of the Directors & second charge on Current Assets
 hypothicated to Banks ranking pari-passu among the term lenders.
 
 State Bank of Patiala (under TUF Scheme)
 
 Secured by equitable mortgage of immovable properties both present and
 future and hypothecation of all movable assets including uncalled
 capital both present and future (save and except current assets)
 ranking pari-passu with other term lenders.
 
 ICICI Bank Limited
 
 Secured by equitable mortgage of immovable properties both present and
 future and hypothecation of all movable assets including uncalled
 capital both present and future (save and except book debts) subject to
 charges created/to be created in favour of Banks on stocks of raw
 materials, stores, work-in-process, finished goods and book debts and
 guaranteed by some of the Directors & second charge on Current Assets
 hypothecated to Banks ranking pari-passu among the term lenders.  Under
 the restructuring scheme, besides reduction in rate of interest the
 ICICI Bank has also given moratorium period for interest payment upto
 15.03.2005 amounting to Rs. 1500 Lacs which is additionally secured by
 Secured Non Convertible Debenture having redemption value equivalent to
 Rs. 1500 Lacs by corporate guarantor of loan i.e. Nahar Export Ltd.
 [Interest provided upto 31.03.2004 amounting to Rs. 1023.29 Lacs
 (previous year Rs. 523.29 lacs) has been shown as interest accured and
 due below].
 
 Industrial Development Bank of India (Under TUF Scheme)
 
 Secured by equitable mortgage of immovable properties both present and
 future and hypothecation of all movable assets including uncalled
 capital both present and future (save & except book debts) subject to
 charges created/to be created in favour of Banks on stocks of raw
 materials, stores, work-in-process, finished goods and book debts and
 guaranteed by some of the Directors & second charge on Current Assets
 hypothecated to Banks ranking pari-passu among the term lenders.
 
 Interest accrued and due
 
 1. CONTINGENT LIABILITIES NOT PROVIDED FOR :
 
 a) Capital Commitments not provided for are estimated at Rs. 117.63
 Lacs (Previous year Rs. 0.75 lacs).
 
 b) Sales tax demands against which the company has preferred appeals
 amount to Rs. 70.47 lacs (previous year Rs. Nil).
 
 c) Letter of credits out standing in favour of suppliers Rs. 18.65 Lacs
 (Previous year Rs. Nil).
 
 d) Bank guarantees outstanding in favour of suppliers and others
 Rs. 103.43 Lacs (Previous year Rs. 96.94 Lacs)
 
 e) The company has executed bonds for aggregate amount of Rs. 7285.00
 Lacs in favour of the President of India for the fulfillment of the
 obligations under the Central Excise Act & Customs Act, 1962 (Previous
 year 8940.17 Lacs)
 
 f) Disputed liabilities towards excise duty on disallowance of cenvat
 credit/other.matters amounting to Rs. 370.71 lacs (Previous year Rs.
 596.30 lacs). The company has filed suitable replies to the concerned
 authorities.
 
 g) Export bills discounted and domestic bills discounted during the
 year under Letter of Credit outstanding as on 31.03.2004 for Rs.850.52
 Lacs and Rs. 39.57 Lacs respectively (Previous year Rs. 465.80 Lacs and
 Rs.205.80 Lacs) have been reduced from bank borrowings and
 correspondingly from the Sundry Debtors.
 
 2. The balances of sundry debtors, advances recoverable and sundry
 creditors are subject to their confirmation.
 
 3. The execution of title deeds in case of residential flats at Gurgaon
 is in progress.
 
 4. The delivery of 800 shares of M/s. Nahar Industrial Enterprises
 Limited is pending with share broker.
 
 5. Market value of quoted investments is Rs. 1250.51 Lacs (Previous
 year Rs. 377.16 Lacs). In the opinion of Board of Directors, the
 diminution in the value of long term investments is not of the
 permanent nature, hence no adjustments have been made in the books of
 account.
 
 6. Due to inadequacy of profits, the company has paid managerial
 remuneration within the minimum limits prescribed under Schedule XIII
 to the Companies Act, 1956. The remuneration paid/payable to Vice
 Chairman-cum-Managing Director and Executive Director is as under:
 
                                                          (Rs. in `000)
                                           Current Year   Previous Year
 
 Salaries and allowances                          1,200           1,337
 Contribution to provident & family pension funds    96              99
 Expenditure on perquisites                           2               6
 Total                                            1,298           1,442
 
 Due to inadequacy of profits, no commission has been paid to Vice
 Chairman-cum-Managing Director.
 
 7. The company has slopped manufacturing activities in its Steel Plant
 at Ludhiana during the year ended 31st March, 2002 & disposed off a
 major portion of plant & machinery and factory building. Remaining
 assets held for disposal having book value of Rs. 54.29 lacs (W.D.V.) &
 Capital work in progress of Rs. 180.41 lacs (realisable value based on
 valuation report) have been shown in other currents assets.
 Depreciation for the year ended 31.03.2004 includes Rs. 271.63 lacs on
 account of amortisation of capital work in progress.
 
 8. As per the practice consistently followed, excise duty on finished
 goods lying in the plants at the end of the year is neither included in
 expenditure nor valued in such stocks, but is accounted for on
 clearance of goods. This accounting treatment has no impact on the
 profit/loss.
 
 9. Miscellaneous Income include interest received from the customers
 related to earlier years amounting to Rs. 14.16 lacs (tax deducted at
 source Rs. 2.97 lacs).
 
 10. Sundry creditors due to small scale and ancillary undertakings
 could not be ascertained due to lack of information.
 
 11. In the opinion of the Board of Directors, the Current Assets, Loans
 and Advances are having the value at which they are stated in the
 Balance Sheet if realized in the ordinary course of business except as
 otherwise specified.
 
 12. Previous year's figures have been regrouped/rearranged wherever
 considered necessary, to make them comparable.
 
 13. Annexure I to XVI form an integral part of Balance Sheet and Profit
 and Loss account and have been duly authenticated as such.
 
 14. Additional information pursuant to paragraphs 3 and 4 of part II of
 Schedule VI to the Companies Act, 1956 (figures in bracket represent
 information for the previous year):
 
 a) Production excludes captive consumption 2139 MTs (Previous year 4018
 MTs), excludes 67 MTs material reprocessed (Previous year 134 MTs) and
 includes 47 MTs production on job work basis (Previous year Nil).
 
 b) Sales include inter unit transfers of 14 MTs (Previous year 55 MTs)
 amounting to Rs. 1921 thousands (Previous year Rs. 6071 thousands),
 include 47 MTs processed on job work basis (Previous year Nil)
 amounting to Rs. 1972 thousands (Previous year Nil).
 
 c) Amount includes value of waste & miscellaneous sale.
 
 d) Includes inter unit transfers of Rs. 1632 thousands (Previous year
 923 thousands).