1.  Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention, on an accrual basis, in accordance with the generally
 accepted accounting principles in India including the Accounting
 Standards notified by the Government of India / issued by the Institute
 of Chartered Accountants of India (ICAI), as applicable, and the
 relevant provisions of the Companies Act, 1956.
 
 2.  Use of Estimates
 
 The preparation of the financial statements requires the Management to
 make estimates and assumptions considered in the reported amounts of
 assets and liabilities (including contingent liabilities) as of the
 date of the financial statements and the reported income and expenses
 like provision for employee benefits, provision for doubtful
 debts/advances/contingencies, provision for warranties, allowance for
 slow/non-moving inventories, useful lives of fixed assets, provision
 for retrospective price increases on purchases, provision for taxation,
 etc., during the reporting period. Management believes that the
 estimates used in the preparation of the financial statements are
 prudent and reasonable. Future results may vary from these estimates.
 
 3.  Fixed Assets and Depreciation
 
 Fixed Assets are stated at historical cost less accumulated
 depreciation. Cost includes related taxes, duties, freight, insurance,
 etc. attributable to the acquisition and installation of the fixed
 assets but excludes duties and taxes that are recoverable from tax
 authorities.
 
 Borrowing costs are capitalised as part of qualifying fixed assets.
 Other borrowing costs are expensed.
 
 The Company also has a system of providing additional depreciation,
 where, in the opinion of the Management, the recovery of the fixed
 asset is likely to be affected by the variation in demand and/or its
 condition/usability.  Depreciation is provided pro-rata from the month
 of Capitalisation.
 
 Individual fixed assets whose actual cost does not exceed Rs.5,000/- are
 fully depreciated in the year of acquisition.
 
 4.  Investments
 
 a.  Long term investments are carried at cost. Diminution in the value
 of investments, other than temporary, is provided for.
 
 b.  Current investments are carried at lower of cost and fair value.
 
 5.  Inventories
 
 a.  Raw materials, stores & spare parts and traded goods are valued at
 lower of weighted average cost (net of allowances) and estimated net
 realisable value.  Cost includes freight, taxes and duties and is net
 of credit under VAT and CENVAT scheme, where applicable.
 
 b.  Work-in-process and finished goods are valued at lower of weighted
 average cost (net of allowances) and estimated net realisable value.
 Cost includes all direct costs and applicable production overheads to
 bring the goods to the present location and condition.
 
 c.  Due allowance is made for slow/ non-moving items, based on
 Management estimates.
 
 6.  Revenue Recognition
 
 a.  Sales are recognised on shipment or on unconditional appropriation
 of goods and comprise amounts invoiced for the goods, including excise
 duty, but net of sales tax / VAT and Quantity Discounts.
 
 b.  Export benefits are accounted for in the year of exports based on
 eligibility and when there is no uncertainty in receiving the same.
 
 c.  Dividend income on investments is accounted for when the right to
 receive the payment is established.
 
 d.  Interest Income is recognised on time proportion basis.
 
 7. Employee Benefits
 
 I.  Defined Contribution Plan
 
 a.  Superannuation
 
 The Company contributes a sum equivalent to 15% of the eligible
 employees salary to a Superannuation Fund administered by trustees and
 managed by Life Insurance Corporation of India (LIC). The Company has
 no liability for future Superannuation Fund benefits other than its
 annual contribution and recognizes such contributions as an expense in
 the year incurred.
 
 II.  Defined Benefit Plan
 
 a.  Gratuity
 
 The Company makes annual contributions to a Gratuity Fund administered
 by trustees and managed by LIC. The Company accounts its liability for
 future gratuity benefits based on actuarial valuation, as at the
 Balance Sheet date, determined every year by LIC using the Projected
 Unit Credit method. Actuarial gains/losses are immediately recognised
 in the Profit & Loss Account.
 
 b.  Provident Fund
 
 Contributions are made to the Companys Employees Provident Fund Trust
 in accordance with the fund rules. The interest rate payable by the
 Trust to the beneficiaries every year is being notified by the
 Government. The Company has an obligation to make good the shortfall,
 if any, between the return from the investments of the Trust and the
 notified interest rate and recognizes such obligation as an expense.
 
 III.  Long Term Compensated Absences
 
 The liability for long term compensated absences carried forward on the
 Balance Sheet date is provided for based on an actuarial valuation
 using the Projected Unit Credit method, as at the Balance Sheet date,
 carried out by LIC.
 
 IV. Short Term Employee Benefits
 
 Short term employee benefits includes short term compensated absences
 which is recognized based on the eligible leave at credit on the
 Balance Sheet date, and the estimated cost is based on the terms of the
 employment contract.
 
 V.  Voluntary Retirement Scheme
 
 Compensation to employees under Voluntary Retirement Schemes is
 provided/expensed in the period in which the liability arises.
 
 8.  Deferred Compensation Cost
 
 In respect of stock options, granted pursuant to the Companys Employee
 Stock Option Scheme, the Company determines the compensated cost based
 on the intrinsic value method and the compensation cost is amortised on
 a straight line basis over the vesting period.
 
 9.  Operating Leases
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased assets are classified as
 operating leases. Operating lease payments are recognised as an expense
 in the revenue account as per the lease terms.
 
 10.  Foreign Currency Transactions
 
 Foreign Currency Transactions are accounted at the exchange rates
 ruling on the date of the transactions.  Foreign currency monetary
 items as at the Balance Sheet date are restated at the closing exchange
 rates. Exchange differences arising on actual payments/realisations and
 year-end restatements are dealt with in the profit and loss account.
 
 The Company enters into forward exchange contracts and other
 instruments that are in substance a forward exchange contract to hedge
 its risks associated with foreign currency fluctuations. The premium or
 discount arising at the inception of a forward exchange contract (other
 than for a firm commitment or a highly probable forecast transaction)
 or similar instrument is amortised as expense or income over the life
 of the contract.  Exchange differences on such a contract are
 recognised in the Profit & Loss Account in the year in which the
 exchange rates change. Any profit or loss arising on cancellation of
 such a contract is recognised as income or expense for the year.
 
 11.  Derivative Instruments and Hedge Accounting
 
 The Company uses forward contracts to hedge its risks associated with
 foreign currency fluctuations relating to certain firm commitments and
 forecasted transactions.  The Company designates these as cash flow
 hedges.
 
 The use of forward contracts is governed by the Companys policies on
 the use of such financial derivatives consistent with the Companys
 risk management strategy.  The Company does not use derivative
 financial instruments for speculative purposes.
 
 Forward contract derivative instruments are initially measured at fair
 value, and are re-measured at subsequent reporting dates. Changes in
 the fair value of these derivatives that are designated and effective
 as hedges of future cash flows are recognised directly in “Hedge
 Reserve Account under Shareholders Funds and the ineffective portion
 is recognized immediately in the Profit & Loss Account.
 
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognized in the Profit & Loss
 Account as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. If any of these events occur or if a hedged transaction is
 no longer expected to occur, the net cumulative gain or loss recognised
 under shareholders funds is transferred to the Profit & Loss Account
 for the year.
 
 12.  Research and Development
 
 Revenue expenditure on research and development is expensed when
 incurred. Capital expenditure on research and development is
 capitalised under fixed assets and depreciated in accordance with Item
 3 above.
 
 13.  Taxes on Income
 
 Current tax is the amount of tax payable on the taxable income for the
 year and is determined in accordance with the provisions of the Income
 Tax Act, 1961.
 
 Deferred tax is recognised on timing differences, being the differences
 between taxable income and accounting income that originate in one
 period and are capable of reversal in one or more subsequent periods.
 
 Deferred tax assets in respect of unabsorbed depreciation and carry
 forward of losses are recognised if there is virtual certainty that
 there will be sufficient future taxable income available to realise
 such losses. Other deferred tax assets are recognised if there is
 reasonable certainty that there will be sufficient future taxable
 income available to realise such assets.
 
 14.  Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions are recognised only when there is a present obligation as a
 result of past events and when a reliable estimate of the amount of
 obligation can be made.  Contingent liability is disclosed for (i)
 Possible obligation which will be confirmed only by future events not
 wholly within the control of the Company or (ii) Present obligations
 arising from past events where it is not probable that an outflow of
 resources will be required to settle the obligation or a reliable
 estimate of the amount of the obligation cannot be made. Contingent
 assets are not recognised in the financial statements since this may
 result in the recognition of income that may never be realised.
 
 15.  Segment Accounting
 
 a.  The generally accepted accounting principles used in the
 preparation of the financial statements are applied to record revenue
 and expenditure in individual segments.
 
 b.  Segment revenue and segment results include transfers between
 business segments. Such transfers are accounted for at a competitive
 market price and are eliminated in the consolidation of the segments.
 
 c.  Expenses that are directly identifiable to segments are considered
 for determining the segment results.  Expenses which relate to the
 Company as a whole and are not allocable to segments are included under
 unallocated corporate expenses.
 
 d.  Segments assets and liabilities include those directly identifiable
 with the respective segments. Unallocated corporate assets and
 liabilities represent the assets and liabilities that relate to the
 Company as a whole and are not allocable to any segment.
 
 16.  Impairment of Assets
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 to determine whether there is any indication of impairment of the
 carrying amount of the Companys assets. If any indication exists, an
 assets recoverable amount is estimated. An impairment loss is
 recognised whenever the carrying amount of the asset exceeds the
 recoverable amount.