i) BASIS OF ACCOUNTING:
 
 The financial statements are prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles in India and the provisions of the Companies Act, 1956,
 except for certain fixed assets, which are revalued.
 
 ii) USE OF ESTIMATES
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of financial statements and the reported amount
 of revenues and expenses during the reporting year. Difference between
 the actual results and estimates are recognized in the period in which
 the results are known/ materialized.
 
 iii) REVENUE RECOGNITION:
 
 Revenue from the sale of goods is recognized on the passing of title to
 the customers, which generally coincides with the dispatch.  Interest
 Income is accrued on time proportion basis over the period of loan/
 deposit/ Investment.
 
 iv) LEASE TRANSACTIONS:
 
 Lease Rentals from assets taken on lease are accounted for in terms of
 the guidance note on accounting for leases issued by The Institute of
 Chartered Accountants of India as the lease agreement were entered in
 to prior to 1st April 2001.
 
 v) FIXED ASSETS:
 
 Fixed Assets are stated at cost net of Modvat / Cenvat / value added
 tax and includes amounts added on revaluation, less accumulated
 depreciation and impairment loss, if any. All costs, including
 financing costs till commencement of commercial production, net charges
 of foreign exchange contracts and adjustments arising from exchange
 rate variations attributable to the fixed assets are capitalized
 
 vi) DEPRECIATION / AMORTISATION:
 
 a) Depreciation on Fixed Assets is provided on ‘Straight Line Method''
 in terms of Section 205(2)(B) of the Companies Act, 1956 on the
 following basis.
 
 i) On Fixed Assets installed upto 30th June 1987 - at the rates
 corresponding to the rates applicable under Income-tax Rules in force
 at the time of acquisition/purchase of the respective assets.
 
 ii) On Fixed Assets installed from 1st July 1987 onwards - at the rates
 specified in Schedule XIV to the Companies Act, 1956 as amended from
 time to time on a prorata basis except revalued assets on which
 depreciation is provided on the remaining useful life of the assets.
 
 b) Depreciation on the amount of additions to fixed assets on account
 of exchange difference is provided over the remaining life of such
 assets.
 
 c) Cost of Leasehold land is amortized over a primary period of lease.
 vii) BORROWING COST:
 
 Borrowing costs that are attributable to acquisition of qualifying
 assets are capitalized as part of the total cost of the Assets.
 
 viii) INVESTMENTS:
 
 Long-term investments are stated at cost / book value unless there is
 diminution other than temporary, in the value of investments, in which
 case, investments are stated at fair values.
 
 ix) VALUATION OF INVENTORIES:
 
 Inventories are valued as follows: :
 
 Stores, Spares, etc.  : At Weighted Average Cost
 
 Raw Materials, Components, etc.  : At Cost on specific identification
 or net realizable value whichever is lower.
 
 Scrap : At Estimated Realizable Value
 
 Work in Progress & Finished Goods/ Finished Jobs : At Estimated Cost or
 Net Realizable Value, whichever is lower
 
 x) FOREIGN CURRENCY TRANSACTIONS:
 
 Transactions arising in foreign currencies are converted at the rates
 closely approximating the rates ruling on the transaction dates.  All
 monetary assets and liabilities at the year / period end are reinstated
 at the closing exchange rates. All exchange rate differences arising
 from conversion in terms of the above are charged to Profit & Loss
 Account.
 
 xi) EMPLOYEE BENEFITS:
 
 (i) Short-term employee benefits are recognized as an expense in the
 profit and loss account of the year in which the related service is
 rendered.
 
 (ii) Post employment and other long-term employee benefits are
 recognized as an expense in the profit and loss account for the year in
 which the employee has rendered services. The expense is recognized at
 the present value of the amount payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long-term benefits are charged to the profit and
 loss account.
 
 xii) PROVISION FOR CURRENT AND DEFERRED TAX:
 
 Provision for current tax is made after taking into consideration
 benefits under the provisions of the Income tax Act, 1961. Deferred tax
 resulting from “timing difference” between book and taxable profit is
 accounted for using the tax rates and laws that are enacted or
 substantively enacted as on the balance sheet date. The deferred tax
 asset is recognized and carried forward only to the extent that there
 is a reasonable certainty that the assets will be realized in future.
 
 xiii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 Notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.
 
 xiv) IMPAIRMENT OF FIXED ASSETS:
 
 If the carrying amount of fixed assets exceeds the recoverable amount
 on the reporting date, the carrying amount is reduced to the
 recoverable amount. The recoverable amount is measured as the higher of
 the net selling price or the value in use determined by the present
 value of estimated future cash flows.
 
 xv) SHARE ISSUE EXPENSES:
 
 Issue expenses are adjusted against the Share Premium.