A. Method of Accounting
 
 (a) The financial statements are prepared on the historical cost
 convention and in accordance with the Generally Accepted Accounting
 Principles (''GAAP'').
 
 (b) The Company follows accrual system of accounting in the preparation
 of accounts except where otherwise stated.
 
 (c ) The preparation of the financial statements in conformity with
 GAAP requires that the management of the Company makes estimates and
 assumptions that affect the reported accounts of income and expenses of
 the period, reported values of assets and liabilities and disclosures
 relating to contingent assets and liabilities as of date of the
 financial statements. Examples of such estimates include provision for
 doubtful debts, provision for doubtful loans and advances, provisions
 for diminution in value of investments, estimated period of utility of
 software package, provision for value of obsolete/non moving
 inventories etc. Actual results may differ from these estimates.
 
 B Fixed Assets
 
 (a) Fixed Assets are stated at actual cost less accumulated
 depreciation and impairment loss. Actual cost is inclusive of freight,
 installation cost, duties, taxes and other incidental expenses for
 bringing the asset to its working conditions for its intended use but
 net of CENVAT.
 
 (b) Capital Work-in-Progress -All expenses incurred for acquiring,
 erecting and commissioning of fixed assets including interest on long
 term loans utilized for meeting capital expenditure and incidental
 expenditure incurred during construction of the projects are shown
 under capital work-in-progress and are allocated to the fixed assets on
 the completion of the respective projects.
 
 (c) Intangible Assets- (i) Revenue expenditure of specialized R&D
 including technical know-how fee incurred for development and
 improvement of technology, products and designs etc which will generate
 probable future economic benefits are recognised as intangible assets.
 (ii) Purchased of computer software used for the purpose of operations
 is capitalised, however, any expenses on software support, maintenance,
 upgrade etc. payable periodically is charged to the Profit & Loss
 Account.
 
 C Leases
 
 (a) Finance Lease or similar arrangements, which effectively transfer
 to the Company substantially all the risks and benefits incidental to
 ownership of the leased item, are capitalized and disclosed as leased
 assets. Finance charges are charged directly against income.
 
 (b) Leases where the lessor effectively retains substantially all the
 risks and benefits of ownership of the leased items are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the profit and loss account or on a basis, which reflect the time
 pattern of such payment appropriately.
 
 D Depreciation, Amortisation and Impairment
 
 (a) Depreciation is provided for on Buildings (including buildings
 taken on lease) and Plant & Machinery on straight line method and on
 other fixed assets on written down value method at the rates prescribed
 in the Schedule XIV of the Companies Act, 1956.
 
 (b) Depreciation due to increase or decrease in the liability on
 account of exchange fluctuation or on account of rollover charges on
 forward exchange contract is provided prospectively over the residual
 life of the assets.
 
 (c) On assets acquired on lease (including improvements to the
 leasehold premises), depreciation has been provided for on Straight
 Line Method at the rates as per Schedule XIV of the Companies Act, 1956
 or at the rates worked out on the basis of remaining useful life of the
 assets, whichever is higher.
 
 (d) Premium on leasehold land is amortised over the period of lease.
 
 (e) The Technical Know-how fees is written off over a period of six
 years from the year of the commencement of commercial production of the
 respective projects. Where the production has not commenced and the
 benefit of know- how is unlikely to accrue, the fee paid therefore is
 fully written off in the year in which it is so determined.
 
 (f) Intangible assets are amortised over a period of five years or life
 of the product considered at the end of each financial year whichever
 is earlier. Amortisation commences when the asset is available for use.
 
 (g) At the balance sheet date, an impairment loss is recognized
 whenever the carrying amount of an asset exceeds its recoverable
 amount.
 
 E Investments
 
 (a) The cost of an investment includes incidental expenses like
 brokerage, fees and duties incurred prior to acquisition.
 
 (b) Long term investments are shown at cost. Provision for diminution
 is made only if, in the opinion of the management such a decline is
 other than temporary.
 
 (c ) Investments which are intended to be held for less than one year
 are classified as current investments and are carried at lower of cost
 and fair value determined on an individual investment basis.
 
 (d) Advance against share application money are classified under the
 head Investments.  F Inventories
 
 (a) Raw Materials, Materials in transit, Packing Materials, Stores &
 Spares and Components.
 
 At cost or net realizable value whichever is lower.
 
 (b) Finished Goods and Work-in-Process At lower of cost and net
 realizable value
 
 Note: Cost of Inventories is ascertained on First in First out (FIFO)
 basis.
 
 (c) Stock in trade - Quoted At lower of cost and market value
 
 - Unquoted At lower of cost and break-up value
 
 (d) Contract Work in Progress At cost
 
 (e) Loose Tools After write-off at 27.82% p.a.
 
 G Revenue Recognition
 
 (a) Sales & services include sales during trial run and excise duty
 recoverable. Liquidated damages are accounted for as and when they are
 ascertained.
 
 (b) Revenue in respect of long term turnkey works contracts is
 recognised under percentage of completion method subject to such
 contracts having progressed to a reasonable extent. Revenue in respect
 of other works contracts and services is recognised on completed
 contract method.
 
 (c) Insurance claims are accounted for as and when admitted by the
 concerned authority.
 
 H Foreign Currency Transactions
 
 (a) Transactions denominated in foreign currency are normally recorded
 at the exchange rate prevailing at the time of the transactions.
 
 (b) Monetary items denominated in foreign currency at the year end and
 not covered under forward exchange contracts are translated at the year
 end rates.
 
 (c) Any income or expense on account of exchange difference between the
 date of transaction and on settlement or on translation is recognised
 in the profit and loss account as income or expense.
 
 (d) In case of forward exchange contracts, the premium or discount
 arising at the inception of such contracts, is amortised as income or
 expense over the life of the contract, further exchange difference on
 such contracts i.e. difference between the exchange rate at the
 reporting /settlement date and the exchange rate on the date of
 inception of contract/the last reporting date, is recognized as income/
 expense for the period except where the foreign currency liabilities
 have been incurred in connection with fixed assets acquired up to
 March, 2004 and subsequent thereto in case of fixed assets acquired
 from a country outside India, where the exchange differences are
 adjusted in the carrying amount of concerned fixed assets..
 
 I Provisioning/Write off of Doubtful Debts
 
 The sundry debtors which are outstanding for more than three years from
 their respective due dates are written off to profit and loss account.
 The debtors which are outstanding for more than two years but less than
 three years are provided for at 100% whereas debtors outstanding for
 more than one year but less than two years are provided for at 30% of
 the amount outstanding. No write off or provisions are made for
 specific cases where management is of the view that the amounts are
 recoverable even if falling under the ageing as mentioned above.
 
 J Borrowing Costs
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of qualifying asset are capitalized as part
 of cost of such asset. Other borrowing costs are recognized as an
 expense in the period in which they are incurred.
 
 K Excise and Customs Duty
 
 Excise duty payable on production is accounted for on accrual basis.
 Provision is made in the books of account for customs duty on imported
 items on arrival and lying in bonded warehouse and awaiting clearance.
 
 L CENVAT Credit
 
 The CENVAT credit available on purchase of raw materials, other
 eligible inputs and capital goods is adjusted against excise duty
 payable on clearance of goods produced. The unadjusted CENVAT credit is
 shown under the head Loans and advances.
 
 M Employees Benefits
 
 (Effective April 1, 2007, the Company has adopted the Revised
 Accounting Standard - 15(Revised-2005) ''Employee Benefits''). The
 relevant policies are:
 
 Short Term Employee Benefits
 
 Short term employee benefits are recognised in the period during which
 the services have been rendered.
 
 Long Term Employee Benefits
 
 a) Defined Contribution plan
 
 ( i ) Provident Fund and employees'' state insurance schemes
 
 All employees of the Company are entitled to receive benefits under the
 Provident Fund, which is a defined contribution plan.  Both the
 employee and the employer make monthly contributions to the plan at a
 predetermined rate (presently 12%) of the employees'' basic salary.
 These contributions are made to the fund administered and managed by
 the Government of India. In addition, some employees of the Company are
 covered under the employees'' state insurance schemes, which are also
 defined contribution schemes recognized and administered by the
 Government of India.
 
 The Company''s contributions to both these schemes are expensed in the
 Profit and Loss Account. The Company has no further obligations under
 these plans beyond its monthly contributions.
 
 ( ii ) Gratuity
 
 The Company provides for gratuity obligations through a defined benefit
 retirement plan (the ''Gratuity Plan'') covering all employees. The
 Gratuity Plan provides a lump sum payment to vested employees at
 retirement or termination of employment based on the respective
 employee salary and years of employment with the Company. The Company
 provides for the Gratuity Plan based on actuarial valuations in
 accordance with Accounting Standard 15 (revised), Employee
 Benefits The Company makes annual contributions to the HDFC Standard
 Life Insurance Company Ltd for the Gratuity Plan in respect of
 employees.  The present value of obligation under gratuity is
 determined based on actuarial valuation using Project Unit Credit
 Method, which recognizes each period of service as giving rise to
 additional unit of employee benefit entitlement and measures each unit
 separately to build up the final obligation.
 
 b) Other long term benefit Leave Encashment
 
 The Company has provided for the liability at period end on account of
 unavailed earned leave as per the actuarial valuation as per the
 Projected Unit Credit Method.
 
 c) Actuarial gains and losses are recognized as and when incurred.
 
 N Preliminary, Securities issue expenses and Redemption premium on
 bonds and debentures are adjusted against securities premium account.
 
 O Research & Development Costs
 
 Revenue expenditure on research phase is charged to Profit & Loss
 Account in the year in which it is incurred. Capital Expenditure is
 added to the cost of fixed assets.
 
 P Taxes on Income
 
 Tax expense comprises of current and deferred tax. Current income tax
 is measured at the amount expected to be paid to the tax authorities in
 accordance with the Indian Income Tax Act. Deferred income taxes
 reflects the impact of current year timing differences between taxable
 income and accounting income for the year and reversal of timing
 differences of earlier years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets are recognized only to the extent that there is a reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realized. Unrecognized
 deferred tax assets of earlier years are re-assessed and recognized to
 the extent it has become reasonably certain that future taxable income
 will be available against which such deferred tax assets can be
 realized.
 
 Q Segment Reporting
 
 Segments are identified in line with the Accounting Standard on Segment
 Reporting (AS-17) taking into account the organization structure as
 well as the differential risk and returns of the segments. The
 unallocable items include income and expenses items which are not
 directly identifiable to any segment and therefore not allocated to any
 business segment.
 
 R Earnings Per Share
 
 In determining earnings per share, the Company considers the net profit
 after tax and includes the post-tax effect of any extra ordinary items.
 The number of shares used in computing basic earnings per share is the
 weighted average number of shares outstanding during the period.
 
 S Provision, 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 provable that there will be a out flow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 notes. Contingent assets are neither recognized nor disclosed in the
 Financial Statements.