1.  General
 
 Financial statements are prepared under historical cost convention and
 in accordance with generally accepted accounting practices.
 
 2.  Fixed assets
 
 Fixed assets are stated at cost net of CENVAT and VAT credit less
 accumulated depreciation. Cost of acquisition of fixed assets is
 inclusive of freight, duties and taxes, interest, if any, on specific
 borrowings utilised for financing the assets upto the date of
 commissioning, the cost of installation/erection, and other incidental
 expenses.
 
 3.  Intangible assets
 
 Intangible assets are stated at cost of acquisition less accumulated
 amortisation. Intangible assets, which are in the nature of computer
 software are amortised over a period of 4 years on straight line
 method.
 
 4.  Depreciation
 
 Depreciation is provided on straight line basis in accordance with the
 rates and rules prescribed under Schedule - XIV to the Companies Act,
 1956, except in respect of the following, where the depreciation is
 provided based on their estimated useful life
 
 Computers - 4 Years ;  Office Equipment - 8 Years;   Moulds - 3 Years
 
 5.  Investments
 
 Long-term investments are stated at cost less provision required, if
 any, for the permanent diminution in value thereof. Dividends thereon
 are accounted as and when received.
 
 6.  Inventories
 
 a.  Finished goods are valued at lower of cost or market value.
 
 b.  Raw Materials, Work in Process, Stores and Spares, Materials in
 transit etc., are valued at cost.
 
 c.  Scrap is valued at an estimated net realisable value.
 
 7.  Sales
 
 Gross Sales are inclusive of Excise Duty, Sales tax/VAT, Service tax,
 Insurance, Octroi, Service charges etc., recovered thereon and net of
 trade discounts / trade incentives.
 
 8.  Employee Benefits
 
 I) Defined Contribution Plans
 
 a) Company''s contribution to Employees Provident Fund and Employees
 State Insurance are made under a defined contribution plan, and are
 accounted for at actual cost in the year of accrual.
 
 b) Company''s contribution to Superannuation Fund in respect of
 employees who are members are made under a defined contribution plan,
 being administrated by the Life Insurance Corporation of India Limited,
 and are charged to Profit and Loss Account at predetermined rates in
 the year in which the employees have rendered service.
 
 II) Defined Benefit Plans
 
 a) Company''s liability to Gratuity on retirement of its eligible
 employees is funded and is being administrated by the Life Insurance
 Corporation of India Limited. The incremental expense thereon for each
 year is arrived at as per actuarial valuation and is recognised and
 charged to Profit and Loss Account in the year in which the employee
 has rendered service.
 
 b) Expenses on account of unutilised leave which is unfunded is arrived
 at as per actuarial valuation and is recognised and charged to Profit
 and Loss Account in the year in which the employee has rendered service
 in lieu of such leave.
 
 c) Gains / Losses arrived at in the above actuarial valuations are
 charged to Profit and Loss Account.
 
 9.  Research and Development Expenses 
 Research and Development costs of revenue nature are charged 
 to revenue as and when incurred, and of capital nature is 
 capitalised and depreciation thereon is provided as per the rates 
 prescribed in schedule XIV to the Companies Act, 1956.
 
 10. Foreign Currency Transactions
 
 a) Transactions in foreign currency are initially accounted at the
 exchange rate prevailing on the date of transaction, and charged to
 revenue with the difference in the rate of exchange arising on actual
 receipt/payment during the year.
 
 b) At each Balance Sheet date
 
 - Foreign currency monetary items are reported using the rate of
 exchange on that date.
 
 - Foreign currency non-monetary items are reported using the exchange
 rate at which they were initially recognised.
 
 c) In respect of forward exchange contracts in the nature of hedges
 
 - Premium or discount on the contract is amortised over the term of the
 contract.
 
 - Exchange differences on the contract are recognised as profit or loss
 in the period in which they arise.
 
 11. Warranty Claims and Provisions 
 The company makes provision for the probable future liability on 
 account of warranty as at the end of the financial year, in addition 
 to meeting the actual warranty claimed.
 
 12. Late Delivery Charges 
 The liability on account of late delivery charges, due to delay in 
 delivery of finished products is accounted for on accrual basis as 
 per the terms of the contracts after adjusting for the claims 
 which are no longer required.
 
 13. Taxation 
 Provision is made for Income-tax liability estimated to arise on the 
 results for the year at the current rate of tax in accordance with 
 the Income tax Act, 1961.
 
 - Deferred tax resulting from timing differences between book and tax
 profits is accounted for under the liability method, at the rate of tax
 enacted or substantively enacted by the balance sheet date.
 
 - Deferred tax assets arising on account of brought forward losses and
 unabsorbed depreciation are recognised only when there is virtual
 certainty supported by convincing evidence that such assets will be
 realised. Deferred tax assets arising on other temporary timing
 differences are recognised only if there is a reasonable certainty of
 realisation.
 
 14. Dividends 
 Provision is made in the accounts for the dividends payable by the 
 Company, as recommended by the Board of Directors, pending approval 
 of the shareholders at the Annual General Meeting. Income Tax on 
 dividends payable is provided for in the year to which such 
 dividends relate.
 
 15. Impairment of Assets 
 At the date of each Balance Sheet, the company evaluates 
 indications of the impairment internally, if any, to the carrying 
 amount of its fixed and other assets. If any indication does exist, 
 the recoverable amount is estimated at the higher of the realisable 
 value and value in use, as considered appropriate. If the estimated 
 realisable value is less than the carrying amount, an impairment 
 loss is recognised.
 
 Reversal of impairment losses recognised in prior years is recorded
 when there is an indication that the impairment losses recognised for
 the asset no longer exist or have decreased. However, the increase in
 carrying amount of an asset due to reversal of an impairment loss is
 recognised to the extent it does not exceed the carrying amount that
 would have been determined (net of depreciation) had no impairment loss
 been recognised for the asset in prior years.
 
 16. Contingent Liabilities 
 Contingent liabilities are not recognised in the accounts, but are 
 disclosed after a careful evaluation of the concerned facts and 
 legal issues involved.
 
 17. Borrowing Costs 
 Borrowing costs directly attributable for acquisition of qualifying 
 assets are capitalised as part of the asset. Other borrowing costs 
 are charged to revenue as and when incurred.
 
 18. Commodity Hedging 
 The realised gain or loss in respect of commodity hedging contracts, 
 the price period of which has expired during the year, is recognised 
 in the Profit & Loss account. In respect of contracts, which are 
 outstanding as on date of Balance Sheet are valued at prevailing 
 market price and the resultant loss, if any, is provided.