a) BASIS OF ACCOUNTING
 
 i) Financial Statements have been prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles and to comply with Accounting Standards prescribed in
 Companies (Accounting Standards) Rules 2006 issued by the Central
 Government in exercise of the powers conferred under section 642(1)(a)
 and the relevant provisions of the Companies Act, 1956.
 
 ii) The Company follows the mercantile system of accounting &
 recognizes the income & expenditure on accrual basis.
 
 b) 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 results and estimates are recognised in the period
 in which the results are known / materialised.
 
 c) FIXED ASSETS
 
 Fixed assets are state d at their cost of acquisition or construction
 less accumulated depreciation. Cost of acquisition or construction is
 inclusive of direct cost (net of recoverable taxes), incidental
 expenses and borrowing cost related to such acquisition or
 construction.
 
 d) INVESTMENTS
 
 Investments are classified into cur rent and long term investments.
 Current investments are stated at the lower of cost and fair value.
 Long term investments are valued at cost. A provision for diminution is
 made to recognize a decline, other than temporary, in the value of long
 term investments.
 
 e) DEPRECIAT ION AND AMORTISATION
 
 i) Depreciation on fixed assets is provided for on the Straight Line
 method in the manner and at the rates specified in Schedule XIV to the
 Companies Act, 1956 except on fixed assets with 100% rate of
 depreciation which are fully depreciated in the year of addition.
 
 ii) Premium on Leasehold land is amortised over the period of lease.
 
 iii) Intangible assets are amortised on straight line basis over their
 estimated useful life. In respect of Patents & Trademarks, useful life
 has been estimated by the Management as 10 years unless otherwise
 stated in the relevant documents and in case of Specialized Software as
 3 years. Depreciation Charge/Amortisation on impaired assets is
 provided by adjusting in the future/ remaining periods so as to
 allocate the asset''s revised carrying amount over its remaining useful
 life.
 
 f) INVENTORIES
 
 Inventories have been valued at lower of cost or net realisable value.
 In respect of stores and spares, packing material and raw material,
 cost has been arrived at on FIFO basis. In case of work in progress and
 finished goods, cost has been arrived at on standard cost basis. Scrap
 has been valued at estimated realisable value.
 
 g) REVENUE RECOGNITION
 
 Revenue from sales is recognised on dispatch of 
 
 i) goods in accordance with the terms of sale.
 
 Sales and purchases are exclusive of inter-unit
 
 ii) transfers.
 
 iii) Export Incentives and benefits are accounted for on accrual basis
 when virtual certainty and their probable use within reasonable time in
 the normal course of business, is established.  
 
 iv) Revenue from Services is recognized when the related services are
 performed.
 
 v) Interest is recognized using the time proportion method. Dividend
 income is recognized when the company''s right to receive dividend is
 established.  Other items of Income are accounted as and when 
 
 vi) right to receive arise.
 
 Non-compete fees received are apportioned
 
 vii) proportionately over the period of such agreement.
 
 h) FOREIGN CURRENCY TRANSACTIONS, FORWARD CONTRACTS AND DERIVATIVES
 
 i) Transactions denominated in the foreign currencies are normally
 recorded at the exchange rates prevailing at the time of the
 transaction.
 
 ii) Monetary items denominated in foreign currencies other than those
 covered by forward exchange contracts are translated into rupees
 equivalent at the rate of exchange prevailing on the Balance Sheet
 date. Exchange differences that arise on settlement of monetary items
 or on reporting date are recognized as income or expense in the period
 in which they arise.
 
 iii) Non-monetary items, which are carried at historical costs
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transactions.
 
 iv) Exchange differences arising on Forward Contracts are recognized in
 the period in which they arise and the premium paid/received is
 accounted as expense/income over the period of the contract.
 
 v) The company intends to adopt Accounting Standard (AS-30), Financial
 Instruments, Recognition and Measurement in due course. Till the
 adoption of AS 30, Mark to Market losses or gains on un-expired Forward
 Contracts entered into to hedge the risk of changes in Foreign Currency
 Exchange Rate on future export sales against the existing long term
 contracts are accounted for on maturity of the contracts so as to safe
 guard against considerable volatility in foreign exchange rates during
 the intervening period.
 
 i) RETIREMENT BENEFITS
 
 i) Retirement benefits in the form of Provident fund is accounted on
 accrual basis and charged to the Profit & Loss Account.  
 
 ii) Provision for liability towards gratuity and unavailed earned
 leaves benefits to employees is made on the basis of actuarial
 valuation.
 
 j) BORROWING COSTS
 
 Borrowing costs that are directly attributable to the acquisition or
 construction of the qualifying assets are capitalised as part of the
 cost of such assets, till the assets are ready for use. All other
 borrowing costs are charged to revenue in the period in which they are
 incurred.
 
 k) LEASES
 
 i) Finance leases or similar arrangement, which effectively transfer to
 the company substantially all the risks and benefits incidental to
 ownership of the leased items, are capitalized and disclosed as leased
 assets. Finance charges are charged directly against income.
 
 ii) Each lease rental paid is allocated between the liability and the
 interest cost, so as to obtain a constant periodic rate of interest on
 the outstanding liability for each period.
 
 iii) Assets acquired on leases where a significant portion of the risks
 and rewards of the ownership are retained by the lessor are classified
 as operating leases. Lease rentals are charged to the Profit and Loss
 Account on accrual basis.
 
 l) EARNINGS PER SHARE (EPS)
 
 The earnings considered in ascertaining the company''s EPS comprise the
 Net Profit or Loss for the period after tax and extra ordinary items.
 The basic EPS is computed on the basis of weighted average number of
 equity shares outstanding during the year. The number of shares for
 computation of diluted EPS comprises of weighted average number of
 equity shares considered for deriving basic EPS and also the weighted
 average number of equity shares which could be issued on the conversion
 of all dilutive potential equity shares.
 
 m) TAXES ON INCOME
 
 i) Tax expense for the year comprises of Current Tax, and Deferred Tax.
 Current taxes are measured at the current rate of tax in accordance
 with provisions of the Income Tax Act, 1961.
 
 ii) Deferred tax Assets and Liabilities are recognized for future tax
 consequences attributable to the timing differences that result between
 taxable profit and the profit as per the financial statements. Deferred
 tax as sets and liabilities are measured using the tax rates and tax
 laws that have been enacted or substantively enacted by the Balance
 Sheet date,
 
 iii) Deferred tax assets are recognized on unabsorbed depreciation and
 carry forward of losses under tax laws to the extent there is virtual
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realized.
 
 iv) The effect on deferred tax as sets and liabilities of a change in
 tax rates is recognized in the Profit & Loss Account in the year of
 change.
 
 n) IMPAIRMENT OF ASSETS
 
 The carrying values of fixed assets and other assets of a cash
 generating unit are reviewed for impairment when events or changes in
 circumstances indicate the carrying value may not be recoverable, if
 any such indication exists and where the carrying value exceeds the
 estimated recoverable amount, the assets of the cash generating units
 are written down to their recoverable amount. The recoverable amount is
 the greater of the net selling price and value in use. In assessing
 value in use the estimated future cash flows are discounted to their
 present value using the pre-tax discount rate that reflects current
 market assessments of the time value of money and the risks specific to
 the asset. For an asset that does not generate largely independent cash
 flows, the recoverable amount is determined for the cash generating
 unit to which the assets belongs Impairment losses are recognised in
 the Profit and Loss Account.
 
 o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 Provisions involving substantial degree of estimation in measurement
 are recognised 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 recognised but are disclosed in the
 notes. Contingent Assets are neither recognised nor disclosed in the
 financial statements.