1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The Financial Statements are prepared under the historical cost
 convention, on accrual basis and in accordance with the generally
 accepted accounting principles and applicable Accounting Standards
 issued by the Institute of Chartered Accountants of India and the
 relevant provisions of the Companies Act, 1956.
 
 2) FIXED ASSETS AND DEPRECIATION
 
 Fixed Assets are stated at cost of acquisition or construction, which
 comprises of purchase price (net of Modvat / Cenvat /rebate and
 discounts, wherever applicable) and any directly attributable cost of
 bringing the asset to its working condition for the intended use.
 Expenditure during construction period including borrowing cost,
 wherever applicable, is allocated on the direct cost of the relevant
 assets on a pro-rata basis.
 
 Depreciation on fixed assets has been provided as under:
 
 a) Depreciation on fixed assets is provided on Straight Line Method at
 the rates and in the manner prescribed in schedule XIV to the Companies
 Act, 1956 as amended except in the case of following assets for which
 depreciation has been provided at higher rates based on the useful life
 as determined by Management :
 
 Additions to Communication Equipments (w.e.f. 01.04.2001) 20%
 
 Machinery acquired after expiry of lease term 20%
 
 Utilities 20%
 
 b) Depreciation on assets added /sold during the year is provided on
 pro rata basis with reference to the date of addition/disposal of the
 respective assets.
 
 c) Depreciation on incremental cost arising on account of premium on
 forward contract of foreign currency liabilities for acquisition of
 fixed assets has been provided as aforesaid over the residual life of
 the respective assets.
 
 d) Individual assets costing Rs. 5,000/- or less are depreciated in
 full.
 
 e) Leasehold land is amortized equally over unexpired period of lease
 from the date it is put to use.
 
 3) INVENTORIES
 
 a) Raw materials, components, stores & spares are valued at cost on
 First in First out (FIFO) basis or net realizable value which ever is
 lower. The cost is arrived at after deducting the cenvat credit.
 
 b) Finished goods and work in process are valued at lower of cost or
 net realizable value. Cost is arrived at by absorption costing method.
 Finished goods and work in process includes cost of conversion incurred
 in bringing the inventories to its present location and condition.
 
 c) Scrap is valued at net realizable value.
 
 d) Goods in transit are valued at cost.
 
 4) RECOGNITION OF INCOME AND EXPENDITURE
 
 a) Sales are recognized, net of returns, on dispatch of goods to
 customers and are recorded gross of excise duty and net of sales tax
 and discounts.
 
 b) Insurance claims made by the company are accounted for at the time
 of their acceptance.
 
 c) Product warranty claims are charged to the Profit & Loss account as
 and when claimed by the customers on actual basis.
 
 d) Liability on account of customs duty on imported material in transit
 is accounted in the year in which the goods are cleared from the
 customs.
 
 e) Individual prior period items up to Rs. 20,000/- are treated as
 income/expenditure for the current year.
 
 5) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the date of the transaction.  Monetary foreign currency
 assets and liabilities (monetary items) are reported at the exchange
 rate prevailing on the balance sheet date.
 
 '' Monetary Assets and Liabilities hedged by a hedge contract are
 expressed in Indian Rupees at the rate of exchange prevailing on the
 date of Balance Sheet adjusted to the rates in the hedge contract. The
 exchange difference arising either on settlement or at reporting date
 is recognized in the Statement of Profit and Loss except in cases where
 they relate to acquisition of fixed assets, in which case they are
 adjusted to the carrying cost of such assets Pursuant to the
 notification of the Companies (Accounting Standards) Amendment Rules
 2006 on 31 March 2009, this amended Accounting Standard 11 on the
 Effects of changes arising during the year, in so far as they relate to
 the acquisition of a depreciable capital asset are added to/deducted
 from the cost of the asset and depreciated over the balance life of the
 asset.
 
 6) EMPLOYEE BENEFITS
 
 Employee benefits have been recognized in accordance with revised
 AS-15. Accordingly,
 
 i) Long term compensated absences are provided for based on actuarial
 valuation at the end of each financial year.
 
 ii) Provident Fund is a defined contribution scheme and the same is
 administered through Regional Employees Provident Fund Organisation.
 Contribution to the said Organisation paid/ payable during the year is
 recognised in the Profit and Loss account. The shortfall, if any,
 between the return guaranteed by the Fund and actual earnings of the
 Fund is provided for by the holding company and contributed to the
 Fund.
 
 iii) Gratuity liability is a defined benefit obligation unfunded and is
 fully provided for on the basis of actuarial valuation made at the end
 of each financial year. The actuarial valuation is made on Projected
 Unit Credit (PUC) method.
 
 iv) Actuarial gains/losses are immediately recognised and are not
 deferred.
 
 7) BORROWING COSTS
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised/ charged to revenue
 in accordance with the Accounting Standard-16 issued by the Institute
 of Chartered Accountants of India.  Other Borrowing Costs are charged
 to Profit and Loss Statement.
 
 8) TAXES ON INCOME
 
 a) Provision for current tax is made in accordance with and at the
 rates specified under the Income Tax Act, 1961, as amended. Tax
 expenses are accounted in the same period to which the revenue and
 expenses relate.
 
 b) Provision for deferred tax is made in accordance with Accounting
 Standard 22-'' Acounting for Taxes on Income'' issued by the Institute
 of Chartered Accountants of India. The deferred tax charge or credit is
 recognized, using current tax rates, for timing differences between
 book and tax profits that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred tax assets are
 recognized only when there is virtual certainty of realization of such
 assets in future. Such assets are reviewed at each balance sheet date
 to reassess realization.
 
 9) REDEMPTION PREMIUM ON FOREIGN CURRENCY CONVERTIBLE BONDS
 
 Premium payable on redemption of FCCB as per terms of issue is provided
 fully in the year of issue.
 
 10) IMPAIRMENT OF ASSETS
 
 An Asset is treated as impaired when its carrying cost exceeds its
 recoverable amount on the reporting date. An impairment loss is charged
 to the Profit & loss account in the year in which an asset is
 identified as impaired. The impairment loss recognized in prior periods
 is reversed if there has been a change in the estimate of recoverable
 amount. The recoverable amount is measured as the higher of the net
 selling price and the value in use determined by the present value of
 estimated future cash flows.
 
 11) 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 to accounts. Contingent assets are neither recognized nor
 disclosed in the financial statements.
 
 12) PROPOSED DIVIDEND:
 
 Dividend on Share Capital, if proposed by the Directors, is provided in
 the books.
 
 13) CASH & CASH EQUIVALENTS
 
 Cash and cash equivalents comprise cash and cash on deposit with banks.
 The Company considers all investments that are readily convertible to
 known amounts of cash to be cash equivalents.
 
 14) USE OF ESTIMATES
 
 The preparation of the financial statements in conformity with GAAP
 requires the Management to Make estimates and assumptions that the
 affect the reported balances of assets and Liabilities, disclosures
 relating to contingent liabilities as at the date of the financial
 statements and reported amounts of revenues and expenses for the year.
 Actual results could differ from these estimates. Any revision is
 recognized prospectively in current and future period.
 
 15) Cash Flow Statement
 
 Cash flows are reported using the indirect method, whereby profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and item of income or expenses associated with
 investing or financing cash flows. The cash flows from operating,
 investing and financing activities of the Company are segregated.