I.  Basis of Preparation of Financial Statements :
 
 The financial statements have been prepared under the historical cost
 convention, on the accrual basis of accounting and in accordance with
 the generally accepted accounting principles in India and the
 provisions of the Companies Act, 1956, as adopted consistently by the
 Company.
 
 II.  Use of Estimates :
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual result and estimates are recognised in the period in
 which the results are known / materialized.
 
 III.  Fixed Assets:
 
 Fixed Assets are stated at cost, net of modvat, less accumulated
 depreciation. All cost including financing costs till commencement of
 commercial production, net charges on foreign exchange contracts and
 adjustments arising from exchange rate variations relating to
 borrowings attributable to the fixed assets are capitalized.
 
 IV.  Depreciation:
 
 Depreciation has been provided on Straight Line Method in accordance
 with the provision of Section 205(2) (b) of the Companies Act, 1956 at
 the rates prescribed in Schedule XIV of the Companies Act, 1956. In
 case of addition the depreciation is being provided on pro-rata basis
 with reference to the month of acquisition/ installation.
 
 V.  Investments:
 
 Long-term investments are stated at cost. Provision for diminution in
 the value of long-term investments is made only if; such a decline is
 other than temporary, in the opinion of the management.
 
 VI.  Inventories :
 
 a) Valuation of Inventories is inclusive of taxes or duties incurred
 and on FIFO basis except otherwise stated.
 
 b) Finished Stocks are being valued at direct cost or net realisable
 values whichever is lower.
 
 VII.  Impairment of Fixed Assets :
 
 a) Consideration is given at each balance sheet date to determine
 whether there is any indication of impairment of the carrying amount of
 the company''s fixed assets. If any indication exists, an asset''s
 recoverable amount is estimated. An impairment loss is recognized
 whenever the carrying amount of an aseet exceeds its recoverable
 amount.
 
 b) Reversal of impairment losses recognized in prior years is recorded
 when there is an indication that the impairment losses recognized for
 the asset no longer exists or has decreased.
 
 VIII.  Revenue Recognition :
 
 a.  Sales are inclusive of all the duties and taxes.
 
 b.  Revenue in respect of other income is recognized when a reasonable
 certainty as to its realization exists.
 
 IX.  Foreign Currency Transactions:
 
 i) Transactions including transactions of acquiring fixed assets, in
 foreign currency are recorded by applying the exchange rates at the
 date of the transactions.
 
 ii) Monetary Items denominated in foreign currency remaining unsettled
 at the end of the year, are reported using the closing rates. The
 exchange difference arising as a result of the above is recognised in
 the profit and loss account.
 
 iii) In case the monetary items are covered by the foreign exchange
 contracts, the difference between the year end rate and the exchange
 rate at the date of the inception of the forward exchange contract is
 recognised as exchange difference.
 
 iv) In respect of hedging transactions, the premium/discount
 represented by difference between the exchange rate at the date of the
 inception of the forward exchange contract and forward rate specified
 in the contract is amortised as expense or income over the life of the
 contract.
 
 X.  Borrowing costs :
 
 The company capitalises interest and other costs incurred by it in
 connection with funds borrowed for the acquisition of fixed assets.
 Where specific borrowings are identified to a fixed asset or a new
 unit, the company uses the interest rates applicable to that specific
 borrowing as the capitalisation rate. Where borrowing cannot be
 specifically indentified to fixed assets, the capitalisation rate
 applied is the interest rate applicable to working capital loans of the
 company.  Capitalisation of borrowing costs ceases when all the
 activities necessary to prepare the fixed assets for their intended use
 are substantially complete. Other borrowing costs are charged to profit
 and loss account.
 
 XI.  Taxes on Income :
 
 Income tax expense for the year comprises of current tax, and fringe
 benefit tax. Current tax provision is determined on the basis of
 reliefs deductions etc. available under the income tax act.  No
 Provision is required for deferred tax as the depreciation as per
 Companies Act is higher than the depreciation as per Income Tax Act.
 
 XII.  Deferred Tax :
 
 Deferred Tax is recognised using the liability method, at the current
 rate of taxation, on all timing differences to the extent it is
 probable that a liability or asset will crystallise. Deferred Tax
 Assets are recognised subject to consideration of prudence and are
 periodically reviewed to reassess realisation thereof.
 
 XIII.  Preliminary Expenses :
 
 Preliminary expenses have been amortised in equal installment over a
 period of ten years.
 
 XIV.  General Accounting Policies:
 
 Accounting policies not specifically referred to are consistent with
 generally accepted accounting practices.