A. Significant Accounting Policies
 
 Fixed Assets
 
 Fixed Assets are stated at cost of acquisition or construction and
 include amounts added on revaluation less accumulated depreciation.
 
 Expenditure during Construction Period
 
 Expenditure during Construction Period including pre-operative
 expenses, all direct and indirect expenses, interest and finance costs
 and trial run expenses (net of trial run sales and trial run closing
 stock) are capitalised.
 
 Depreciation
 
 Depreciation on fixed assets is provided on the. Straight Line
 method/Written Down Value method in accordance with the Companies Act,
 1956. No depreciation has been provided in the year of sale/retirement
 of assets (Refer Note No. 4).
 
 The difference between depreciation provided for the year on revalued
 cost of assets and that calculated on original cost of assets is
 withdrawn from Revaluation Reserve and credited to Profit and Loss
 Account,
 
 Investments
 
 Current Investments are carried at lower of cost and fair value. Long
 term Investments are carried at cost.  Cost of certain Investments
 includes interest. Provision is made to recognise declines, other than
 temporary, in the carrying amount of long term Investments.
 
 Inventories
 
 a) Stores and Spare Parts (including Construction Materials)
 
 At cost on FIFO basis.
 
 b) Raw Materials
 
 At cost.
 
 c) Work-in-Process and Finished Goods
 
 Work-in-Process at cost, Finished Goods at cost or market value,
 whichever is lower. Cost is determined on the basis of absorption
 costing method.
 
 Market value is based on available market price/quotation. 
 
 d) Trading Goods
 
 At cost or market value, whichever is lower.
 
 Market value is based on available market price/quotation.
 
 Retirement Benefits
 
 a) Gratuity
 
 The Company has taken a Group Gratuity cum Life Assurance Policy from
 the Life Insurance Corporation of India. Provision for Gratuity is made
 on the basis of contribution payable in respect of the aforesaid
 policy.
 
 b) Superannuation
 
 The Company has taken a Group Superannuation Policy from the Life
 Insurance Corporation of India.  Provision for Superannuation is made
 on the basis of contribution payable in respect of the aforesaid
 policy.
 
 c) Provident Fund
 
 Liability is determined on the basis of contribution as required under
 the Statute/Rules.
 
 Modvat Credit
 
 Modvat Credit is accounted on accrual basis on purchase of materials.
 
 Foreign Currency Transactions
 
 Transactions in Foreign Currency are recorded at the original rates of
 exchange in force at the time the transactions are effected. At the
 year end, monetary items denominated in Foreign Currency are reported
 using the closing rate of exchange. Exchange differences arising on
 realisation/payment of foreign exchange are accounted in the year of
 realisation/payment.
 
 The value of Fixed Assets acquired through foreign currency loans are
 adjusted at the end of each financial year by any change in liability
 arising out of expressing the outstanding foreign currency loans at the
 closing rates of exchange prevailing at the date of the Balance Sheet.
 Where forward contracts are entered into, the transactions are recorded
 at the forward contract rates.
 
 Research and Development
 
 Research and Development expenses are charged to revenue in the year in
 which they are incurred.
 
 Capital expenditure on Research and Development is treated as addition
 to fixed assets.
 
 Premium on Redemption of Debentures
 
 The premium payable on redemption of Debentures is accounted when paid.
 
 Deferred Revenue Expenditure
 
 Expenses under Voluntary Retirement Scheme are deferred and written-off
 equally over a period of 5 years,
 
 Revenue Recognition
 
 In appropriate circumstances, revenue (income) is recognised when no
 significant uncertainty as to determination or realisation exists.
 
 Contingent Liabilities
 
 These, if any, are disclosed in the Notes on Accounts. Provision is
 made in the accounts in respect of those contingencies which are likely
 to materialise into liabilities after the year end till the approval of
 the accounts by the Board of Directors and which have material effect
 on the position stated in the Balance Sheet.
 
 Inter-Divisional Transfers
 
 Inter-Divisional Transfers and Services rendered which are meant for
 further processing and internal consumption are charged at current
 prices and reflected as contra items in the Profit and Loss Account.
 
 Provision for Bad and Doubtful Debts/Advances
 
 Provision is made in the accounts for Bad and Doubtful Debts/Advances
 which in the opinion of the management are considered irrecoverable.
 
 Deferred Tax
 
 Deferred Tax is accounted for by computing the tax effect of timing
 differences and reverse in subsequent periods.