A.  Basis of preparation
 
 These financial statements have been prepared in accordance with the
 generally accepted accounting principles in India (IGAAP) under the
 historical cost convention on accrual basis and comply in all material
 aspects with the Accounting Standards notified under Section 211(3C)
 and other relevant provisions of the Companies Act, 1956.
 
 B.  Use of Estimates
 
 Preparation of financial statements in conformity with IGAAP requires
 the management to make judgments, estimates and assumptions that affect
 the reported amounts of revenues, expenses, assets and liabilities and
 the disclosure of contingent liabilities, at the end of the reporting
 period. Although these estimates are based on the management''s best
 knowledge of current events and actions, uncertainty about these
 assumptions and estimates could result in differences between the
 actual results and estimates which are recognized in future periods.
 
 C.  Fixed Assets and Depreciation
 
 Tangible fixed assets are stated at cost, less accumulated depreciation
 and impairment loss, if any. Cost comprises the purchase price and any
 attributable cost of bringing the asset to its working condition for
 its intended use.
 
 Borrowing costs attributable to acquisition and construction of
 qualifying assets are capitalized as a part of the cost of such assets
 up to the date when such assets are ready for its intended use.
 
 Depreciation is provided on straight line basis at the rates and in the
 manner prescribed under Schedule XIV of the Companies Act, 1956 except
 leasehold improvements which are amortized over the lease period and
 employee perquisite related assets which are depreciated over three
 years.
 
 Computer software is amortized over six years. Fixed assets,
 individually costing less than Rupees Five thousands are fully
 depreciated in the year of purchase. Depreciation on the fixed assets
 added/ disposed off/ discarded during the period is provided on
 pro-rata basis with reference to the month of addition/ disposal/
 discarding.
 
 D.  Investments
 
 Current Investments are carried at lower of cost and fair value
 computed on individual investment basis. Long-term investments are
 stated at cost after deducting provisions made, if any, for other than
 temporary diminution in value.
 
 E.  Inventories
 
 Inventories are valued at lower of cost, computed on weighted average
 basis, and net realizable value.
 
 Cost of inventories comprises all costs of purchases and other costs
 incurred in bringing the inventories to their present condition and
 location.
 
 Materials and other items held for use in the production of inventories
 are written down below cost only if the finished products in which they
 will be used are expected to be sold below cost.
 
 F.  Transactions in foreign currency
 
 Foreign currency transactions are recorded at the exchange rates
 prevailing at the date of the transaction.
 
 Monetary foreign currency items at the year end are restated at year
 end rates. In case of items which are covered by forward exchange
 contracts, the difference between the year end rate and the rate on the
 date of the contract is recognized as exchange difference and the
 premium paid on forward contracts is recognized over the life of the
 contract. All exchange differences, either on settlement or
 translation, are recognized in the Statement of Profit and Loss.
 
 G.  Revenue Recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 Sales are recognized when significant risk and rewards of ownership of
 the goods have passed to the buyer which coincides with delivery and
 are recorded net of trade discounts and VAT.
 
 Interest income is recognized on time proportion basis taking into
 account the amount outstanding and the applicable rate.
 
 Dividend income is recognized when right to receive is established.
 
 H.  Retirement and other employee benefits
 
 Short term employee benefits are recognized as an expense at the
 undiscounted amount in the Statement of Profit and Loss for the period
 in which the related service is rendered.
 
 Post employment and other long term employee benefits are recognized as
 an expense in the Statement of Profit and Loss for the period in which
 the employee has rendered services. The expense is recognized at the
 present value of the amounts payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long term benefits are charged to Statement of
 Profit and Loss.
 
 I.  Taxation
 
 Provision for current tax is made on the basis of estimated taxable
 income for the current accounting period in accordance with the
 provisions of the Income Tax Act, 1961. Deferred tax resulting from
 timing difference between taxable and accounting income is
 accounted for using the tax rates and laws that are enacted or
 substantively enacted as at the Balance Sheet date.  Deferred tax asset
 is recognized and carried forward only to the extent that there is
 virtual certainty that the asset will be realized in future.
 
 J. Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent Liabilities are not recognized, but are disclosed in the
 notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.
 
 K. Impairment of assets
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 if there is any indication of impairment based on internal/ external
 factors. An asset is treated as impaired when the carrying cost of the
 assets exceeds its recoverable value. An impairment loss, if any, is
 charged to the Statement of Profit and Loss in the year in which an
 asset is identified as impaired. Reversal of impairment losses
 recognized in prior years is recorded when there is an indication that
 the impairment losses recognized for the assets no longer exist or have
 decreased.
 
 L. Leases
 
 Leases where significant portion of risk and reward of ownership are
 retained by the Lessor are classified as operating leases and lease
 rental thereof are charged to the Statement of Profit and Loss as per
 the terms of agreement which is representative of the time pattern of
 the user''s benefit.