1 Basis of preparation of financial statements
 
 a) The financial statements have been prepared to comply in all
 material respects with the Companies (Accounting Standards) Rules, 2006
 and the relevant provisions of the Companies Act, 1956.
 
 b) The financial statements have been prepared under the historical
 cost convention on an accrual basis.
 
 c) The accounting policies applied by the Company are consistent with
 those used in the previous year.
 
 2 Fixed Assets
 
 Fixed assets are stated at cost less accumulated depreciation. Cost
 comprises the purchase price and any other attributable cost of
 bringing the asset to its working condition for its intended use.
 Financing costs relating to acquisition of qualifying fixed assets are
 also included to the extent they relate to the period till such assets
 are ready to be put to use.
 
 3 Depreciation
 
 Depreciation on fixed assets has been provided in a manner that
 amortizes the cost of the assets over their estimated useful lives as
 detailed below:
 
 a) On assets acquired prior to 01.08.1987, on a straight-line method at
 the rates determined in the year of acquisition under section 205 (b)
 of the Companies Act, 1956. No depreciation is provided on assets
 scrapped or sold during the year.
 
 b) On assets other than patterns, acquired on or after 01.08.1987, on
 straight line method as per Schedule-XIV to the Companies Act, 1956.
 
 c) On patterns, on straight line method on the basis of estimated
 useful life as given below:
 
 Sr.  Particulars                                         Rate of
 No.                                                    Depreciation
 
 1 Patterns with estimated useful life of less than 
 one year & one time use.                                  100%
 
 2 Patterns with estimated useful life of more than 
 one year but less than eight years.                        20%
 
 3 Patterns with estimated useful life of more t
 han eight years.                                        11.31%
 
 4 Intangible Assets
 
 Computer Software
 
 Computer software is amortized on straight line method over a period of
 three years.
 
 5 Inventories
 
 a) Inventories are valued at the lower of cost and net realizable
 value.
 
 b) The cost is calculated on weighted average method.
 
 c) Cost comprises costs of purchase, costs of conversion and other
 costs incurred in bringing the inventories to their present location
 and condition.
 
 6 Construction Contracts
 
 a) Contract revenue and contract costs arising from fixed price
 contracts are recognized in accordance with the percentage of
 completion method.
 
 b) The stage of completion is measured by reference to costs incurred
 to date as a percentage of total estimated costs for each contract.
 
 c) Full provision is made for any loss in the year in which it is first
 foreseen.  /
 
 7 Research and Development
 
 Research and development costs are expensed as incurred, except for
 development costs which relate to the design and testing of new or
 improved materials, products or processes which are recognized as an
 asset to the extent that it is expected that such assets will generate
 future economic benefits.
 
 8 Revenue Recognition
 
 a) Sale of products and services are recognized when the significant
 risks and rewards of ownership of the goods have passed to the buyer
 and when services are rendered.
 
 b) Where the ability to assess the ultimate collection with reasonable
 certainty is lacking at the time of raising any claim, revenue
 recognition is postponed to the extent of uncertainty involved. In such
 cases revenue is recognized only when it is reasonably certain that the
 ultimate collection will be made.
 
 9 Foreign Currency Transactions
 
 a) Initial Recognition: Transactions denominated in foreign currencies
 are recorded at the exchange rates prevailing on the date of the
 transaction.
 
 b) Conversion: At the year end, monetary items denominated in foreign
 currencies other than those covered by forward contracts are converted
 into rupee equivalents at the year-end exchange rates.
 
 c) Forward Exchange Contracts: In respect of transactions covered by
 forward exchange contracts, the difference between the forward rate and
 the exchange rate at the date of the transaction is recognized as
 income or expense over the life of the contract.
 
 d) Exchange Differences: All exchange differences arising on
 settlement/conversion on foreign currency transactions are included in
 the Profit and Loss Account.
 
 e) Foreign entities: Assets and liabilities of foreign entities are
 translated into rupee equivalents using year-end spot foreign exchange
 rates. Revenues and expenses are translated monthly at average exchange
 rates.
 
 10 Leases
 
 Operating lease payments are recognized as an expense in the profit and
 loss account on a straight-line basis over the lease term.
 
 11 Borrowing Costs
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of a qualifying asset are capitalized as
 part of the cost of that asset. Other borrowing costs are recognized as
 an expense in the period in which they are incurred.
 
 12 Investments
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments.
 
 a) Current investments are carried at lower of cost and fair value
 determined on an individual investment basis.
 
 b) Long-term investments are carried at cost. However, provision for
 diminution in value is made to recognize a decline other than temporary
 in the value of the investments.
 
 13 Employee Benefits
 
 Short term compensated absence benefits (both vesting and non vesting)
 are accounted for on the basis of the actual valuation of the leave
 entitlement as on the balance sheet date.
 
 The actuarial valuations in respect of post employment defined benefit
 plans and long term employee benefits as at the balance sheet date are
 measured using Projected Unit Credit Method.
 
 I.  Short Term Employee Benefits:
 
 All employee benefits payable wholly within twelve months of rendering
 the services are classified as short term employee benefits. Benefits
 such as salaries, wages, expected cost of bonus and short term
 compensated absences, etc. are recognized in the period in which the
 employee renders the related service.
 
 II.  Post-Employment Benefits:
 
 a) Defined Contribution Plans:
 
 The Companys superannuation scheme, state governed provident fund
 scheme related to Dewas factory and employee state insurance scheme are
 defined contribution plans. The contribution paid/payable under the
 scheme is recognized during the period in which the employee renders
 the related service.
 
 b) Defined Benefit Plans:
 
 The employees gratuity fund scheme, provident fund scheme managed by a
 Trust and pension scheme are the Companys defined benefit plans. The
 present value of the obligation under such defined benefit plans is
 determined based on actuarial valuation using the Projected 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.
 
 The obligation is measured at the present value of the estimated future
 cash flows. The discount rates used for determining the present value
 of the obligation under defined benefit plans, is based on the market
 yields on Government securities as at the balance sheet date, having
 maturity periods approximating to the terms of related obligations.
 
 Actuarial gains and losses are recognized immediately in the Profit &
 Loss Account.
 
 In case of funded plans, the fair value of the plans assets is reduced
 from the gross obligation under the defined benefit plans, to recognize
 the obligation on net basis.
 
 Gains or losses on the curtailment or settlement of any defined benefit
 plan are recognized when the curtailment or settlement occurs. Past
 service cost is recognized as expenses on a straight-line basis over
 the average period until the benefits become vested.
 
 The Company pays contribution to a recognized provident fund trust in
 respect of all locations except Dewas factory. The guidance note on
 implementing AS 15, Employees Benefits (Revised 2006) as per issued by
 the Institute of Chartered Accountants of India (ICAI) states that
 provident funds set up by employer, which requires interest shortfall
 to be met by the employer, needs to be treated as a defined benefit
 plan. In the absence of clear guidelines on the issue of Actuarial
 Valuation related to the interest shortfall to be made good by the
 employer, the Companys actuary has expressed their inability to
 reliably measure the provident fund liability of the Companys
 recognized provident fund. Accordingly the Company is unable to exhibit
 the related disclosures.
 
 III.  Long Term Employee Benefits:
 
 The obligation for long term employee benefits such as long term
 compensated absences, and leave travel compensations are recognized in
 the same manner as in the case of defined benefit plans as mentioned in
 note II (b) above.
 
 IV.  Termination Benefits:
 
 Where termination benefits such as compensation under voluntary
 retirement scheme is payable within a year of the balance sheet date,
 the actual amount of termination benefits is accounted as expense in
 year of accrual. Where termination benefits are payable beyond one year
 of the balance sheet date, the discounted amount of termination
 benefits is amortised over a definite period.
 
 14 Employee Stock Option Scheme
 
 In respect of stock options granted pursuant to the Companys Employee
 Stock Option Scheme, the intrinsic value of the options (excess of
 market price of the share over the exercise price of the option) is
 treated as discount and accounted as employee compensation cost over
 the vesting period.
 
 15 Taxes on Income
 
 a) Tax on income for the current period is determined on the basis of
 taxable income after considering the various deductions available under
 the Income Tax Act, 1961.
 
 b) Deferred tax is recognized on timing differences between the
 accounting income and the taxable income for the year. The tax effect
 is calculated on the accumulated timing differences at the end of the
 accounting period based on prevailing enacted or subsequently enacted
 regulations.
 
 16 Segment Accounting
 
 a) The accounting policies for individual segments are in line with
 accounting policies of the company.
 
 b) Segment revenue from inter segment transactions is accounted on the
 basis of transfer price agreed between the segments. Such transfer
 prices are determined with reference to the desired margins.
 
 17 Accounting for interests in Joint Ventures Type of Joint Venture
 
 A.  Jointly Controlled Operations
 
 Companys share of revenue, expenses, assets and liabilities are
 included in Revenues, Expenses, Assets and Liabilities respectively.
 
 B.  Jointly Controlled Entities
 
 Investment in such Joint ventures is carried at cost after providing
 for any permanent diminution in value, if applicable. Income on
 investments in incorporated Jointly Controlled Entities is recognized
 when the right to receive the same is established.
 
 18 Provisions
 
 A Provision is recognized when an enterprise has a present obligation
 as a result of a past event and it is probable that an outflow of
 resources is expected to settle the obligation, in respect of which a
 reliable estimate can be made.  Provisions are reviewed at each balance
 sheet date and adjusted to reflect the current management estimates.