1. The Principal amount of Term Loans in Rupee and Foreign Currency Loans are secured by a first mortgage on
Company's immovable properties, both present and future and first charge by way of hypothecation of all the
Company's Movable (Save and except Book Debts) including movable Machinery Spares, Tools and Accessories,
present and future subject to the prior charge in favour of the Company's Bankers on the Company's Stock of
Raw Materials, Semi Finished and Finished Goods, Consumable Stores and even other movables.  The mortgage and
the charge created in favour of the Financial Institutions and Bank rank pari-passu, inter-se.  Further, they
are secured by irrevocable and unconditional personal guarantees in individual capacities of Shri R.C.
Agrawal and his Associate concerns.
 
 2. Loans from Banks on Cash Credit Accounts are secured by Hypothecation of Raw Materials, Stores and
Spares, Finished Stocks and personal guarantee of Shri R.C. Agrawal.
 
 3. Foreign Currency Loans are expressed in Indian Currency at the rate
 of exchange prevailing on the date of the Balance Sheet.  The resultant
 increase of Rs. 246.94 lacs (Previous year Rs. Nil Lacs) is added in
 the value of respective Fixed Assets.
 
 4. The Company is accounting for Excise Duty on Finished Goods on
 Clearance of goods from Factory and Customs Duty on clearance of material from Bonded Warehouse.  The Excise
Duty amounting to Rs. 52.55
 lacs (Previous year Rs. 89.02 Lacs) for finished goods lying in factory
 premises has neither been provided for nor considered in valuation of
 inventories.  This accounting treatment has no impact on the loss for
 the year.
 
 5. No Provisions for Investment Allowance Reserve amounting to Rs.
 253.22 Lacs have been made for earlier years.  The same will be created
 in the year of taxable profits.
 
 6. Remuneration includes benefits to Managing Director and other Directors Rs. 2.70 Lacs (Previous Year Rs.
2.38 Lacs).
 
 7. The Balance in Secured Loans from Financial Institutions are subject
 to confirmation and reconciliation.
 
 8. Sundry Creditors, Sundry Debtors, Claims recoverable and advances to
 parties contain some unacknowledged balances pending analysis/reconciliation and confirmations.  This
includes amount
 recoverable from Public Sector undertaking towards
 unacknowledged/unconfirmed debit notes/balances aggregating to Rs.
 600.33 Lacs.  The impact of non realisation, if any on this account is
 not presently quantifiable.
 
 9. The company's accumulated losses have far exceeded the Net Worth of
 the company and AAIFR rejected the company's appeal against the order
 of BIFR recommending winding up of the company.  The Accounts of the
 company have been prepared on a Going concern basis in view of the
 company continuing to carry on its usual operations and its proposal
 for filing writ petition/appeal in the High Court against the order of
 AAIFR.
 
 10. Sundry Debtors (including interest up to 31.03.1998) outstanding for a period exceeding Six months
considered doubtful amounting to Rs. 95.67 Lacs (Previous year Rs. 19.65 Lacs).  Legal steps have been
initiated by the management for the recovery of such amounts and no provision has been made in respect of
such debts in the Books.
 
 11. Reconciliation of Modvat Credit on capital goods received in earlier years and subsequent adjustment
thereof is under scrutiny.  The impact not being material will be considered in the next year on completion
of reconciliation.
 
 12. The Provision for Interest on foreign currency and Rupee term loans
 from Financial Institutions has been made @ 10% per annum & 14% per
 annum respectively and credited to the respective accounts.
 
 13. The Previous year figures have been re-worked, re-grouped, re-arranged and/or re-classified wherever
necessary to make them
 comparable with the figures of this year.
 
 Notes on Secured Loans:
 
 1. Includes Rs. 196.45 lacs (Pre. year - Rs. 196.45 lacs) funded
 interest loan.
 
 2. Secured loans include loans of Rs. 2797.17 lacs (Pre. year Rs.
 2548.75 lacs) repayable within one year.