1. System of Accounting:
 
 The Company follows mercantile system of accounting and recognizes
 income and expenditure on an accrual basis. Financial Statements are
 based on historical cost. These costs are not adjusted to reflect the
 impact of the changing value in purchasing power of money. These
 statements have been prepared to comply in material aspects with
 applicable accounting principles in India, mandatory Accounting
 Standards notified by the Companies (Accounting Standards) Rules, 2006
 and the relevant provisions to the Companies Act, 1956.
 
 2. Revenue Recognition:
 
 Sale of goods is recognized on shipment or dispatch to customer.
 Service Income is considered on accrual basis.
 
 3. Fixed Assets and Depreciation:
 
 Fixed Assets:
 
 Fixed assets are stated at cost of acquisition or construction less
 depreciation. Cost comprises the purchase price and other attributable
 costs, including interest and finance costs incurred till the asset is
 commissioned.
 
 Capital Work-in-progress:
 
 Capital work-in-progress includes the cost of fixed assets that are 
 not ready for their intended use, advances paid to acquire fixed
 assets and the cost of assets not put to use before the balance sheet
 date.
 
 Depreciation:
 
 Depreciation is provided on the written down value method.
 
 Depreciation pertaining to the incremental values of assets revalued is
 adjusted against Revaluation Reserve.
 
 Depreciation is provided at the rates and in manner laid down in
 Schedule XIV to the Companies Act, 1956. Leasehold Lands are amortized.
 
 Items costing Rs. 5,000 or less are fully depreciated in the year of
 acquisition.
 
 From Financial year 2006-07 Cenvat credit is availed on fixed asset
 purchases of Rs.50, 000 and above.
 
 4. Goodwill
 
 Goodwill is written off over a period of five financial years in line
 with AS-14 and AS-26
 
 5. Inventories:
 
 Stocks of raw materials, components, dies and moulds are stated at cost
 and are valued on weighted average cost basis.  Goods in bonded
 warehouse and in transit are valued at costs.
 
 Finished goods are stated at cost or selling prices whichever is lower.
 
 Goods in process are stated at cost based on technical estimates /
 evaluation of the state of completion of individual work order.  Cost
 of goods in process and finished goods include, Material Costs, Labour,
 Factory Overheads and related administrative expenses.
 
 6. Sundry Debtors and Advances:
 
 Specific debts and advances in respect of which certain amounts are
 identified as irrecoverable are written off.
 
 7. Taxation:
 
 Income tax comprises current tax and deferred tax charge or release.
 The deferred tax charge or credit is recognized using current tax
 rates. Deferred tax assets are recognized only to the extent there is
 reasonable certainty of realization in future. Such assets are reviewed
 as at each Balance Sheet date to reassess realization.
 
 8. Foreign Exchange Transactions:
 
 Realised gains and losses on foreign exchange transaction are
 recognised in the Profit and Loss Account.  Assets and liabilities are
 translated at the year end exchange rates.
 
 9.  Research and Development costs:
 
 Research and Development cost of revenue nature is written off in the
 year in which it is incurred and expenditure resulting in development
 of enduring know-how is capitalised.
 
 10. Employee Benefits:
 
 Provident Fund benefit to employees is provided for on accrual basis
 and charged to Profit and Loss Account of the year. Gratuity is
 considered accrued and accounted for as per actuarial valuation done by
 LIC under its Group Gratuity Scheme (subject to Note No).  25 (8) (ii)
 stated above Leave Encashment is considered accrued and accounted for
 based on actuarial valuation report.