1.  Basis of Preparation of Financial Statements
 
 The Financial Statements are prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles in India and provisions of the Companies Act, 1956 and
 comply with the Accounting Standards referred to in Section 211 (3C) of
 the Companies Act, 1956.
 
 2.  Investments
 
 Investments that are intended to be held for more than a year from the
 date of acquisition, are classified as long term investment and are
 carried at cost less any provision for permanent diminution in value.
 Investments other than long term investments being current investments
 are valued at cost or fair market value whichever is lower.
 
 3.  Inventories
 
 Inventories are valued at lower of cost or net realizable value.
 
 4.  Revenue Recognition
 
 i) Dividend income is recognized when right to receive the payment is
 established
 
 ii) In respect of other heads of income, the Company follows the
 practice of accounting on accrual basis.
 
 5.  Provision for Income Tax
 
 Current Taxes
 
 Provision for current income-tax is recognized in accordance with the
 provisions of Income Tax Act, 1961 and is made annually based on the
 tax liability after taking credit for tax allowances and exemptions.
 
 Deferred Taxes
 
 Deferred tax assets and liabilities are recognized for the future tax
 consequences attributable to timing differences that result between the
 profits offered for income taxes and the profits as per the financial
 statements. Deferred tax assets and liabilities are measured using the
 tax rates and the tax laws that have been enacted or substantially
 enacted at the Balance Sheet date. Deferred tax assets are recognized
 only to the extent there is reasonable certainty that the assets can be
 realized in the future. Deferred tax assets are reviewed as at each
 Balance Sheet date.
 
 6.  Treatment of Contingent Liabilities.
 
 i) Provisions are recognized in terms of Accounting Standard 29-
 Provisions, Contingent Liabilities and Contingent Assets issued by The
 Institute of Chartered Accountants of India (ICAI), when there is a
 present legal or statutory obligation as a result of past events where
 it is probable that there will be outflow of resources to settle the
 obligation and when a reliable estimate of the amount of the obligation
 can be made.
 
 ii) Contingent Liabilities are recognized only when there is a possible
 obligation arising from past events due to occurrence or non-occurrence
 of one or more uncertain future events not wholly within the control of
 the company or where reliable estimate of the obligation cannot be
 made. Obligations are assessed on an ongoing basis and only those
 having a largely probable outflow of resources are provided for.
 
 iii) Contingent Liabilities are disclosed by way of notes.