a) Basis of Accounting:
 
 The financial statements have been prepared and presented on going
 concern basis and on accrual basis of accounting under the historical
 cost convention and comply with the accounting standards referred to in
 Sub-Section (3C) of Section 211 of the Companies Act, 1956.
 
 b) Fixed assets and depreciation:
 
 i) Fixed assets are stated at cost of acquisition or construction,
 including any cost attributable for bringing the asset to its working
 condition for its intended use.
 
 ii) The Company provides depreciation on Factory Building, Workshop
 Machinery and Assets given on lease, on straight line basis, and on
 other fixed assets on the written down value basis. The rates of
 depreciation prescribed in Schedule XIV to the Companies Act, 1956 are
 considered as the minimum rates. If managements estimate of the useful
 life of the fixed asset is shorter than that envisaged in Schedule XIV,
 depreciation is provided at a higher rate based on managements
 estimate of the useful life. Pursuant to the policy, depreciation on
 Assets given on lease is provided on a straight line basis over their
 estimated useful life of 4 years.  
 
 Goodwill and Designs and Drawings are amortised on a straight line
 basis over their estimated useful life of 10 years.
 
 Leasehold land is amortised over the period of the lease of 95 years.
 
 c) Investments:
 
 Investments that are readily realisable and intended to be held for not
 more than one yearfrom the date on which such investment is made are
 classified as current investments. Current investments are carried at
 lower of cost and fair value. Cost includes related expenses such as
 commission, fees and duties.  .
 
 d) Inventories:
 
 Inventories include stores and spares, raw materials, bought out and
 manufacured components, work in progress and manufactured and traded
 finished goods. Inventories are valued at cost or net realisable value,
 whichever is lower. Cost is arrived at on the weighted average basis
 and includes, where appropriate, labour, manufacturing overheads and
 excise duty.
 
 e) Foreign currency transactions:
 
 Foreign currency transactions are recorded in the books of the Company
 at standard exchange rates fixed on the basis of a review of the actual
 exchange rates. The difference between the actual rate of settlement
 and the standard rate is charged or credited to the Profit and Loss
 Account.
 
 The premium or the discount arising at the inception of forward
 exchange contracts related to underlying receivables and payables are
 amortised as expense or income over the period of the contracts. With
 respect to forward exchange contracts, entered into against highly
 probable future transactions or firm commitments, mark to market loss,
 if any, is recognised as at the Balance sheet date in view of the
 principle of prudence enunciated in AS-1.
 
 Foreign currency monetary assets and monetary liabilities outstanding
 at year-end are translated at the year end exchange rate and the
 unrealised exchange gain or loss is recognised in the Profit and Loss
 Account.
 
 f) Revenue recognition:
 
 Revenue from sale of products is recognised on transfer of all
 significant risks and rewardsof ownership to the buyer.
 
 Income from services is recognised when the services are rendered.
 
 Indent commission income is recognised based on terms of arrangements
 with parties.
 
 Dividend income is recognised when the right to receive dividend is
 unconditional at the Balance Sheet date.
 
 Interest is recognised using the time proportion method basis.
 
 Revenues from rental of equipment are recognized on a straight line
 basis over the lease period.
 
 Accounting of Construction Contracts: Revenue for fixed price
 construction contracts is recognised on percentage of completion
 method. The stage of completion is determined with reference to the
 costs incurred on the contracts and their estimated total costs
 ascertained based on technical and other estimates.  Provisions
 forforeseeable loss on contracts in progress are made fully.  Amounts
 due from customers for contract work is the net of the amount of:
 
 a) Cost incurred plus recognised profits; less
 
 b) The sum of recognized losses and progress billings, for all
 contracts in progress for which cost incurred plus recognized profits
 (less recognized losses) exceed progress billings.
 
 Amounts due to customers for contract work is the net of the amount of:
 
 a) The sum of recognized losses and progress billings; less
 
 b) cost incurred plus recognized profits, for all contracts in progress
 for which progress billings exceed costs incurred plus recognized
 profits (less recognized losses)
 
 g) Employee benefits:
 
 Post employment benefits (defined benefit/contribution plans)
 
 The employees gratuity scheme is a defined benefit plan. The Company
 has taken Group Gratuity Policies with the Life Insurance Corporation
 of India (IIC) forfuture payment of gratuities. The present value of
 the obligation under such defined benefit plan is determined during the
 year based on an actuarial valuation carried out by an independent
 actuary using the projected unit credit method. Actuarial gains and
 losses and past service costs are recognised immediately in the Profit
 and Loss Account.
 
 Contributions to Provident Fund are accrued as per the provisions of
 the Employees Provident Funds and Miscellaneous Provisions Act, 1952
 and charged to the Profit and Loss Account. The Company pays
 contribution to a Government Provident Fund in respect of the Nashik
 and Hyderabad units. As regards, the Pune unit, the contributions are
 made to a Recognized Fund.  The guidance on implementing AS 15,
 Employee Benefits (Revised 2005) issued by the Accounting Standards
 Board (ASB) states that provident funds set up by the employers,
 which requires interest shortfall to be met by the employer, needs to
 be treated as defined benefit plan. Pending the issuance of the
 guidance note from the Actuarial Society of India, the Companys
 actuary has expressed his inability to reliably measure the provident
 fund liability. Accordingly, the Company is unable to exhibit the
 related disclosures.
 
 Contributions to the provident fund and Superannuation Fund which are
 defined contribution schemes, are recognised as an .  expense in the
 Profit and Loss Account in the period in which the contribution is due.
 
 Long term employee benefits
 
 Long term employee benefits comprise compensated absences / leave
 encashment. These are measured based on an actuarial valuation carried
 out by an independent actuary using the projected unit method during
 the year. Actuarial gains and losses and past service costs are
 recognised immediately in the Profit and Loss Account.
 
 h) Taxation:
 
 Tax expense for the year (current tax and deferred tax) is included in
 the determination of the net profit for the year.
 
 The deferred tax charge or credit and the corresponding deferred tax
 liabilities or assets are recognized using the tax rates that have been
 enacted or substantially enacted by the Balance Sheet date.
 
 i) Lease:
 
 Leases under which the Company assumes substantially all the risks and
 rewards of ownership are classified as Finance Lease.  Such assets are
 capitalised at the fair value of assets or present value of the minimum
 lease payments at the inception of the lease whichever is lower.
 
 Lease payments under operating leases are recognized as an expense in
 the statement of Profit and Loss.  j) Warranty:
 
 Provision for warranty is made based on past experience.
 
 k) Provisions:
 
 A provision is recognised when there is a present obligation as a
 result of past event and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made. These are reviewed at each Balance Sheet
 date and adjusted to reflect the current best estimate.