A. ACCOUNTING CONVENTION :
 
 The financial statements are prepared under historical cost convention
 on the accrual basis of accounting in accordance with generally
 accepted accounting principles in India and the Accounting Standards
 issued under the relevant provisions of the Companies Act, 1956.
 
 B.. FIXED ASSETS AND DEPRECIATION :
 
 i. Fixed assets are stated at cost of acquisition including freight,
 duties and installation expenses and expenditure during construction
 where applicable and net of CENVAT and Value Added Tax credit availed
 against Tax or cess paid on such items.
 
 ii. Depreciation on Fixed Assets is provided under Straight Line Method
 at the rates and in the manner specified in Schedule XIV of the
 Companies Act, 1956.
 
 iii. Depreciation is provided at one hundred per cent for assets
 costing less than Rs.5,000/-
 
 iv. Depreciation on Fixed Assets used for the Project under
 construction is included under Unallocated Expenditure Pending
 Capitalisation.
 
 V. Revenue Expenditure incurred during the construction period of the
 Project is shown under Unallocated Expenditure Pending Capitalisation
 till the commencement of the commercial production or their intended
 use and the same is being capitalised by allocating to relevant assets
 in the ratio of their direct costs.
 
 C.  IMPAIRMENT OF ASSETS :
 
 The carrying amount of the assets are being tested on annual basis for
 impairment so as to determine the provision required for impairment
 loss if any or for reversal of the provision, if any, required on
 account of impairment loss recognised in previous periods.
 
 D.  INVESTMENTS :
 
 i.  Investments are classified into Current and Long Term investments.
 
 ii.  Current investments are valued at lower of cost and fair value.
 
 iii. Long-term investments are valued at cost of acquisition. Provision
 is made for decline, other than temporary, in the value of investments.
 
 E.  INVENTORIES :
 
 Inventories are valued at lower of cost and net realisable value. The
 Cost of inventories is being determined under weighted average cost
 method
 
 F.  RESEARCH AND DEVELOPMENT :
 
 Revenue Expenditure incurred for Research and Development is written
 off in the same year. Capital expenditure on Research and Development
 is shown as additions to Fixed Assets.
 
 G.  EXCISE DUTY :
 
 Excise Duties recovered are included in Gross Sales. Excise duty on
 despatches is shown as an item of expense and deducted from Gross
 Sales. The value of closing stock of finished goods includes excise
 duty paid / payable on such stocks wherever applicable.
 
 H. EMPLOYEE STOCK OPTION SCHEME :
 
 In accordance with the Securities and Exchange Board of India
 guidelines, the excess of the market price of the shares, at the date
 of grant of option under the employee stock option scheme, over the
 exercise price is treated as employee compensation and the same is
 amortised over the vesting period of the stock options.
 
 I.  FOREIGN EXCHANGE TRANSACTIONS :
 
 i. Transactions in Foreign Exchange, other than those covered by
 forward contracts are accounted for at the exchange rate prevailing on
 the date of transactions. Exchange differences arising on foreign
 currency transactions settled during the year are recognised in the
 Profit and Loss Account.
 
 ii. Monetary assets and liabilities denominated in foreign currencies
 as at the balance sheet date other than those covered by forward
 contracts are translated at the year end rates. The resultant exchange
 differences are recognised in the profit and loss account.
 
 iii. Non-monetary assets and liabilities are recorded at the rates
 prevailing on the date of the transaction.
 
 iv. Forward contracts are being entered into to mitigate the foreign
 currency risk of the underlying outstanding at the balance sheet date
 and also to hedge the foreign currency risk of firm commitments or
 highly probable forecast transactions.
 
 In case of forward contracts not intended for trading or speculative
 purposes, the premium or discount on all such contracts is amortised as
 income or expense over the life of the contract. Any profit or loss
 arising on cancellation or renewal of forward contracts is recognised
 as income or expense for the period. The exchange differences,
 consisting of the difference between (a) the foreign currency amount of
 the contract translated at the exchange rate at the reporting date or
 the settlement date where the transaction is settled during the
 reporting period and (b) the same foreign currency amount translated at
 the latter of the date of inception of the forward exchange contract
 and the last reporting date, are recognised in the profit and loss
 account in the reporting period in which the exchange rates change.
 
 In case of other forward contracts, the gain or loss, computed
 considering the exchange difference between the forward rate available
 at the reporting date for the remaining maturity of the contract and
 the contracted forward rate, is recognised as income or expense in the
 statement of profit and loss.
 
 J.  EMPLOYEE BENEFITS :
 
 i.  Short-Term Benefits :
 
 Short Term Employee Benefits, at the undiscounted amount in the year in
 which the services have been rendered, are charged off to the Profit
 and Loss Account.
 
 ii.  Long-Term Benefits :
 
 a. The Contributions to Provident Fund and Employee State Insurance
 Schemes, which are defined contribution schemes, to the relevant funds
 administered and managed by the Central Government of India, are
 charged off to the Profit and Loss Account as and when incurred. The
 Company has no further obligations under these plans beyond its monthly
 contributions.
 
 b. Provision for Gratuity and Leave Encashment, which are defined
 benefit plans, is made on the basis of an actuarial valuation at the
 balance sheet date carried out by an independent actuary under
 Projected Unit Credit Method.
 
 c. Actuarial gains / losses arises during the year are recognised in
 the Profit and Loss Account.  iii. Terminal Benefits are recognised as
 an expense as and when incurred.
 
 K.  TAXES ON INCOME :
 
 i.  Tax expense is the aggregate of current year income tax, deferred
 income tax charged or credited to the Profit and Loss account.
 
 ii.  Current Year Income Tax :
 
 The Provision for taxation is based on assessable profits of the
 company as determined under the Income Tax Act, 1961.  The Company also
 provides for such disallowances made on completion of assessment
 pending appeals, as considered appropriate depending on the merits of
 each case.
 
 iii. Deferred Income Tax :
 
 Deferred Income Taxes are recognized for the future tax consequences
 attributable to timing differences between the financial statement
 determination of income and their recognition for tax purposes. The
 effect of a change in tax rates on deferred tax assets and liabilities
 is recognized in income using the tax rates and tax laws that have been
 enacted or substantively enacted by the balance sheet date. Deferred
 tax assets are recognized and carried forward only to the extent that
 there is a virtual certainty that sufficient future taxable income will
 be available against which such deferred tax assets can be realised.
 
 iv. Minimum Alternate Tax (MAT) Credit :
 
 MAT credit is recognised, as an Asset only when and to the extent there
 is convincing evidence that the Company will pay normal income tax
 during the specified year. In the year in which the Minimum Alternative
 tax (MAT) credit becomes eligible to be recognised as an asset in
 accordance with the recommendation contained in Guidance Note issued by
 the Institute of Chartered Accountants of India, the said asset is
 created by way of a credit to the profit and loss account and shown as
 MAT Credit Entitlement. The Company reviews the same at each balance
 sheet date and writes down the carrying amount of MAT Credit
 Entitlement to the extent there is no longer convincing evidence to the
 effect that Company will pay normal Income Tax during the specified
 period.
 
 L.  EXPORT BENEFITS :
 
 Advance Licences and Duty Entitlements against exports made by the
 company are accounted in the books on their utilization / disposal.
 However, the value of unutilised unconditional customs duty credit
 granted against Exports under Duty Entitlement Pass Book Scheme is
 being provided in the Books of Account.
 
 M. REVENUE RECOGNITION :
 
 i.  SALES :
 
 Domestic Sales :
 
 Revenue from domestic sales is recognised on delivery of products to
 customers from the factories of the company.
 
 Export Sales :
 
 Revenue from export sales is recognised when the significant risks and
 rewards of ownership are transferred to the customers which is based
 upon the terms of the applicable contract.
 
 ii Dividend on shares held by the company is recognised when the right
 of the company to receive the same is established and interest on
 deposits is accounted on accrual basis.
 
 iii Service income is recognised as per the terms of the contracts with
 customers when the related services are performed or the agreed
 milestones are achieved.
 
 N. BORROWING COSTS :
 
 Borrowing costs that are attributable to the acquisition or
 construction of a qualifying asset are capitalised as part of cost of
 such asset till such time as the asset is ready for its intended use.
 Other borrowing costs are recognised as expense for the period.
 
 O. LEASES :
 
 Lease of assets under which all the risks and rewards of ownership are
 effectively retained by the lessor are classified as operating leases.
 Lease payments under operating leases are recognised as an expense on a
 straight line basis over the period of lease.
 
 P.  PROPOSED / INTERIM DIVIDEND :
 
 Dividends, if any, as recommended by the directors are accounted in the
 books of account, pending approval at the Annual General Meeting.
 
 Q. EARNINGS PER SHARE :
 
 i.  The basic earnings per share is calculated considering the weighted
 average number of equity shares outstanding during the year.
 
 ii The diluted earnings per share is calculated considering the effects
 of potential equity shares on net profits after tax for the year and
 weighted average number of equity shares outstanding during the year.
 
 R.  PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
 
 Provisions, involving substantial degree of estimation in measurement,
 are recognised 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, which are possible or present obligations that
 may but probably will not require outflow of resources, are not
 recognised but are disclosed in the Notes to the financial statements.
 Contingent Assets are neither recognised nor disclosed in the financial
 statements.
 
 S.  USE OF ESTIMATES :
 
 The preparation of financial statements require estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual results and estimates are recognized in the period
 in which the results are known / materialized.