1.  BASIS OF PREPARATION OF FINANCIAL STATEMENT
 
 a) The Financial Statements are prepared under the historical cost
 convention, in accordance with the generally accepted accounting
 principles, accounting standards notified under Section 211(3C) of the
 Companies Act''1956 and the relevant provision thereof. All income and
 expenditure having a material bearing in the Financial Statements are
 recognized on accrual basis.
 
 2.  USE OF ESTIMATES
 
 a) The preparation of Financial Statement requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of Financial Statement and the reported amount
 of revenue and expenses during the reported period. Differences between
 the actual results and estimates are recognized in the period in which
 the results are known/ materialized.
 
 3.  FIXED ASSETS
 
 a) Fixed Assets except revalued assets are stated at cost of
 acquisition inclusive of purchase price, duties, taxes, labour costs
 and directly attributable costs for in house manufacturing of assets
 and other direct costs incurred and other incidental expenses,
 erection/ commissioning expenses etc.  (net of Cenvat benefit availed
 of excise duty, cess, countervailing duty on imported capital goods,
 and vat/sales tax set off availed, wherever applicable) up to the date,
 the assets are put to use. Increase or decrease in long term
 liabilities on account of exchange rate fluctuations has been adjusted
 in the cost of fixed assets.
 
 b) Hardware/Software costs of Enterprises Resource Planning (ERP)
 system includes cost of designing software, which provide significant
 future economic benefits over an extended period.  The cost comprises
 of license fee, cost of system integration and implementation cost. The
 costs are capitalized in the year in which the relevant system is ready
 for intended use.
 
 4.  DEPRECIATION/AMORTIZATION
 
 a) Depreciation on fixed assets is provided On Plant and Machinery on 
 Written Down Value method On other fixed assets on Straight Line 
 Method.at the rates and in the manner specified in Schedule-XIV in the
 Companies Act, 1956.
 
 Hardware/ software cost of ERP are amortized over the estimated useful
 economic life not exceeding four years.
 
 On Computer Software on straight-line method at the rate of 16.21
 percent.
 
 Leasehold land and lease hold improvements are amortized over the
 period of lease.
 
 b) Technical-know how fees is being amortized over a period of the
 agreement.
 
 5.  IMPAIRMENT OF ASSETS
 
 a) An impairment loss is recognized whenever the carrying amount of an
 asset is in excess of its recoverable amount and same is recognized as
 an expense in the statement of profit and loss account of the assets is
 reduced to its recoverable amount.
 
 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 exist or have decreased.
 
 6.  INVESTMENTS
 
 a) Long term investments are valued at cost. Current Investments are
 valued at cost or fair market value whichever is lower. Provision for
 permanent diminution in the value of Long Term Investments, if any, is
 based on perception of the management of the Company.
 
 7.  INVENTORIES
 
 a) Raw material (including packing material), Finished Goods and
 Work-in-Progress are valued at lower of cost (Moving Average Price) or
 net realizable value.
 
 b) Stores and Spares and Material in Transit are valued at cost.
 
 8.  SALES
 
 a) Sales comprise amounts invoiced for goods sold inclusive of excise
 duty, cess, but net of Sales Tax/VAT and returns/rejections.
 
 b) Sales includes sale of own products, design income, job work,
 scraps, tools, dies and moulds and consumable material.
 
 9.  GOVERNMENT GRANTS
 
 a) Grants relating to fixed assets are shown as Deferred Government
 Grant and those of the nature of Capital Subsidy are credited to
 Capital Reserve.
 
 b) Other Government Grants are credited to Profit and Loss Account or
 deducted from the related expenses.
 
 10.  BORROWING COST
 
 a) Borrowing costs directly attributable to the acquisition or
 construction of fixed assets are capitalized as part of the cost of the
 assets up to the date each asset is put to use. All other borrowing
 costs are charged to revenue.
 
 11.  RESEARCH AND DEVELOPMENT
 
 a) Revenue expenditure incurred on research and development is charged
 to Profit and Loss Account in respective account heads.
 
 b) Capital expenditure incurred on research and development activity is
 included in fixed assets and depreciated at applicable rates.
 
 12.  FOREIGN CURRENCY TRANSACTIONS
 
 a) Investments in foreign entities are recorded at the exchange rate
 prevailing on the date of making the investments.
 
 b) Transactions in foreign currencies are recorded at the exchange rate
 prevailing on the date of the transaction.
 
 c) Foreign currency loans covered by forward exchange contracts are
 translated at the rate prevailing on the date of transaction as
 increased or decreased by the proportionate difference between the
 forward rate and exchange rate on the date of transaction, such
 difference having been recognized over the life of the Contract.
 
 d) In the case of liabilities incurred for the acquisition of fixed
 assets, the loss or gain on conversion (at the rate prevailing at the
 year end or at the forward rate where forward cover has been taken) is
 included in the carrying amount of the related fixed assets.
 
 e) Current Assets and Liabilities (other than those relating to fixed
 assets and investments) are restated at the rates prevailing at the
 year end or at the forward rate where forward cover has been taken. The
 difference between exchange rate at the year end and at the date of the
 transaction is recognized as income or expense in Profit and Loss
 Account. In respect of transactions covered by forward exchange
 contracts, the difference between the contract rate and the rate on the
 date of the transaction is recognized as income or expense in the
 Profit and Loss Account over the life of the contract.
 
 13 COMMODITY HEDGING
 
 a) The Company uses forward contracts and options to hedge its exposure
 to the movement of commodity price risk for metals used as raw
 materials. These forward contracts and options are not used for trading
 or speculation purpose.  The gains or losses arising on this account
 are adjusted to the consumption of raw materials.
 
 14.  REPRESENTATIVE OFFICES
 
 a) In translating the financial statements of representative offices,
 the monetary assets and liabilities are translated at the rate
 prevailing at the balance sheet date; non-monetary assets and
 liabilities are translated at exchange rate prevailing at the date of
 transaction and income and expense items are converted at the
 respective monthly average rate.
 
 15.  CUSTOM AND EXCISE DUTY
 
 a) Custom duty on material and machinery lying in bond and in transit
 is accounted for at the time of clearance thereof.
 
 b) Excise Duty has been accounted on the basis of both payments made in
 respect of goods cleared as also provision made for goods lying in
 bonded warehouse.
 
 16.  RETIREMENT BENEFITS
 
 a) The payment for present liability of future payment of gratuity is
 being made to approved gratuity fund, which covers the same under the 
 policy of Life Insurance Corporation of India.
 
 b) Provision for Leave Encashment benefits have been made on the basis
 of actuarial valuation.
 
 17.  SHARE ISSUE EXPENSES
 
 a) Share issue expenses are amortized over a period of five years.
 
 18.  WARRANTY COSTS
 
 a) Product warranty costs are accrued in the year of sale of products,
 based on technical estimates.
 
 19.  LIABILITIES
 
 a) All liabilities are provided for in the accounts except liabilities
 of a contingent nature, which are disclosed in the notes on accounts.
 
 20.  TAXATION
 
 a) The provision for income tax for the year is based on the assessable
 profit as computed in accordance with the Income Tax Act, 1961/Income
 Tax Rules, 1962.
 
 b) Deferred tax is recognized subject to consideration, of prudence on
 timing differences, being the difference between Taxable income and
 accounting income that originate in one period and capable of reversal
 in one or more subsequent periods.
 
 21.  ACCOUNTING STANDARDS
 
 a) The accounts have been prepared in compliance with the applicable
 Accounting Standards referred to in section 211 (3C) of the Companies
 Act, 1956.