(A) Sales
 
 (i) Sales are accounted on dispatch of goods. Net Sales exclude amounts
 recovered towards sales tax, octroi, freight and is net of discounts.
 
 (ii) Erection and commissioning income is recognised as revenue,
 generally to the extent of comletion of erection work as assessed or as
 and when it becomes due as per terms of contracts.
 
 (iii) Repairs and Service Income is recognised as revenue after the
 service is rendered.
 
 (B) Accounting of Claims and Subsidies
 
 i) Claims receivable are accounted at the time of lodgement, depending
 on the certainty of receipt and claims payable are accounted at the
 time of acceptance.
 
 (ii) Excise duty / Duty Drawback refund claims are accounted as and
 when accrued.
 
 (iii) Investment subsidy not specifically related to the fixed assets
 is credited to Caoital Reserve and retained till the requisite
 conditions are fulfilled.  
 
 (C) Fixed Assets, Depreciation and Impairment Loss
 
 (i) Fixed Assets are stated at cost of acquisition (net of cenvat
 wherever applicable and expenditure incurred including interest on
 borrowing and financial cost) / construction except certain land and
 building which were revalued at market value and stated at revalued
 cost.
 
 (ii) Depreciation is provided :
 
 a) In respect of assets acquired upto June, 1986 on straight-line
 method in accordance with Circular No.1/86 issued by the Department of
 Company Affairs.
 
 b) In respect of assets acquired after 1- July, 1986 on straight-line
 method at the rates specified in Schedule XIV of the Companies Act,
 1956.
 
 (iii) Intangible Fixed Assets : Over their estimated economic life in
 accordance with Accounting Standard on 'Intangible Assets' (AS-26)
 accordance with
 
 iv) An amount representing the difference between depreciation on
 revalued Assets and on original cost of assets is transferred from
 Revaluation Reserve to Profit and Loss Accounts.
 
 (v) Cost of Lease-hold land is not amortised.
 
 (vi) In case the recoverable amount of the fixed assets is lower than
 its carrying amount a provision is made for the impairment loss. 
 
 (D) Investments
 
 Long term investments are stated at cost with an appropriate provision
 for permanent diminution in value.
 
 (E) Inventories
 
 All Inventories are valued at lower of cost and net realizable value
 
 Raw materials and components are valued at lower of cost determined on
 weighted average basis and net realization value.
 
 Work in process is valued at lower of cost and net realizable value.
 
 Finished Goods is valued at lower of cost including excise payable
 thereon and net realizable value.
 
 (F) Deferred Revenue Expenditure
 
 Debenture / Share Issue Expenses
 
 Debenture issue expenses and Share issue expenses are charged out in
 the year in which they are incurred.
 
 (G) Retirement Benefits : Retirement benefits to employees are provided
 as follows:
 
 (i) Gratuity : Gratuity payable to employees is provided on the basis
 of actuarial valuations.
 
 (ii) Superannuation : Superannuation payable to certain employees is
 provided / paid to Superannuation Trust Fund as per Superannuation
 Scheme.
 
 (iii) Company's contributions payable to Provident Fund and Family
 Pension Fund are charged to Profit and Loss account.
 
 (iv) The Company extends the benefit 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 regard. Though
 encashment is at the discretion of the management for the leave
 accumulated while in service as well as on retirement it is provided
 for during the year on the basis of actuarial valuations.  
 
 (H) R&D Expenses
 
 All revenue expenses related to R & D including expenses in relation to
 development of product / processes are charged to the Profit & Loss
 Account in the year in which it is incurred.
 
 (I) Foreign Currency Transactions
 
 (i) Monetary assets and liabilities related to foreign currency
 transactions remaining unsettled at the end of the year are translated
 at year end exchange rates.
 
 (ii) The difference in translation of monetary assets and liabilities
 and realized gains and losses on foreign exchange transaction are
 recognized in the Profit & Loss Account.  
 
 (J) Deferred Tax
 
 Deferred Tax Assets and Liabilities are recognised in accordance with
 Accounting Standard (AS) - 22 on Accounting for Taxes on Income, issued
 by The Institute of Chartered Accountants of India.
 
 (K) Provisions, Contingent Liabilities and Contingent Assets
 
 (a) Provisions are recognized when the Company has present legal or
 constructive obligation, as a result of past events, for which it is
 probable that an outflow of economic benefits will be required to
 settle the obligation and a reliable estimate can be made for the
 amount of the obligation.
 
 (b) Contingent Liabilities are disclosed after careful evaluation by
 the Management of facts and legal aspects of the matter involved.
 
 (c) Contingent Assets are neither recognized nor disclosed in the
 financial statement.