IT IS CORPORATE POLICY
 
 Convention
 
 To prepare financial statements in accordance with applicable
 Accounting Standards in India. A summary of important accounting
 policies is set out below. The financial statements have also been
 prepared in accordance with relevant presentational requirements of the
 Companies Act, 1956.
 
 Basis of Accounting
 
 To prepare financial statements in accordance with the historical cost
 convention modified by revaluation of certain Fixed Assets as and when
 undertaken as detailed below.
 
 Fixed Assets
 
 To state Fixed Assets at cost of acquisition inclusive of inward
 freight, duties and taxes and incidental expenses related to
 acquisition. In respect of major projects involving construction,
 related pre-operational expenses form part of the value of assets
 capitalised. Expenses capitalised also include applicable borrowing
 costs, if any.
 
 To capitalise software where it is expected to provide future enduring
 economic benefits. Capitalisation costs include licence fees and costs
 of implementation/system integration services. The costs are
 capitalised in the year in which the relevant software is implemented
 for use.
 
 To charge off as a revenue expenditure all upgradation / enhancements
 unless they bring similar significant additional benefits.
 
 Depreciation
 
 To calculate depreciation on Fixed Assets and Intangible Assets in a
 manner that amortises the cost of the assets after commissioning, over
 their estimated useful lives or, where specified, lives based on the
 rates specified in Schedule XIV to the Companies Act, 1956, whichever
 is lower, by equal annual instalments. Leasehold properties are
 amortised over the period of the lease.
 
 To amortise capitalised software costs over a period of five years.
 
 Revaluation of Assets
 
 As and when Fixed Assets are revalued, to adjust the provision for
 depreciation on such revalued Fixed Assets, where applicable, in order
 to make allowance for consequent additional diminution in value on
 considerations of age, condition and unexpired useful life of such
 Fixed Assets; to transfer to Revaluation Reserve the difference between
 the written up value of the Fixed Assets revalued and depreciation
 adjustment and to charge Revaluation Reserve Account with annual
 depreciation on that portion of the value which is written up.
 
 Impairment of Assets
 
 To provide for impairment loss, if any, to the extent, the carrying
 amount of assets exceed their recoverable amount.  Recoverable amount
 is higher of an assets net selling price and its value in use. Value
 in use is the present value of estimated future cash flows expected to
 arise from the continuing use of an asset and from its disposal at the
 end of its useful life.
 
 Impairment losses recognised in prior years are reversed when there is
 an indication that the impairment losses recognised no longer exist or
 have decreased. Such reversals are recognised as an increase in
 carrying amounts of assets to the extent that it does not exceed the
 carrying amounts that would have been determined (net of amortisation
 or depreciation) had no impairment loss been recognised in previous
 years.
 
 Investments
 
 To state Current Investments at lower of cost and fair value; and Long
 Term Investments, including in Joint Ventures and Associates, at cost.
 Where applicable, provision is made to recognise a decline, other than
 temporary, in valuation of Long Term Investments.
 
 Inventories
 
 To state inventories including work-in-progress at lower of cost and
 net realisable value. The cost is calculated on weighted average
 method. Cost comprises expenditure incurred in the normal course of
 business in bringing such inventories to its location and includes,
 where applicable, appropriate overheads based on normal level of
 activity.  Obsolete, slow moving and defective inventories are
 identified at the time of physical verification of inventories and,
 where necessary, provision is made for such inventories.
 
 Sales
 
 To recognise Gross Sales at the time of delivery of goods and rendering
 of services net of trade discounts to customers and Sales Tax/Value
 Added Tax recovered from customers but including excise duty on goods
 and taxes relating to services, payable by the Company. Net sales are
 stated after deducting such excise duty and taxes.
 
 Investment Income
 
 To account for Income from Investments on an accrual basis, inclusive
 of related tax deducted at source.
 
 Proposed Dividend
 
 To provide for Dividends (including income tax thereon) in the books of
 account as proposed by the Directors, pending approval at the Annual
 General Meeting.
 
 Employee Benefits
 
 To make regular monthly contributions to various Provident Funds which
 are in the nature of defined contribution scheme and such paid/payable
 amounts are charged against revenue. To administer such Funds through
 duly constituted and approved independent trusts with the exception of
 Provident Fund and Family Pension contributions in respect of Unionised
 Staff which are statutorily deposited with the Government.
 
 To administer through duly constituted and approved independent trusts,
 various Gratuity and Pension Funds which are in the nature of defined
 benefit/contribution schemes. To determine the liabilities towards such
 schemes, as applicable, and towards employee leave encashment by an
 independent actuarial valuation as per the requirements of Accounting
 Standard - 15 (revised 2005) on Employee Benefits. To determine
 actuarial gains or losses and to recognise such gains or losses
 immediately in Profit and Loss Account as income or expense.
 
 To charge against revenue, actual disbursements made, when due, under
 the Workers Voluntary Retirement Scheme.
 
 Lease Rentals
 
 To charge Rentals in respect of leased premises and equipment to the
 Profit and Loss Account.
 
 Research and Development
 
 To write off all expenditure other than capital expenditure on Research
 and Development in the year it is incurred.
 
 Capital expenditure on Research and Development is included under Fixed
 Assets.
 
 Taxes on Income
 
 To provide Current tax as the amount of tax payable in respect of
 taxable income for the period, measured using the applicable tax rates
 and tax laws.
 
 To provide Deferred tax on timing differences between taxable income
 and accounting income subject to consideration of prudence, measured
 using the tax rates and tax laws that have been enacted or
 substantially enacted by the Balance Sheet date.
 
 Not to recognise Deferred tax assets on unabsorbed depreciation and
 carry forward of losses unless there is virtual certainty that there
 will be sufficient future taxable income available to realise such
 assets.
 
 Foreign Currency Translation
 
 To account for transactions in foreign currency at the exchange rate
 prevailing on the date of transactions.  Gains/Losses arising out of
 fluctuations in the exchange rates are recognised in the Profit and
 Loss Account in the period in which they arise.
 
 To account for differences between the forward exchange rates and the
 exchange rates at the date of transactions, as income or expense over
 the life of the contracts.
 
 To account for profit /loss arising on cancellation or renewal of
 forward exchange contracts as income/expense for the period.
 
 To account for premium paid on currency options in the Profit and Loss
 Account at the inception of the option.
 
 To account for profit / loss arising on settlement or cancellation of
 currency option as income/expense for the period.
 
 To recognise the net mark to market losses in the Profit and Loss
 Account on the outstanding portfolio of options / forwards / swaps as
 at the Balance Sheet date, and to ignore the net gain, if any.
 
 To account for gains/losses in the Profit and Loss Account on foreign
 exchange rate fluctuations relating to monetary items at the year end.
 
 Claims
 
 To disclose claims against the Company not acknowledged as debts after
 a careful evaluation of the facts and legal aspects of the matter
 involved.
 
 Segment Reporting
 
 To identify segments based on the dominant source and nature of risks
 and returns and the internal organisation and management structure.
 
 To account for inter-segment revenue on the basis of transactions which
 are primarily market led.
 
 To include under Unallocated Corporate Expenses revenue and expenses
 which relate to initiatives/costs attributable to the enterprise as a
 whole and are not attributable to segments.
 
 Financial and Management Information Systems
 
 To practise an Integrated Accounting System which unifies both
 Financial Books and Costing Records. The books of account and other
 records have been designed to facilitate compliance with the relevant
 provisions of the Companies Act on one hand, and meet the internal
 requirements of information and systems for Planning, Review and
 Internal Control on the other. To ensure that the Cost Accounts are
 designed to adopt Costing Systems appropriate to the business carried
 out by the Division with each Division incorporating into its Costing
 System, the basic tenets and principles of Standard Costing, Budgetary
 Control and Marginal Costing as appropriate.