a) General
 
 The accounts of the company are prepared under the Historical cost
 Convention using the accrual method of accounting.
 
 b) Fixed Assets
 
 Fixed Assets are carried at cost less depreciation.  The cost of
 fixed assets includes interest on specific borrowing obtained for the
 purpose of acquiring fixed asses upto the date of commissioning of
 the assets and other pre-operative expenses incurred upto the last
 date of the trial run netted off by expenses/income arising out of
 production during the said period.
 
 - Depreciation on the fixed assets acquired and put to use during
 the project implementation, calculated upto the last date of trial
 run is included in pre-operative expenses.
 
 c) Preliminary and Share Issue Expenses
 
 Preliminary expenses in respect of completed project(s) are written
 off in equal installments over a period of ten accounting
 years/periods.
 
 d) Debenture Issue Expenses
 
 Expenditure on Debenture Issue is written off on pro-rata basis over
 a period of seven years, on the expiry of which the debentures would
 be fully redeemed.
 
 e) Deferred Revenue Expenses
 
 Expenditure incurred for acquisition of mines is written off on
 pro-rata basis over a period of five years being the period of lease.
 
  f)  Capital work-In-progress
 
 Projects under commissioning and other capital Work-in-Progress are
 carried at cost comprising direct cost, interest on specific
 borrowing, other pre-operative expenses pending capitalisation and
 depreciation on assets used during/for acquisition of capital
 work-in-progress
 
 g) Investments
 Investments are recorded at cost.
 
 h) Inventories 
 
 The inventory is valued as follows 
 
 
 i) Raw material           :  At cost using FIFO method.
 
 ii) Stores & Spares       :  At cost using FIFO method (excluding 
                              CI moulds, CI Panbodies, tools
                              and tackles, which are valued at 
                              estimated residual value)
 
 iii)Finished Goods        :  At cost or estimated net realisable 
  & Work-in-process           value, whichever is lower.
 
 iv)Traded Goods           :  At cost or estimated net realisable 
                               value, whichever is lower.
 v) Work in process        :  At cost by using absorption costing method.
 
 As per normal practice, Excise duty on finished goods not cleared is
 neither provided for nor considered for valuation of closing stock.
 However, this has no impact on the profits for the year.
 
 I) Revenue Recognition
 
 i) Sales : Sales are recognised at the time of despatch of goods. All
 sales are shown inclusive of excise duty but net of return and amount
 recovered towards sales tax.
 
 ii) Other Income : Income from investments, technical consultancy fee
 and others are accounted for on accrual basis.
 
 J) Prior period Expenses/Income
 
 The company follows the practice of making adjustments through prior
 period Items in respect of all material transaction pertaining to the period prior to current accounting
year.
 
 k) Research & Development
 
 Expenditure in respect of research and development, which are insignificant are charged to profit & loss
account in the year, in
 which they are incurred.
 
 I) Depreciation
 
 Depreciation on Fixed Assets is provided on pro-rata basis using
 straight line method and specified in schedule-XIV of the Companies
 (Amendment) Act, 1988.
 
 i) on Rolling Division of steel plant (Madhwas, Gujarat) on the basis
 of single shift working (Previous period: single shift working).
 
 ii) on Ingots Division of steel plant (Madhwas Gujarat) on the basis
 of triple shift working (previous period triple shift working)
 
 iii) on Ferro Alloys Division at Meghnagar (Madhya Pradesh) on Triple
 Shift Working (Previous period triple shift working)
 
 m) i) Sales Tax deferment loan sanctioned by government of Gujarat
 against eligible investment of rolling mill is repayable between 31st
 May, 1998 to 31st May, 2003.
 
 ii) Sales Tax deferment loan sanctioned by Government of Gujarat
 against Wind Energy Farm is repayable in six annual instalments
 beginning from the next financial year from which the eligible amount
 of Sales Tax deferment is exhausted.
 
 n) Retirement Benefits : As adequate provision for Gratuity Liability
 was provided during earlier years no provision for the same is
 provided during the year.