a.  Basis of preparation of financial statements
 
 The financial statements have been prepared to comply in all material
 respects with the mandatory Accounting Standards issued by the
 Institute of Chartered Accountants of India and the relevant provisions
 of the Companies Act, 1956. The financial statements have been prepared
 under the historical cost convention on an accrual basis. The
 accounting policies have been consistently applied by the Company and
 except for the changes in accounting policy discussed more fully below,
 are consistent with those used in the previous year.
 
 b.  Use of Estimates
 
 The preparation of financial statements requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, the disclosure of contingent liabilities on the date
 of the financial statements and the reported amounts of revenues and
 expenses during the period reported. Actual results could differ from
 those estimates. Any revision to accounting estimates is recognised in
 accordance with the requirements of the respective accounting standard.
 
 c.  Fixed Assets
 
 Fixed assets are stated at cost less accumulated depreciation and
 impairment losses. Cost comprises purchase price, duties, levies and
 any other costs relating to the acquisition and installation of the
 assets. Interest and financing charges on borrowed funds, if any, used
 to finance the acquisition of fixed assets, until the date the assets
 are ready for use are capitalized and included in the cost of the
 asset.
 
 d.  Depreciation
 
 Depreciation is provided on Straight Line method at the rates equal to
 the corresponding rates prescribed in Schedule XIV of the Companies
 Act, 1956. Proportionate depreciation is charged for additions /
 deletions during the year on the assets situated in India. For, Assets
 situated outside India, depreciation is calculated on the basis of
 estimated useful life of that asset.
 
                         Schedule XIV Rates (SLM)
 
 Building                    1.63%
 
 Plant & Machinery           4.75%
 
 Computers (included in 
 plant and machinery)       16.21%
 
 Furniture and Fixtures      6.33%
 
 Vehicles                    9.50%
 
 e.  Intangibles
 
 Research and Development Costs: Research costs are expensed as
 incurred. Development expenditure incurred on an individual project is
 capitalised. Intangible assets are amortised over their respective
 useful life on straight line basis.
 
 The carrying value of development costs is reviewed for impairment
 annually when the asset is not yet in use, and otherwise when events or
 changes in circumstances indicate that the carrying value may not be
 recoverable.
 
 f.  Deferred Tax
 
 Deferred Tax Assets & Liabilities are recognized for the estimated
 future tax consequences of temporary differences between the carrying
 value of the assets and liabilities and their respective tax bases.
 Deferred Tax Asset in the nature of unabsorbed depreciation and loses
 are recognized only if there is virtual certainty of realization. The
 effect on deferred tax asset and liabilities of a change in rates is
 recognized in the income statement in the period of enactment of the
 change.
 
 g.  Leases
 
 Finance leases, which effectively transfer to the Company substantially
 all the risks and benefits incidental to ownership of the leased item,
 are capitalized at the lower of the fair value and present value of the
 minimum lease payments at the inception of the lease term and disclosed
 as leased assets. Lease payments are apportioned between the finance
 charges and reduction of the lease liability based on the implicit rate
 of return. Finance charges are charged directly against expenditure
 Lease management fees, legal charges and other initial direct costs are
 capitalised.
 
 Operating Lease : Office premises are obtained on operating lease. The
 lease term varies from 11 months to 36 months and is renewable for
 further period at the option of the Company. Each lease agreement is
 bound by specific escalation clause. There is no restrictions imposed
 by lease agreements. There are no sub-lease.
 
 h.  Investments
 
 Current investments are valued at lower of cost or fair market value.
 Long term investments are stated at. cost less permanent diminution, if
 any, in value.
 
 i.  Inventories
 
 Inventories are valued as follows :
 
 Raw materials, components, stores and spares : Lower of cost and net
 realizable value. Cost is determined on a weighted average basis.
 
 Finished goods: Lower of cost and net realizable value. Cost includes
 direct materials and labour. Cost of finished goods includes excise
 duty.
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and to make the
 sale.
 
 j.  Revenue recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 Sale of Goods : Revenue is recognised when the significant risks and
 rewards of ownership of the goods have passed to the buyer.
 
 Interest: Revenue is recognised on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 Dividends: Revenue is recognised on actual receipt of Dividend.
 
 k.  Foreign currency translation
 
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of the transactions.  Foreign currency assets
 and liabilities are translated into rupees at the exchange rates
 prevailing on the balance sheet date. Exchange differences in
 translation of foreign currency assets and liabilities and realized
 gains and losses on foreign exchange transactions, other than those
 relating to fixed assets, are recognized in the profit and loss
 account.
 
 l.  Retirement benefits
 
 i.  The Companys liability on accrual basis towards retirement benefit
 in the form of Provident fund, gratuity and earned leave encashment are
 provided for and charged to revenue expenditure.
 
 ii.  The Company contributes to the Employee Provident fund maintained
 under the EPF scheme of the Central Government.
 
 iii.  The Gratuity liability is provided and charged off as revenue
 expenditure based on Actuarial valuation.
 
 iv.  Actuarial gains / losses at the time of settlement are immediately
 taken to the profit and loss account and are not deferred.
 
 m.  Statutory Levies & Taxes
 
 The Company follows mercantile system of accounting with respect to
 transactions in the normal course of business.  However, with respect
 to the effect of the outcome of tax assessments, appeals & proceedings,
 the Company records the same on determination or completion & disposal.
 
 Deferred Tax Assets & Liabilities are recognized for the estimated
 future tax consequences of temporary differences between the carrying
 value of the assets & liabilities and their respective tax bases.
 Deferred Tax Asset in the nature of unabsorbed depreciation and loses
 are recognized only if there is virtual certainty of realization. The
 effect on deferred tax asset & liabilities of a change in rates is
 recognized in the income statement in the period of enactment of the
 change.
 
 n.  Segment Reporting Policies
 
 Identification of segments: The Companys operating businesses are
 organized and managed separately according to the nature of products
 and services provided, with each segment representing a strategic
 business unit that offers different products and serves different
 markets. The analysis of geographical segments is based on the areas in
 which major operating divisions of the Company operate.
 
 Intersegment Transfers : The Company generally accounts for
 intersegment sales and transfers as if the sales or transfers were to
 third parties at current market prices.
 
 o.  Earnings Per Share
 
 The basic earning per share is computed by dividing net profit after
 tax by the weighted average number of equity shares outstanding for the
 period. Diluted earnings per share have not been computed, as the
 Company has not issued any Diluted Potential Equity Shares.
 
 p.  Cash flow Statement
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for effects of transactions of non-cash nature
 and any deferrals or accruals of past or future cash receipts or
 payments. The cash flows from regular revenue generating, investing and
 financing activities of the Company are segregated.