(a) Accounting basis and convention:
 
 The financial statements are prepared under historical cost convention
 in accordance with Generally Accepted Accounting Principle in India and
 comply in all material respects with the applicable accounting
 standards notified under section 211(3C) of the Companies Act, 1956 and
 the relevant provisions of the Companies Act,1956.
 
 (b) Revenue Recognition:
 
 Sale of goods is recognised on despatch of goods to customers and is
 recorded net of trade discounts, claims, etc., as considered
 appropriate.
 
 Interest on investments and deposits is recognised on a time proportion
 basis. Dividend income is accounted for when it is declared.
 
 Income from services is recognised on rendering of services based on
 agreements/ arrangements with the concerned parties.
 
 (c) Fixed assets:
 
 Fixed assets are stated at cost of acquisition or construction less
 accumulated depreciation.
 
 (d) Investments:
 
 Current Investments are stated at lower of cost and fair value. Long
 term Investments are stated at cost. A provision for diminution, if
 any, is made to recognise a decline, other than temporary, in the value
 of long term investments. Premium paid on acquisition of government
 bonds is amortised over the residual period of such bonds.
 
 (e) Depreciation:
 
 (i) Depreciation on fixed assets is provided using the written down
 value method based on the useful life as estimated by the management.
 The estimated useful life for various fixed assets is given below :
 
 (ii) In respect of assets which are not directly connected with the
 production activity such as Research and Development assets, pollution
 control and energy saving devices and low value assets not exceeding?
 15,000/- per unit, depreciation is provided at 100% in the quarter of
 addition.  .
 
 (iii) Cost of application software is expensed off on purchase.
 
 (iv) In respect of additions, depreciation is provided on pro-rata
 basis from the quarter of addition and in respect of disposals, the
 same is provided upto the quarter prior to disposal.
 
 (v) The aggregate depreciation so provided in the accounts is not less
 than the depreciation which would have been provided had the rates
 specified in Schedule XIV of the Companies Act, 1956, been adopted.
 
 (vi) Cost of leasehold land is amortized over the lease term.
 
 (f) Inventories.-
 
 Inventories are valued at lower of cost and net realisable value. Cost
 is generally ascertained on weighted average basis. In case of
 work-in-progress and finished goods, appropriate overheads are
 included. Obsolete / slow moving inventories are adequately provided
 for. Excise duty on finished goods lying in factories and customs duty
 on raw materials in bonded warehouses are considered for valuation of
 inventories, as applicable. Purchased goods in transit are accounted at
 cost.
 
 (g) Employee Benefits:
 
 (i) Short term employee benefits:
 
 All employee benefits falling due wholly within twelve months of
 rendering the services are classified as short term employee benefits,
 which include benefits like salaries, wages, short term compensated
 absences and performance incentives and are recognised as expenses in
 the period in which the employee renders the related service.  
 
 (ii) Post-employment benefits:
 
 Contributions towards Superannuation Fund, Pension Fund and government
 administered Provident Fund are treated as defined contribution
 schemes. Such contributions are recognised as expenses in the period in
 which the employee renders related service. In respect of certain
 employees, Provident Fund contributions are made to Trusts administered
 by the Company, which is in nature of defined benefit plan. The
 interest rate payable to the members of these Trusts shall not be lower
 than the statutory rate of interest declared by the Central Government
 under the Employees'' Provident Funds and Miscellaneous Provisions Act,
 1952 and shortfall, if any, shall be made good by the Company. In
 respect of contributions made to government administered Provident
 Fund, the Company has no further obligations beyond its monthly
 contributions. The Company also provides for post employment defined
 benefit in the form of gratuity. The cost of providing benefit is
 determined using the projected unit credit method, with actuarial
 valuation being carried out at each balance sheet date. Actuarial gains
 and losses in respect of the same are charged to the Profit and Loss
 Account.  
 
 (iii) Other Long Term Employee Benefits:
 
 All employee benefits (other than post-employment benefits and
 termination benefits) which do not fall due wholly within twelve months
 after the end of the period in which the employees render the related
 service, mainly including long term compensated absences, service
 awards, death relief benefits are determined based on actuarial
 valuation carried out at each balance sheet date. Estimated liability
 on account of long term benefits and defined benefit plans is
 discounted to the present value, using the yield on government bonds as
 the discounting rate, as on the date of the balance sheet. Actuarial
 gains and losses in respect of the same are charged to the Profit and
 Loss Account.  
 
 (h) Foreign currency transactions:
 
 Foreign currency transactions are recorded at the rate of exchange
 prevailing on the date of the transactions. At the year end, all the
 monetary assets and liabilities denominated in foreign currency are
 restated at the closing exchange rates. Exchange differences resulting
 from the settlement of such transactions and from the translation of
 such monetary assets and liabilities are recognised in the Profit and
 Loss Account.
 
 Forward exchange contracts outstanding as at the year end on account of
 firm commitment/ highly probable forecast transactions are marked to
 market and the resultant loss, if any, is recognised in the Profit and
 Loss Account.  (I) Leases:
 
 Assets acquired under finance leases are capitalised at the lower of
 the fair value of the leased assets at the inception of the lease term
 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 bafance of the liability.  Operating lease expense/ income is
 recognised in the Profit and Loss Account on a straight line basis over
 the lease term.  (j) Income Tax:
 
 (i) Current Taxation:
 
 Provision is made for income tax annually based on the tax liability
 computed after considering tax allowances and exemptions.
 
 (ii) Deferred Taxation:
 
 Deferred income tax is provided, on all timing differences at the
 balance sheet date between the tax bases of assets and liabilities and
 their carrying amounts for financial reporting purposes. The carrying
 amount of deferred tax assets is reviewed at each balance sheet date
 and reduced to the extent that it is no longer probable that sufficient
 taxable profit will be available to allow all or part of the deferred
 tax asset to be utilised. Deferred tax assets and liabilities are
 measured at the tax rates that have been enacted or substantively
 enacted as on the balance sheet date.
 
 (k) Impairment of Assets:
 
 At each balance sheet date, the Company assesses whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount. If the carrying
 amount of the asset exceeds its recoverable amount an impairment loss
 is recognised in the Profit and Loss Account to the extent the carrying
 amount exceeds recoverable amount.
 
 (I) Provisions:
 
 Provisions are recognised when the Company has a present obligation as
 a result of past events, for which it is probable that an outflow of
 resources embodying economic benefits will be required to settle the
 obligation and a reliable estimate of the amount can be made.
 
 (m) Research and Development:
 
 Capital expenditure on Research & Development is capitalized as fixed
 assets and depreciated in accordance with depreciation policy of the
 Company. Revenue expenditure incurred in research phase is expensed as
 incurred. Development expenditure is capitalized as an internally
 generated intangible asset only if it meets the recognition criteria
 under Accounting Standard 26 on Intangible Assets, which inter-alia
 includes demonstration of technical feasibility, generation of future
 economic benefits etc. Expenditure that cannot be distinguished between
 research phase and development phase is expensed as incurred.