1.  Accounting Convention:
 
 The accounts have been prepared in accordance with the historical cost
 convention under accrual basis of accounting as per Indian GAAP.
 Accounts and disclosures thereon comply with the Accounting Standards
 specified in Companies (Accounting Standard) Rules, other
 pronouncements of ICAI, provisions of the Companies Act, 1956 and
 guidelines issued by SEBI as applicable.
 
 Indian GAAP enjoins management to make estimates and assumptions that
 affect reported amount of assets, liabilities, revenue, expenses and
 contingent liabilities pertaining to year, the financial statements
 relate to. Actual result could differ from such estimates.  Any
 revision in accounting estimate is recognized prospectively from
 current year and material revision, including its impact on financial
 statement, is reported in notes to accounts in the year of
 incorporation of revision.
 
 2.  Fixed Assets and Depreciation:
 
 - Fixed assets are stated at carrying amount i.e. subject to deduction
 of accumulated depreciation.
 
 - Cost includes inward freight, duties, taxes and other expenses
 incidental to acquisition and installation.
 
 - Depreciation on Fixed Assets has been provided on straight line
 method at rates specified in Schedule XIV of the Companies Act and as
 per the useful lives of the assets estimated by the management when
 useful life of the assets is deemed less except for part of 5/1 Unit
 Sahibabad, Alwar unit and Narenderpur unit where depreciation has been
 provided for on written down value methods at the rates specified in
 the aforesaid Schedule.
 
 - Patents and trademarks are being amortized over the period of ten
 years on straight line basis.
 
 - Softwares are being amortized over the period of five years on
 straight line basis.
 
 - For New Projects, all direct expenses and direct overheads (excluding
 services provided by employees in companys regular payroll) are
 capitalized.
 
 - Capital Subsidy received against fixed capital outlay is deducted
 from gross value of individual fixed assets, forming part of subsidy
 scheme granted, by way of proportionate allocation of subsidy amount
 thereon. Depreciation is charged on net fixed assets after deduction of
 subsidy amount.
 
 - During sale of fixed assets, any profit earned towards excess of sale
 value over gross block of assets, is transferred from profit &loss
 account to capital reserve.
 
 3.  Impairment /discarding of assets :-
 
 The company identifies impairable fixed assets based on cash generating
 unit concept for tangible fixed assets and asset specific concept for
 intangible fixed assets at the year-end in term of clause 5 to 13 of AS
 -28 and clause 83 of AS- 26 respectively for the purpose of arriving at
 impairment loss thereon, if any, being the difference between the book
 value and recoverable value of relevant assets. Impairment loss, when
 crystallizes, is charged against revenue of the year.
 
 Apart from test of impairment within the meaning of AS 28, individual
 tangible fixed assets of various CGUs are identified for writing down
 on the ground of obsolescence, damage, redundancy & un-usability at the
 year end.
 
 4.  Investments :
 
 Current investments are held at lower of cost and NAV/Market value.
 Long term investments are held at cost less diminution, if any, in
 carrying cost of investments other than temporary in nature.
 
 Loss, if any, sustained by any subsidiary is not recognized.
 
 5.  Deferred Entitlement on LTC :
 
 In terms of the opinion of the Expert Advisory Committee of the ICAI,
 the Company has provided liability accruing on account of deferred
 entitlement towards LTC in the year in which the employees concerned
 render their services.
 
 6.  Inventories:
 
 Stocks are valued at lower of cost or net realizable value. Basis of
 determination of cost remain as follows:
 
 - Raw materials, Packing materials, 
   stores & Spares                     : Weighted Average Basis
 
 - Work-in-process                     : Cost of input plus overhead 
                                         upto the stage of
                                         completion.
 
 - Finished goods                      : Cost of input plus appropriate
                                         Overheads.
 
 7.  Research and Development Expenses:
 
 Contributions towards scientific research expenses are charged to the
 Profit & Loss Account in the year in which the contribution is made.
 
 8.  Retirement Benefits:
 
 Liabilities in respect of retirement benefits to employees are provided
 for as follows :-
 
 A. Defined Benefit Plans :
 
 - Leave Salary of employees on the basis of actuarial valuation as per
 AS 15 (revised).
 
 - Post separation benefits of directors, which is of the nature of long
 term benefit, on the basis of actuarial valuation as per AS 15
 (revised).
 
 - Gratuity Liability on the basis of actuarial valuation as per AS 15
 (revised)
 
 B.  Defined Contribution Plans :
 
 - Liability for superannuation fund on the basis of the premium paid to
 insurance company in respect of employees covered under Superannuation
 Fund Policy.
 
 - Provident fund & ESI on the basis of actual liability accrued and
 paid to trust / authority.
 
 C.  VRS, if paid, is charged to revenue in the year of payment.
 
 9.  Recognition of Income and expenses:
 
 - Sales and purchases are accounted for on the basis of passing of
 title to the goods.
 
 - Sales comprise of sale price of goods including excise duty but
 exclude trade discount and sales tax / VAT.
 
 - All items of incomes and expenses have been accounted for on accrual
 basis except for those income stipulated for recognition on realization
 basis on the ground of uncertainty under AS-9.
 
 10.  Income Tax & Deferred Taxation
 
 The liability of company on account of income tax is estimated
 considering the provisions of the Income Tax Act, 1961. Deferred tax is
 recognized, subject to the consideration of prudence, on timing
 differences being the difference between taxable income and accounting
 income that originate in one year and capable of reversal in one or
 more subsequent years.
 
 11.  Contingent Liabilities:
 
 Disputed liabilities and claims against the company including claims
 raised by fiscal authorities (e.g. Sales Tax , Income Tax, Excise
 etc.), pending in appeal/court for which no reliable estimate can be
 made of the amount of the obligation or which are remotely poised for
 crystallization are not provided for in accounts but disclosed in notes
 to accounts.
 
 However, present obligation as a result of past event with possibility
 of outflow of resources, when reliably estimable, is recognized in
 accounts.
 
 12.  Foreign Currency Translation:
 
 - Transactions in foreign currencies are recognized at rate of overseas
 currency ruling on the date of transactions. Gain / Loss arising on
 account of rise or fall in overseas currencies vis-a-vis reporting
 currency between the date of transaction and that of payment is charged
 to Profit & Loss Account.
 
 - Receivables/payables (excluding for fixed assets) in foreign
 currencies are translated at the exchange rate ruling at the year end
 date and the resultant gain or loss, is accounted for in the Profit &
 Loss Account.
 
 - Increase / decrease in foreign currency loan on account of exchange
 fluctuation are debited / credited to profit and loss account.
 
 - Impact of exchange fluctuation is separately disclosed in notes to
 accounts.
 
 13 Employee Stock Option Purchase (ESOP):
 
 Aggregate of quantum of option granted under the scheme in monetary
 term (net of consideration of issue to be paid in cash) in terms of
 intrinsic value has been shown as Employees Stock Option Scheme
 outstanding in Reserve and Surplus head of the Balance Sheet by way of
 debiting deferred Employee Compensation under ESOP as per guidelines to
 the effect issued by SEBI.
 
 - With the exercise of option and consequent issue of equity share,
 corresponding ESOP outstanding is transferred to share premium account.
 
 - Employees contribution for the nominal value of share in respect to
 option granted to employees of subsidiary company is being reimbursed
 by subsidiary companies to holding company.
 
 14.  Derivative Trading :
 
 The company enters into derivative transaction of the nature of
 currency future or forward contract with the object of hedging against
 adverse currency fluctuation only (not being for trading or
 speculation) in respect of import / export commitment and exposure in
 foreign currency. The contracts are by and large mark to market and
 loss, if any, sustained on open contract is recognized in accounts.
 However gain, if any, in this connection is not recognized as a measure
 of prudence.
 
 15.  Merger / Amalgamation:
 
 Merger / Amalgamation (of the nature of merger) of other company / body
 corporate with the company are accounted for on the basis of purchase
 method, the assets / liabilities being incorporated in terms of values
 of assets and liabilities appearing in the books of transferor entity
 on the date of such merger / amalgamation for the purpose of arriving
 at the figure of goodwill or amalgamation reserve.
 
 16.  Miscellaneous Expenditure:
 
 - Deferred Employees Compensation under ESOP is amortized on straight
 line basis over vesting period.
 
 - Share issue expenses and research fee paid to technical collaborators
 are charged to revenue in the year of its occurrence