1.  Fixed assets and depreciation/amortisation:
 
 (a) Fixed assets are stated at cost of acquisition or construction less
 depreciation/amortisation. Cost comprises the purchase price and other
 attributable costs.
 
 (b) Depreciation/amortization on fixed assets:
 
 i) Depreciation on tangible fixed assets is provided at the rates and
 in the manner laid down in Schedule XIV to the Companies Act, 1956 on
 the written down value (WDV) method in respect of buildings, furniture
 and fixtures and vehicles and on the straight line method (SIM) in
 respect of other assets. However, the rate of depreciation in respect
 of the following assets is higher :-
 
 Jigs & fixtures                       - 33% (SIM)
 
 Furniture & fixtures                  - 37% (WDV)
 
 Office equipments                     - 10% (SLM)
 
 Electrical installations              - 10% (SLM)
 
 Vehicles                              - 60% (WDV)
 
 Leasehold land and assets taken on lease are amortised over the period
 of the lease.
 
 ii) Intangible assets are amortised on the straight line method at the
 following rates:
 
 Rights, techniques,
 Process and Know-how         14.29 %, 20 % 
 
 Software                     33%
 
 2.  Investments:
 
 Long-term Investments are valued at cost of acquisition and related
 expenses. Provision is made for other than temporary diminution, if
 any, in the value of such investments.
 
 3.  Inventories:
 
 Inventories are stated at the lower of cost and net realisable value.
 In determining the cost of raw materials, components, stores, spares
 and loose tools the weighted average method is used.
 
 Costs of work-in-progress and manufactured finished products include
 material costs, labour and factory overheads on the basis of full
 absorption costing.
 
 4.  Sundry debtors and advances:
 
 Specific debts and advances identified as irrecoverable or doubtful are
 written-off or provided for, respectively.
 
 5.  Foreign exchange transactions :
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the date of the transaction.  Realised gains and losses
 as also exchange differences arising on translation at year end
 exchange rates of current assets and current liabilities outstanding at
 the end of the year are recognised in the Profit and Loss account.
 Premium/Discount in respect of Forward Contracts is accounted for over
 the period of contract.
 
 6.  Revenue Recognition :
 
 (i) Sales of goods is recognised on shipment or despatch to customers.
 
 (ii) Dividend income from investments is recognised when the owner''s
 right to receive the payment is established. Dividend from the
 subsidiary company declared after the year end is, as per the law,
 accounted during the year.
 
 (iii) Income from services rendered is accounted for when the work is
 performed.
 
 7.  Employee Benefits:
 
 Employee benefits include gratuity, superannuation and provident fund
 and leave encashment benefits under the approved schemes of the
 Company.
 
 In respect of defined contribution plans, the contribution payable for
 the year is charged to the Profit and Loss Account.
 
 In respect of defined benefit plans and other long term employee
 benefits, the employee benefit costs is accounted for based on an
 actuarial valuation as at the Balance Sheet date.
 
 8.  Product Warranty :
 
 Cost of product warranties is disclosed under the head
 
 (i) ''raw materials and components consumed'' as consists of free
 replacement of spares.
 
 (ii) ''general charges'' which includes provision for warranties.
 
 9.  Taxes on Income :
 
 Tax expense for the year is included in the determination of the net
 profit for the year.
 
 Deferred tax is recognised on all timing differences, subject to
 consideration of prudence in respect of deferred tax assets.
 
 10.  Leases :
 
 Assets acquired under finance leases are recognised at the lower of the
 fair value of the leased assets at inception of the lease and the
 present value of minimum lease payments. Lease payments are apportioned
 between the finance charge and the reduction of the outstanding
 liability. The finance charge is allocated to periods during the lease
 term at a constant periodic rate of interest on the remaining balance
 of the liability.
 
 11.  Borrowing Costs :
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of a qualifying asset are capitalised as
 part of the cost of that asset.  Other borrowing costs are recognised
 as an expense in the year in which they are incurred.
 
 12.  Cash Flow Statement:
 
 The Cash Flow statement is prepared by the indirect method set out in
 Accounting Standard (AS) - 3 on Cash Flow Statements and presents cash
 flows by operating, investing and financing activities of the Company
 
 13.  Use of Estimates:
 
 The preparation of the financial statements in conformity with the
 generally accepted accounting principles requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting year.  Difference
 between the actual result and estimates are recognized in the year in
 which the results are known/ materialized.
 
 14.  Provisions, Contingent liabilities and Contingent Assets:
 
 As per Accounting Standard 29, Provisions, Contingent liabilities and
 Contingent Assets, the Company recognizes provisions only when it has a
 present obligation as a result of a past event, it is probable that an
 outflow of resources embodying economic benefits will be required to
 settle the obligation and when a reliable estimate of the amount of the
 obligation can be made.
 
 No provision is recognised for:
 
 (i) Any possible obligation that arises from past events and the
 existence of which will be confirmed only by the occurrence or
 non-occurrence of one or more uncertain future events not wholly within
 the control of the Company: or
 
 (ii) Any present obligation that arises from past events but is not
 recognized because- 
 
 - It is not probable that an outflow of resources embodying economic
 benefits will be required to settle the obligation: or
 
 - A reliable estimate of the amount of obligation cannot be made.
 
 Such obligations are recorded as Contingent Liabilities.  These are
 assessed continually and only that part of the obligation for which an
 outflow of resources embodying economic benefits is probable, is
 provided for, except in the extremely rare circumstances where no
 reliable estimate can be made.
 
 Contingent Assets are not recognized in the financial statements since
 this may result in the recognition of income that may never be
 realized.
 
 15.  Earnings per share
 
 The company reports basic and diluted earnings per share in accordance
 with Accounting Standard - 20 on Earnings per Share.
 
 Basic earnings per share is computed by dividing the net profit or loss
 for the year by the weighted average number of Equity shares
 outstanding during the year.  Diluted earnings per share is computed by
 dividing the net profit or loss for the year by the weighted average
 number of equity shares outstanding during the year as adjusted for the
 effects of all diluted potential equity shares except where the results
 are anti-dilutive.