1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The Financial statements are prepared under the historical cost
 convention (except for certain fixed assets at Udhana, Coimbatore and
 Bangalore (SPM Division), which have been revalued) in accordance with
 the Companies (Accounting Standard) Rules, 2006 issued by the Central
 Government under the Companies Act, 1956, to the extent applicable, and
 in compliance with generally accepted accounting principles in India.
 
 2) USE OF ESTIMATES
 
 The preparation of financial statements requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, disclosure of contingent liabilities as at the date of
 the financial statements and reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from these
 estimates. Any revision to accounting estimates is recognized
 prospectively when revised.
 
 3) REVENUE RECOGNfTION
 
 A) Revenue from sale of goods:
 
 Revenue from sale of goods is recognized on transfer of all''significant
 risks and rewards of ownership to the buyer.
 
 B) Service Income:
 
 Income from annual maintenance services is recognized proportionately
 over the period of contract.
 
 C) Revenue from Works Contracts: ''
 
 Revenue from works contracts is recognized on Percentage of completion
 method.
 
 Percentage or stage of completion is determined by the proportion that
 contract cost incurred for work performed up to the reporting date
 bears to the estimated total costs of the contract.  -
 
 4) FIXED ASSETS
 
 Fixed Assets are stated at their original cost of acquisition including
 incidental expenses related to acquisition and installation except some
 land & buildings (excluding residential flats) and plants and
 machinery, which are adjusted on revaluation. The fixed assets
 manufactured by the company are stated at manufacturing cost or net
 realizable value whichever is lower, prevailing at the time of
 capitalization. Fixed assets are shown net of accumulated depreciation
 and amortization, wherever applicable.
 
 5) DEPRECIATION
 
 a) Depreciation on all assets of the Manufacturing Unit, excepting
 those of Tool Room, certain assets transferred from branches and the
 Wind Mill is provided under the Straight Line Method as under:
 
 i.  On assets added up to 01.04.1987 at the rates applicable at the
 time of acquisition of these assets in accordance with the Circular No.
 1 /86 dtd. 21.05.1986 of the Company Law Board.
 
 ii.  On assets added between 01.04.1987 to 15.12.1993, at the rates and
 in the manner specified in Schedule XIV of the Companies (Amendment)
 Act, 1988.
 
 iii.  On assets added after 15.12.1993, at the revised rates prescribed
 in Schedule XIV of the Companies (Amendment) Act, 1988 vide
 notification no. GSR 756 (E) dated 16.12.1993 in accordance with
 Circular 14/93, dated 20.12.1993.
 
 b) Depreciation on all other assets, assets of Tool Room and assets
 transferred to manufacturing unit from branches and assets of SPM
 Division has been provided under the Written Down Value method at the
 revised rates, prescribed in Schedule XIV of the Companies (Amendment)
 Act, 1988 vide notification no, GSR 756 (E) dated 16.12.1993 in
 accordance with Circular 14/93, dated 20.12.1993.
 
 c) Depreciation on additions to assets or on sale/disposal of assets is
 calculated pro-rata from the date of such addition or up to the date of
 such sale/disposal as the case may be.
 
 d) Depreciation on revalued assets is calculated on the replacement
 value at the rates considered applicable by the valuers and is charged
 to Profit and Loss account. In respect of revalued building of SPM, the
 difference between depreciation on replacement value and on written
 down value basis is drawn from revaluation reserve created on
 revaluation to the extent the balance in such reserve is available.
 
 6) 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.
 
 a) An impairment loss is recognized where the carrying amount of an
 asset exceeds its recoverable amount. The recoverable amount is the
 greater of the asset''s net selling price and value in use. In assessing
 value in use, the estimated future cash flows are discounted to their
 present value at weighted average cost of capital.
 
 b) After impairment, depreciation is provided in subsequent periods on
 the revised carrying amount of the asset over its remaining useful
 life.
 
 c) A previously recognized impairment loss is increased or reversed
 depending on changes in circumstances. However the carrying value in
 use after reversal is not increased beyond the carrying value that
 would have prevailed by charging usual depreciation if there was no
 impairment.
 
 7) INTANGIBLE ASSETS
 
 Cost of technical know-how incurred on technical drawings/designs/data
 for the manufacture of new products is capitalized on receipt of , such
 drawings/designs/data. The technical know-how is amortized from the
 year in which commercial production commences over its useful life
 determined by technical evaluation.
 
 8) INVESTMENTS
 
 Long-term investments are stated at cost including all expenses
 incidental to acquisition. Provision is made to recognize a decline,
 other than temporary in the value of long-term investments. Current
 investments are stated at lower of cost and fair value.
 
 9) VALUATION OF INVENTORIES
 
 a) Inventories comprising Raw Materials, Work in Progress, Finished
 Goods, Stores and Loose Tools, are valued at lower of cost or net
 realizable value.
 
 b) Incomplete job contracts are valued at the direct cost incurred on
 such contracts.
 
 10) EMPLOYEE BENEFrTS
 
 a) Defined Contribution Plans
 
 The company has defined contribution plans for post employment benefits
 in the form of Superannuation Fund for Managers/Officers which is
 administered by Life Insurance Corporation of India (LIC), Provident
 Fund for employees at manufacturing facility administered by Regional
 Provident Fund Authorities, besides ESIC and Labor Welfare Fund. The
 company''s contributions to Defined Contribution Plans are charged to
 Profit and Loss Account as and when incurred and the company has no
 further obligation beyond making the contributions.
 
 b) Defined Benefits Plans
 
 i. The company''s liabilities towards gratuity, leave encashment and
 compensated absence are determined and provided on the basis of
 actuarial valuation, as at the Balance Sheet date, carried out by an
 independent actuary. The actuarial method for measuring the liability
 is the Projected Unit Credit Method.
 
 ii. In respect of employees at the head office and branch, provident
 fund contributions are made to a trust administered by trustees.  The
 interest payable by the trust to the members shall not be lower than
 the statutory rate declared by the Central Government and shortfall, if
 any, shall be made good by the Company.
 
 iii. Other short term employee benefits are recognized as an expense at
 the undiscounted amount in the Profit and Loss Account of the year in
 which the related service is rendered.
 
 iv. Actuarial gains and losses are immediately recognized in the Profit
 and Loss Account of the year without resorting to any
 amortization/deferment.
 
 v.  Termination benefits are immediately recognized as an expense in
 Profit and Loss account, as and when incurred.
 
 11) PROVISIONS AND CONTINGENT LIABILITIES
 
 Provision is recognized 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. Provisions are not discounted to their present
 value and are determined based on best estimate required to settle the
 obligation at the balance sheet date. These are reviewed at each
 balance sheet date and adjusted to reflect the current estimates.
 Contingent liabilities are disclosed where there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources.
 
 12) FOREIGN CURRENCY TRANSACTIONS
 
 a) Foreign currency transactions are recorded on initial recognition at
 the exchange rate in force on the date of the transaction.  Exchange
 differences arising on settlement of monetary items (cash, receivables,
 payables etc.) are recognized in profit and loss account in the period
 in which they arise.
 
 b) Foreign currency monetary items are reported at exchange rates
 prevailing at the end of the accounting period and the gains/losses are
 recognized in the profit and loss account.
 
 c) The premium or discount arising at the inception of forward exchange
 contracts is amortized as an expense or an income over the life of the
 contract.   
 
 13) EXPENSES ON ISSUE AND PREMIUM ON REDEMPTION OF SECURITIES
 
 Expenses on issue of shares and debentures and premium on redemption of
 debentures are charged to Securities Premium Account.
 
 14) TAXES ON INCOME:
 
 Current tax is determined as the amount of tax payable in respect of
 estimated taxable income for the year. Deferred tax is recognized,
 subject to the consideration of prudence as per Accounting Standard-22
 (Accounting for taxes on income) on timing differences, being the
 difference between taxable income and accounting income that originate
 in one period and are capable of reversal in one or more subsequent
 periods. Where there are unabsorbed depreciation or carry forward
 losses, deferred tax assets are recognized only to the extent that
 there is timing difference the reversal of which will result in
 sufficient income. Other deferred tax assets are recognized only to the
 extent there is reasonable certainty of realization in future.