1.  Basis of Preparation of Accounts
 
 The Financial Statements have been prepared to comply in all material
 aspects with all the applicable accounting principles in India, the
 applicable accounting standards notified u/s 211(3C) of the Companies
 Act, 1956 and the relevant provisions of the Companies Act, 1956.
 
 2.  Fixed Assets and Depreciation
 
 a) Fixed Assets are carried at cost of acquisition or construction or
 at manufacturing cost (in case of own manufactured assets) less
 accumulated depreciation. All costs relating to the acquisition and
 installation of fixed assets are capitalized and include borrowing
 costs relating to funds attributable to construction or acquisition of
 underlying assets up to the date of asset is ready for its intended
 use.
 
 Expenditure that relate directly to the specific asset and attributable
 to the construction activity incurred during the period of construction
 is charged to capital work-in-progress and on completion the costs are
 allocated to the respective Fixed Assets.
 
 b) Depreciation is charged for assets other than plant & machinery from
 the beginning of the month in which the asset is ready for use. Plant
 and machinery is depreciated from the date the asset is ready for use.
 
 Depreciation has been provided on the straight-line method on a
 pro-rata basis at the rates specified in Schedule XIV of the Companies
 Act, 1956, except in case of computers, office equipments, vehicles,
 furniture & fittings and certain plant & machinery items where
 depreciation rates higher than the rates specified in Schedule XIV of
 the Companies Act, 1956 have been used and are as mentioned below.
 
 Rates                                (%)
 
 Computers                            31.67
 
 Furniture & Fittings                 19.00
 
 Plant & Machinery (Material 
 handling equipments)                 19.00
 
 Office Equipments                    23.75
 
 Mechanical & Testing Equipments      23.75
 
 Vehicles                             19.00
 
 Imported Machinery                   11.31
 
 Leasehold Land is being amortised 
 over the lease period.
 
 Assets costing less than or equal to Rs.5,000 are depreciated at the
 rate of 100% in the year of purchase.
 
 The Company reviews the useful lives of the fixed assets periodically
 and accordingly charges the unamortised balance of the asset over the
 residual life of the asset.
 
 3.  Investments
 
 Long term investments are carried at cost less permanent diminution of
 value. Short term investments are carried at lower of cost or market
 value. Dividends arising out of investments are being accounted on
 accrual basis.
 
 4.  Inventories
 
 Inventories are valued at cost or net realisable value whichever is
 lower. Cost is determined on First in First out (FIFO) basis. Cost of
 finished goods and work in progress are inclusive of material cost,
 appropriate overheads and excise duty, where applicable.
 
 5.  Foreign Currency Transactions
 
 a) Foreign currency transactions are recorded at the exchange rates
 prevailing at the date of transaction. Exchange differences arising on
 settlement of transactions, are recognised as income or expense in the
 year in which they arise.
 
 b) At the balance sheet date, all assets and liabilities denominated in
 foreign currency are reported at the exchange rates prevailing at the
 balance sheet date.
 
 c) In case of forward foreign exchange contracts where an underlying
 asset or liability exists at the balance sheet date, the difference
 between the forward rate and the exchange rate at the inception of the
 contract is recognised as income or expense over the life of the
 contract.
 
 d) In case of forward foreign exchange contracts taken for highly
 probable /forecast transactions, the net loss, if any, calculated on
 Mark to Market principle as at the balance sheet date is recorded.
 
 e) Profit or loss arising on cancellation or renewal of a forward
 contract is recognised as income or expense in the year in which such
 cancellation or renewal is made.
 
 6.  Revenue Recognition
 
 Sales are recognised on transfer of risk and rewards to customers and
 are accounted for inclusive of excise duty and are net of sales tax.
 
 7.  Taxation
 
 a) Current tax Charge
 
 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
 assessments pending appeals, as considered appropriate depending on the
 merits of each case.
 
 b) Fringe Benefit Tax:
 
 Provision for Fringe Benefit tax has been made as per the provisions of
 the Income Tax Act,1961.
 
 c) Deferred Tax
 
 The tax expense/credit on account of deferred tax is charged or
 credited to the profit and loss account for the year.  The Company
 provides for deferred tax using the liability method, based on the tax
 effect of timing differences resulting from the recognition of items in
 the financial statements and in estimating its current income tax
 provision.  Deferred tax charge or credit is recognised using the tax
 rates that have been enacted or substantially enacted by the balance
 sheet date.
 
 Deferred tax assets arising from temporary differences are recognised
 only if there is reasonable certainty of realisation of such assets.
 
 8.  Warranty
 
 Provision for warranty is made on the basis of technical evaluation by
 the management and provided for in the year of sale.
 
 9.  Employee Benefits
 
 The Company has Defined Contribution plans for post employment
 benefits namely Provident Fund and Superannuation Fund which are
 recognised by the income tax authorities. These funds are administered
 through trust and the Companys contributions thereto are charged to
 revenue every year. The Companys contribution to State plans namely
 Employee State Insurance Fund and Employee Pension Scheme 1995 are
 charged to revenue every year.
 
 The Company has Defined Benefit plans namely leave
 encashment/compensated absence, Gratuity and interest on Provident Fund
 for employees, for which the liability is determined on the basis of an
 actuarial valuation at the end of the year. The Gratuity Fund is
 recognised by the income tax authorities and is administered through a
 trust.  Gains and losses arising out of actuarial valuations are
 recognised immediately in the Profit and Loss Account as income or
 expense.
 
 10.  Leases
 
 Lease rental in respect of assets taken on Cancelable Operating Lease
 are recognised on a straight-line basis over the period of lease.
 
 11.  Research & Development expenses
 
 Revenue expenditure on research and development is charged off in the
 year in which it is incurred. Capital expenditure on research and
 development is shown as addition to fixed assets and depreciated
 accordingly.
 
 12.  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 the recoverable amount.
 
 13.  Provisions and Contingencies
 
 The Company creates a provision when there is a present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of the obligation. A
 disclosure of contingent liability is made when there is a possible
 obligation or a present obligation that will probably not require
 outflow of resources or where a reliable estimate of the obligation
 cannot be made.