(i) Accrual method of accounting is followed with regard to all the 
 transactions except the insurance claims which are accounted for on cash 
 basis.
 
 (ii) Sales are inclusive of excise duty but exclusive of sales tax.
 
 (iii) Inventories are valued as under :
 
 a. Raw Material - at cost
 
 b. Stores, Spare Parts & Fuel - at cost
 
 c. Work - in - proses & Finished goods at lower of cost or net 
 realisable value.  Cost includes manufacturing overhead, general & 
 Administrative expenses, depreciation & interest.
 
 (iv) Deferred Revenue/ Miscellaneous Expenditure are being amortised 
 over a period of ten years.
 
 (v) Fixed Assets :
 
 (a) Fixed assets are stated at their cost of acquisition which includes 
 expenses incurred on acquisition, construction and/or installation.  
 Fixed assets consisting of land, building and plant & machinery were 
 revalued by an approved valuer as on 31st March 1993 and accordingly a 
 sum of Rs. 23,32,82,490/- was credited to Revaluation Reserve by debting 
 to respective assets.
 
 (b) Depreciation has been provided for at the rates prescribed in 
 schedule xiv of the Companies Act 1956 (as amended) on straight line 
 method except in case of major part of plant machinery (excluding 
 electrical installations) costing Rs. 22,3,15,700/- where it has been 
 provided for on machine hour rate basis, as was done during previous 
 period.  As a result depreciation stands reduced by Rs. 1,40,07,519/- 
 for the current period and Rs. 1,78,00,591/- for the previous period.
 
 In respect of the amount added on revaluation of assets, depreciation 
 has been calculated as per method given above.  Such additional charges 
 amounting to Rs. 1,65,14,125/- (Rs. 1,39,09,298/-) on account of 
 revaluation have been withdrawn from the Revaluation Reserve and 
 credited to Profit & Loss Account.
 
 c. Revaluation of individual machinery as on 31.03.93 were not available 
 in the Valuer's Report, and as a consequence, the same have been taken 
 in the books of accounts on Pro-rata basis and depreciation has been 
 calculated accordingly.
 
 (vi) Gratuity is accounted for on accrual basis as per the provisions of 
 Payment of Gratuity Act.
 
 (vii) There has been in the accounting policy followed by the company 
 regarding the effect of foreign currency fluctuation which was accounted 
 for on cash basis till previous period.  During the period, the same has 
 been accounted for on accrual basis.  Had there been no change in the 
 accounting policy, secured loans and Plant & Machinery would have been 
 stated lower by Rs. 3,70,07,492/- each.