1.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The financial statements have been prepared on the historical cost
 convention basis. The generally accepted accounting principles and the
 Accounting Standards referred under section 211(3C) of the Companies
 Act, 1956 have been adopted by the Company and disclosures made in
 accordance with the requirements of Schedule VI to the Companies Act,
 1956 and the Indian Accounting Standards.
 
 2.  FIXED ASSETS
 
 Gross block of fixed assets have been stated at their original cost.
 Cost includes interest on borrowings upto the date of putting the
 assets to use.
 
 3.  DEPRECIATION
 
 3.1 Depreciation is provided on Fixed assets with reference to their
 historical cost.
 
 3.2 Depreciation is provided on Straight-line method at rates based
 upon life determined by the management which are lower than the life
 determined based on the rates specified in Schedule XIV to the
 Companies Act, 1956. The depreciation rates based on useful life as
 estimated by the management are 19% for Vehicles, 19% for Mobiles
 (office equipment) and 31.33% for Computers (office equipment).
 
 4.  INVESTMENTS
 
 4.1 Long term quoted investments are valued at cost unless there is a
 permanent fall in their value as at the date of Balance Sheet.
 
 4.2 Unquoted investment in subsidiaries being of long term nature are
 valued at cost and no loss is recognized in the fall in their net
 worth, if any, unless there is permanent fall in their value.
 
 5.  CONTINGENT LIABILITY
 
 Liabilities, though contingent, are provided for if there are
 reasonable prospects of such liabilities maturing. Other contingent
 liabilities, barring frivolous claims not acknowledged as debt, are
 disclosed by way of note.
 
 6.  REVENUE RECOGNITION
 
 6.1 Sales are inclusive of excise duty and net of trade discounts.
 Export sales include goods invoiced against confirmed orders and
 cleared from excise and customs authorities.
 
 6.2 Other items of revenue are recognized in accordance with the
 Accounting Standard (AS-9). Accordingly, wherever there are
 uncertainties in the ascertainment-realisation of income such as
 interest from customers (including the financial condition of the
 person from whom the same is to be realized), the same is not accounted
 for.
 
 6.3 Interim dividend income from investments is recognized in the
 Profit and Loss Account on cash basis.
 
 7.  TAXATION
 
 7.1 Tax provision is made, in accordance with the Income Tax Act, 1961
 including the provisions regarding Minimum Alternate Tax and the
 contentions of the Company and also the fact that certain expenditure
 becoming allowable on payment being made before filing of the return of
 income.
 
 7.2 Deferred tax assets and liabilities are accounted for on the basis
 of Accounting Standard AS-22. Deferred tax liabilities and assets are
 recognized at substantively enacted tax rates, subject to the
 consideration of prudence, on timing difference, being the difference
 between taxable income and accounting income that originate in one
 period and are capable of reversal in one or more subsequent periods.
 
 8.  BORROWING COST
 
 Borrowing cost (including difference in exchange rate on the principal
 to the extent it represents interest cost) attributable to the
 acquisition or construction of qualifying assets is capitalized as a
 part of the cost of those assets. Other borrowing costs are recognized
 as an expense in the period to which they relate.
 
 9.  EARNING PER SHARE
 
 The earnings considered in ascertaining the Company’s Earnings Per
 Share (‘EPS’) comprise the net profit after tax after reckoning of
 dividend to preference shareholders. The number of shares used in
 computing basic EPS is the weighted average number of shares
 outstanding during the year.
 
 The diluted EPS is calculated on the same basis as basic EPS, after
 adjusting for the effects of potential dilutive equity shares.