1. Notes on term loans: 
 
 a) Cash Credit Loan from Bank is secured by hypothecation of all the 
 present and future stock of raw materials, finished goods (including in 
 transit), work-in-process, packing materials, stores and book debts.
 
 b) Term loans from Financial Institutions and Bank are secured against 
 mortgage of immovable assets by deposit of Title deeds ranking 
 pari-passu with each other and first charge by way of hypothecation of 
 movables both present and future (save and except book debts) subject to 
 prior charge on stocks including finished goods and book debts in favour 
 of the Company's Bankers for working capital facilities.
 
 2. Cumulative preference shares issued by company have become due for 
 redemption on 6th October, 1996 but due to financial constraints, the 
 Company has made no payment against these shares till yet.
 
 3. Land includes Rs. 4,88,676/- towards cost of 8.89 acres of land 
 acquired by the Uttar Pradesh State Government under Uttar Pradesh 
 Zamindari Abolition and Land Reforms Act, 1950.  However, the state 
 Government has agreed to lease this land to the Company for a period 
 extendable for another 30 years for which agreement is yet to be entered 
 with the State Government.
 
 4. The excise authorities seized a part of excise and account records of 
 the company maintained till date during their visit on 13th February, 
 1997.  Hence the same was into available for verification by the 
 auditors.
 
 5. Creditors, debtors and advances are subject to reconciliation and 
 confirmation.
 
 6. Advances recoverable include Rs. 3,17,510/- being amount recoverable 
 from U.P.S.E.B. on account of interest on security deposit under appeal 
 in the Supreme Court.
 
 7. Previous period expenses/ income debited to respective heads in 
 Profit & Loss Account are Rs. 3,06,123/- (Rs. 27,00,117/-) and Rs. 
 20,62,158/- (Rs. 36,27,456/-) respectively.
 
 8. The accounts have been prepared for the period of 18 months ended on 
 31st March, 1997.  Previous period figures are also for the period of 18 
 months.
 
 9. Additional information pursuant to paragraph 3, 4(c) and 4(d) of 
 Part II of Schedule VI to Companies Act, 1956.