FINANCIAL RESULTS

Particulars                                Current Year   Previous Year
                                               (Rs.)          (Rs.)

Profit/(Loss)before Depreciation 
and Income tax                              (29,75,758)     95,19,678
Less: Provision for depreciation              3,17,904       5,33,581
Add: Provision for earlier 
years Written Back                           15,47,178           -
Less: Provision for Income Tax                   -          16,54,000
Profit/(Loss) for the period                (17,46,484)     73,32,097

OPERATIONS

During the year under review, the Company has suffered a net loss of Rs.17.46 lacs.. Inspite of the persistent efforts, no new business has been identified. Efforts are still being made to re-activate the Companys non-molasses based alcohol manufacturing unit at Aurangabad.

DIVIDENDS

After reviewing the financial position of the Company, your Directors do not recommend any dividend on Equity Shares for the year ended 31st March, 2005.

SUBSIDIARY COMPANIES

During the year under report, Me Killigan Distillery Limited continues to be a wholly owned subsidiary of your Company

A statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary company is attached to the accounts. The audited statement of accounts and the Auditors Report thereon along with Directors Report of your Companys subsidiary is annexed.

DIRECTORS

The Board of Directors at its meeting held on 30th August, 2005 and at the recommendation of the Remuneration Committee at its meeting held on 5th August, 2005 has re-appointed Mr. Devinder Raj Narang as Managing Director w.e.f 1st October, 2005 for a period of one year. The details of the terms of re-appointment are given in the notice convening the Annual General Meeting.

During the year under review, Mr. Sudarshan Goyal resigned and, in that casual vacancy, the Board appointed Mr Surender Kumar Sharma as a Director of your Company. He holds office as a Director upto the date of the ensuing Annual General Meeting. Your Company has received a notice u/s. 257 of the Companies Act, 1956 from a member proposing the appointment of Mr. Surender Kumar Sharma as Director and the said appointment is proposed in the notice for the ensuring Annual General Meeting for your approval

The Board expresses its thanks for the valuable contributions made by Mr. Sudarshan Goyal during his tenure as director of your Company.

During the current year, Mr. Tulsi Dass Sethi has been appointed as Additional Director of your Company. He holds office as Additional Director upto the date of the ensuing Annual General Meeting. A notice u/s.257 of the Companies Act, 1956 has been received from a member proposing the appointment of Mr. Tulsi Dass Sethi as Director and the said appointment is proposed in the notice for the ensuing Annual General Meeting for your approval

Mr. Avdesh Maheshwari, who is retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment

AUDITORS

Mis. S.P. Nagrath & Co., New Delhi, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have expressed their willingness to serve, if appointed. They have also confirmed that if re- appointed their appointment will be within the limits prescribed under the Companies Act, 1956

AUDITORS REPORT

The observations of the Auditors are explained, wherever necessary in appropriate notes to the accounts PARTICULARS OF EMPLOYEES

The Company has not paid any remuneration attracting the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence no particulars are furnished in this regard.

DIRECTORS1 RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA)of the Companies Act, 1956 with regard to Directors Responsibility Statement, it is hereby confirmed :

1. that in the preparation of the accounts for the financial year ended 31 st March, 2005, the applicable accounting standards have been followed and there are no material departures;

2. that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

3. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. that the Directors have prepared the accounts for the financial year ended 31st March, 2005 on a going concern basis.

FIXED DEPOSITS

During the year, your Company has not accepted any Fixed Deposits. As reported last year, the Company had repaid all the fixed deposits and there were no overdue deposits other than unclaimed deposits.

LISTING DETAILS

The Equity Shares of your Company continue to be listed during the year under review at the following Stock Exchanges:

1. The Uttar Pradesh Stock Exchange Association Limited

2. The Stock Exchange, Mumbai

3. The Delhi Stock Exchange Association Limited

AUDIT COMMITTEE

The Audit Committee has reviewed the financial statements for the period ending 31st March, 2005 and has not given any adverse remarks. It has recommended the re-appointment of M/s. S.P. Nagrath & Co. as Statutory Auditors of the Company for another term.

CORPORATE GOVERNANCE

The Company has been proactive in following the principles and practices of good corporate governance. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreements of the Stock Exchange are complied with. A report on the Corporate Governance duly certified by Statutory Auditors is enclosed and forms part of the Directors Report

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities which are being carried on by the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Directors) Rules 1988, concerning conservation of energy and technology absorption respectively, are not applicable to the Compjsnv

During the year under review, foreign exchange earnings and outgo were nil. ACKNOWLEDGMENT

The Directors wish to thank the Government authorities, bankers, other business associates and shareholders for their unstinted support, assistance and valuable guidance.

                                    For & on behalf of the Board of 
                                    The Narang Industries Limited

                                          (Devmder Raj Narang)
                                           Managing Director

                                             (Masina Ram)
                                               Director
New Delhi, 30th August, 2005