I. Significant accounting policies of the Company are :
 
 (a) Sales :
 
 Sales are net of discounts allowed and are accounted for on despatch of
 products. Sales include excise duty.
 
 (b) Accounting of Claims and subsidies :
 
 (i) Insurance Claims receivable are accounted for on the basis of
 Surveyors Report depending on the merits of the case. Claims payable
 are accounted for at the time of acceptance.
 
 (ii) Claims raised by Government Authorities regarding taxes and duties
 which are disputed by the Company are accounted based on the legality
 of each claim. Adjustment, if any, are made in the year in which
 disputes are finally settled.
 
 (c) Retirement Benefits : Retirement benefits to employees are provided
 as follows:
 
 (i) Gratuity ; Gratuity payable to employees is provided for by payment
 to Gratuity Trust Fund on the basis of amount determined by Life
 Insurance Corporation of India under Group Gratuity Scheme.
 
 (ii) Superannuation : Superannuation payable to certain employees is
 provided by payment to Superannuation Trust Fund as per Superannuation
 Scheme.
 
 (iii) Companys Contributions Paid/Payable to Provident Fund is
 charged to Profit & Loss Account.
 
 (iv) The Company extends the benefits of encashment of leave to its
 employees while in service as well as on retirement. However it does
 not have any defined Retirement Benefit Scheme in this behalf. Though
 encashment is at the discretion of the management for the leave
 accumulated while in services, as well as on retirement, it is provided
 for during the year.
 
 (d) Fixed Assets:
 
 (i) Fixed Assets including assets purchased on Hire Purchase basis and
 are stated at cost of acquisition except Land & Buildings which were
 revalued in the year 1982 on the basis of market value and stated at
 revalued cost.
 
 (ii) Depreciation has been calculated on the assets of the Company on
 straight line basis at the rates specified in schedule XIV of the
 Companies Act, 1956, as revised from time to time.
 
 (iii) An amount representing difference between depreciation on
 revalued assets and original cost of assets is transferred from
 Revaluation Reserve to Profit & Loss Account.
 
 (iv) Payments for acquisition of know-how is capitalised to the
 relevant asset account and depreciation is provided as and when it is
 put to use.
 
 (e) Investments:
 
 Investments are stated at cost and income thereon is accounted for on
 accural basis.
 
 (f) Research & Development:
 
 R&D expenditure of revenue nature is charged to Profit & Loss Accont.
 Capital expenditure is capitalised in the year in which it is incurred
 and depreciation is provided on such assets as applicable.
 
 (g) Inventories:
 
 Raw Materials and components are stated at weighted average cost.
 Work-in-progress is valued at cost and Finished Goods are valued at
 lower of cost or market value.
 
 Pattern Tools are valued at cost net of amortisation.
 
 (h) Deferred Revenue Expenditure : Compensation, Gratuity, Leave
 Encashment for the employees retired under the Voluntary Retirement
 Scheme is treated as deffered revenue expenditure to be amortised over
 a period of five year commecing with the year of payment.
 
 (i) Contingent Liabilities:
 
 Contingent Liabilities are disclosed after careful evaluation of the
 facts and legal aspects of the matter involved.