All the above loans are secured against hypothecation of Stock of Raw
 Material, Stock in Process, Finished Goods, Book Debts, Spares &
 Receivables of the Company ranking pari-passu.
 
 TERM LOAN From IFCI
 
 Interest on term loan - IFCI Above loan is secured against all movable
 assets of the Company except Book Debts & stock hypothecated with the
 banks for the working capital limits.  Also secured against mortgage by
 deposit of title deeds in respect of company's land admeasuring 5.78
 acres situated at 24, Dharuhera Industrial Estate, Distt.  Rewari,
 Haryana and 4 acres of plot situated at NH-8, Narshingpur together with
 all building structures and sheds constructed and all the plant &
 machinery and furniture & fittings attached thereto.
 
 1. The Company has been declared as a Sick Industrial Company by the
 Board for Industrial & Financial Reconstruction (BIFR), on a reference
 made to it by the Company during the year.  Since the Company is
 hopeful of acceptance of its revival proposal being finalised by the
 Operating Agency for consideration of BIFR, it has prepared its
 accounts on a going concern basis.
 
 2. Contingent liabilities exists in respect of :
 
 Claims not acknowledged as debts -
 
 (i) Interest and loss that may arise due to exchange rate difference on
 settlement of claim made by Mobil Sales as referred to in A9 above.
 
 i) Interest that may become payable on passing of orders by Appropriate
 Courts on the claims lodged by some of the loan creditors.
 
 ii) Amount deducted by customers as commission or on account of rate
 difference etc. to the extent not recognised by the Company (Amounts
 not determined).
 
 3. Estimated amount of contracts remaining to be executed on capital
 account and not provided for Rs. Nil.
 
 4. Balance in the accounts of many sundry creditors, other creditors
 and loans & advances including the ones reflected under capital work in
 progress being unconfirmed are subject to adjustment on reconciliation.
 The company had undertaken an exercise to reconcile the Sundry Debtors
 balances and see their recoverability.  Accordingly, the company wrote
 off debts amounting to Rs. 7854519/- and provided Rs. 19142713/-
 towards doubtful debts last year besides adjusting for rate
 differences, discounts etc., Rs. 15,25,58,147/- under the head prior
 period expenses since they related to earlier years.  The Company has
 made a further provision of Rs. 4,32,787/- towards doubtful debts this
 year.  The remaining adjustments, if any would be made in the accounts
 on completion of that exercise.
 
 5. No provision has been made in the accounts for interest payable (Rs.
 53,28,683/-) on most of the accounts listed under Inter Corporate
 Deposits, Bills Discounted and Deferred Payment creditors in view of
 the exercise undertaken by the Company to renegotiate the agreed terms
 and conditions.
 
 6. Since the Company has not been able to obtain the required
 information to work out the book value of its investment in Equity
 Shares of M/s Mishan Flora Ltd., the same is reflected at cost.
 
 7. On 25/04/1997, in terms of a resolution passed at Shareholders Extra
 Ordinary General Meeting held on 29/01/1997, the Company has allotted
 to the promoters, on preferential basis, 30,00,000 equity shares of Rs.
 10/- each at a premium of Rs. 2/- per share, and 3,24,480 optional
 tradeable warrant of Rs. 240/ - each, Rs. 48/- called and paid up,
 entitling them to apply, within 18 months from its date of allotment,
 for minimum of five and maximum upto twenty equity shares of the
 Company per warrant at such price, terms and conditions to be decided
 by the Board of Directors as per then prevailing SEBI or relevant
 guidelines.  The promoters have since exercised the option for
 allotment of five Equity shares per warrant.  These 30,00,000 equity
 share's and the 1622400 equity shares allotted on exercise of option
 are not transferable for a period of 5 years from the respective dates
 of allotment.