The financial statements have been prepared as per the convention of
 historical cost accounting on the accrual basis.  Significant accounting policies are as follows.
 
 a) Amalgamation SITEL through Amalgamation with the Company
 
 In exercise of the powers conferred under Section 18(4) of the Sick Industrial Companies Special Provisions
Act, 1985 (SICA), the BIFR has,
 subsequent to the final hearing held on 6.3.95 for the erstwhile SITEL,
 sanctioned a scheme for its amalgamation vide their order dated 10.3.95..
 
 As per the said order, the amalgamation entries have been passed in the
 books of accounts for the period April-94 to June-95.  However, though the amalgamation was effected, the
BIFR Scheme thereto could not take off due to factors and circumstances beyond the control of the Company
 and its management.  In view of the same, BIFR directed IDBI, as the Operating Agency (OA) for SITEL, to
finalise a modified amalgamation
 scheme based on the revised proposals forwarded by the company and consensus to be arrived at by OA with the
Banks, Financial Institutions
 concerned and the Company.  Accordingly, the IDBI submitted the modified scheme to BIFR for its sanction in
April `97.
 
 In view of the original scheme not having been effectively implemented
 and now involving substantial induction of fresh funds, the Directors
 have decided not to amortise the Goodwill in the year under question.
 The same would be taken into account only on pro-rata basis after the
 modified scheme is put into actual operation.
 
 As per the erstwhile scheme of amalgamation, the company has effected
 the first two tranche of conversion of FCDs while the balance 1/3rd tranche FCDs convertible on 1-4-97 is
now repayable in 4 quarterly instalments commencing from 1st January 1988 in view of the guidelines
 of Reserve Bank of India regarding limit of investments by banks and hence included as secured loans. 
Interest to banks and institutions of
 erstwhile SITEL units have been provided as per the sanctioned amalgamation scheme pending approval of the
modified scheme by BIFR.
 Had the interest been provided as per the modified scheme, the charge
 to the profit and loss account would have been higher by Rs.13,200
 
 b] Fixed assets and depreciation
 
 Fixed assets are stated at historic cost or replacement cost as
 specified by a Government approved valuer, less accumulated depreciation.  The company has capitalised
assets acquired under lease
 finance and hire purchase agreements.  Depreciation is provided on
 straight line method for the period of use at the rates specified in
 schedule XIV of the Companies Act, 1956 as amended by the notification
 dtd. 16.12.93 on the assets as on 1.7.1995 as also on subsequent additions.
 
 Extra shift depreciation is provided on plant and machinery (excluding
 electrical installation and air-conditioning plant), based on the
 proportion of extra shift days worked by the concerned department/section to normal working days.
 
 The Company follows the policy of depreciating assets acquired under
 finance leases and hire purchase agreements to the extent that there is
 a reasonable certainty that the company will obtain the ownership of
 such assets at the end of the finance lease/hire purchase term at the
 above rates or over the term of the finance/hire purchase agreement
 whichever is shorter.
 
 In respect of Dombivli & Nasik, depreciation is charged on written down
 value method on the fixed assets acquired prior to 31.12.72 whereas it
 is charged on straight line method basis on the estimated useful life
 of the fixed assets acquired after 1.1.1973 at the rates specified in
 Schedule XIV of the Companies Act, 1956.
 
 c) Inventories
 
 Inventories are priced at the lower of first-in-first-out cost or net
 realisable value.  Inventories for the closed unit is on the basis of
 available information prior to closure..
 
 d) Sales and services
 
 Sales and services represents amounts billed for goods sold and
 services rendered exclusive of excise duty, and net of all discounts,
 returns and allowances.
 
 e) Gratuity
 
 In view of the insurance policies taken from LIC of India for Group
 Gratuity Insurance Scheme for employees being not in force and in
 partly paid up condition due to non-payment of premium, the Company
 hears the liability for the differential amounts in respect of gratuity
 scheme for the period for which the cover was available and also for
 subsequent period as per the scheme till 30th June'96 Rs.11,627 have
 been provided pending payment, as per Company's own valuation on the
 basis of the working by LIC of India till 31.3.1994
 
 f) Product development expenditure
 
 The Company continues to follow the strategy of introducing a large
 number of nets' and substantiality improved products both of its own
 design and based on know-how acquired from technical collaborators.  As
 the Company's research & development efforts have started to mature
 into identifiable products which are both technically and commercially
 viable, the Company has deferred the cost of individual product
 development which are expected to yield substantial benefits in the
 future.  Development costs are amortised from the commencement of the
 commercial production with reference to the expected commercial life of
 the assets and considering the period over which the costs are to be
 recovered.  Research & Development costs which are not separately
 identifiable or where the technical/commercial viability of products
 has not been established are charged to profit and loss account in the
 year in which they are incurred.
 
 (g) Foreign currency transactions
 
 Foreign currency transactions relating to acquisition of fixed assets
 acquired for the overseas offices have been translated at the original
 rate and for all other assets, liabilities, income and expenses,
 wherever applicable, at the rate prevailing at the year end.
 
 The exchange difference on translation is adjusted to the cost of fixed
 assets where the foreign currency liability relates to those fixed
 assets and for other assets, liabilities, income and expenses to the
 profit & loss account.  However, the net exchange gain, if any, on
 translation of assets and other than those relating to overseas office
 is not taken into account while the exchange loss, if any, is charged
 to revenue.
 
 Realised gain or loss on foreign exchange transactions relating to
 current assets and liabilities are recognised in the Profit & Loss
 Account.  All current assets & liabilities are translated at the rate
 of exchange prevailing on 30th June, 96.
 
 (h) Miscellaneous
 
 No adjustments have been made in respect of interest payable/receivable
 for transactions on deferred payment basis for unexpired period, amount
 whereof being indeterminate.
 
 In view of
 
 
 i) the modifications to the BIFR scheme providing no payment of penal
 interest on overdues.
 
 ii) the depressionary trend of interest rates and
 
 iii) the on going discussions and settlement proceedings with the
 Non-Banking Finance Companies (NBFC's) in respect of the lease/hire
 purchase dues and delayed interest thereon and with the expected
 positive outcome of the same, the delayed payment charges in respect of
 overdue lease/hire purchase instalments have been provided @ 18% pa.
 irrespective of the contractual applicable rates.
 
 Export incentives and refund of Excise Duty including on materials
 purchased for export are accounted for on the basis of claims which are
 subject to confirmation, realisation and adjustment of short provision
 for earlier years, if any.