A.  Basis of Accounting
 
 The financial statements are prepared under the historical cost
 convention in accordance with Generally Accepted Accounting Principles
 in India,the Accounting Standards issued under the Companies
 (Accounting Standards) Rules 2006 and the relevant provisions of the
 Companies Act, 1956 as adopted consistently by the company. Revenues
 are recognised and expenses are accounted on their accrual, including
 provisions / adjustment for committed obligations and amounts
 determined as payable or receivable during the year.
 
 Use of Estimates
 
 The preparation of the financial statements in conformity with Indian
 GAAP requires that the management makes 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
 the reported amounts of revenue and expenses during the reported
 period. The actual results may differ from these estimates.
 
 B.  Revenue Recognition
 
 Sale of goods and services is recognised on despatch to customers or
 when the service has been provided. Income from turnkey projects is
 recognised on the Gross Billing exclusive of applicable sales/service
 taxes and based on work certified. Interests on deposits are recognised
 on time proportion basis taking into account the amount of deposit and
 interest. Export incentives such as DEPB benefits are recognized on
 exports of goods.
 
 C.  Fixed Assets and Intangibles
 
 Fixed assets are stated at cost of acquisition inclusive of freight,
 duties, taxes and interest on borrowed capital allocated to and
 utilized for fixed assets upto the date of capitalization and other
 direct expenditure incurred on ongoing projects. Assets acquired on
 hire purchase are capitalised at gross value and interest thereon is
 charged to revenue.
 
 Cost incurred on self generated intangibles which are separately
 identifiable are amortised over the useful life of the asset.
 
 Borrowing costs directly attributable to the acquisition, construction
 and production of qualifying assets are capitalised till the month in
 which the asset is ready for its intended use. Other borrowing costs
 are recognised as expenses in the period in which these are incurred.
 
 D . Depreciation
 
 Depreciation on fixed assets is provided under the straight line method
 in accordance with Schedule XIV of the Companies Act, 1956 at the rates
 specified therein, with the exception to the following:
 
 a) Technical Know how is depreciated at the rate applicable under the
 provisions of Income Tax Act., 1961.
 
 b) Non compete fees is depreciated @20% under the Straight Line Method.
 
 c) Vehicles Purchased are written off over the period of three years.
 
 d) Computer and accessories purchased are written off over a period of
 three years.
 
 e) Electrical Installations installed on or after lsl April 2005 are
 written off @12.5%.
 
 f) Intangible Assets -Product development is depreciated over ther
 lease period.
 
 g) Fixed Furniture in leasehold Property is depreciated over the lease
 period.
 
 h) SAP implementation cost is depreciated @ 16.21% under the Straight
 Line Method.
 
 E.  Inventories
 
 a) Inventories other than tools are valued at lower of cost or net
 realisable value. Cost of inventories comprise all costs of purchase,
 costs of conversion and other costs incurred in bringing the
 inventories to their present locations and condition. Cost is
 determined on weighted average basis.
 
 b) Tools are written off at cost less amortization. Amortizations of
 tools are made based on technical evaluation.
 
 F.  Foreign Currency Transactions
 
 Transactions in foreign exchange are initially recognised at the rates
 prevailing on the date of transaction. Premium or discount arising at
 the inception of forward contract is amortized as income or expenses
 over the life of the contract. Exchange difference on such contracts is
 recognized in the reporting period in which the exchange rate changes.
 
 All monetary assets and liabilities are restated at the balance sheet
 date using year end rates.  Resultant exchange difference is recognized
 as income or expenses in that period.
 
 G.  Employee Benefits
 
 The company''s contributions to provident fund, a defined contribution
 scheme is charged to profit & loss account on accrual basis.
 
 Liability for gratuity is funded with Life Insurance Corporation of
 India (LIC). Gratuity expense for the year has been accounted based on
 actuarial valuation determined under the projected credit unit method,
 carried out at the end of financial year. Actuarial gains/losses are
 recognised in full in the profit and loss account. The retirement
 benefit obligation recognised in the balance sheet represents the
 present value of defined benefit obligations adjusted for unrecognized
 past service cost and as reduced by the fair value of scheme assets.
 Any asset resulting from this calculation is limited to past service
 cost plus the present value of available refunds and reduction in
 future combinations to the scheme.
 
 Superannuation Liabilities have been covered by Master Policies of Life
 Insurance Corporation of India under irrevocable trust. Annual premium
 on accrual basis are charged to profit & loss account.
 
 Liability for encashment of leave considered to be long term liability
 is accounted for on the basis of an actuarial valuation as per revised
 AS-15. Provision for outstanding leave credits considered as short term
 liability is as estimated by the management. Other short term employee
 benefits like medical, leave travel etc are accrued based on the terms
 of employment on time proportion basis.
 
 H.  Investments
 
 Long term investments are stated at cost less diminution in the value
 of investments that is other than temporary. Current Investments are
 carried at lower of cost and fair value. Overseas investments are
 converted on the date of transaction.
 
 I.  Expenditure
 
 Revenue expenditure with the exception of Development expenditure is
 charged as an expense in the year in which it is incurred. Capital
 Expenditure is included in fixed assets and depreciated at applicable
 rate.
 
 Expenditure incurred towards selling expenses, is accounted as
 expenditure in proportion to the sale income recognised.
 
 Expenditure incurred towards opening of Bank Guarantee in relation to
 turnkey project activities and others are written-off over the period
 of the bank guarantee.
 
 J.  Warranty Claims and Liquidated Damages
 
 Future liability towards warranty claims are estimated and provided
 for. Liquidated damages are recognised in the books of accounts at the
 time of dispatch.
 
 K.  Taxes on Income
 
 Current taxes is determined as the amount payable in respect of taxable
 income for the period. Deferred tax is recognised subject to the
 consideration of prudence, on timing differences, being the difference
 between taxable income and accounting income that originate in one
 period and is capable of reversal of in one or more subsequent periods.
 
 MAT Credit is recognized as an asset only when and to the extent there
 is a convincing evidence that the Company will pay normal income-tax
 during the specified period. In the year in which the Minimum Alternate
 Tax (MAT) credit becomes eligible to be recongnized as an asset in
 accordance with the recommendations contained in Guidance Note issued
 by the Institute of Chartered Accountants of India, the said asset is
 created by way of a credit to the profit and loss account and shown as
 a MAT Credit Entitlement.
 
 L.  Customs and Excise duty
 
 Excise duty on finished goods stock lying at the factory is accounted
 at the point of manufacture.  Customs Duty on imported material lying
 in bonded warehouse is accounted for at the time of bonding of
 materials.
 
 M. Cash Flow Statement
 
 Cash flow statement has been prepared in accordance with the indirect
 method prescribed in Accounting Standard 3, issued by Companies
 (Accounting Standards) Rules 200(5.
 
 N.  Provisions and Contingencies
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event.  It is probable that an outflow of resources
 will be required to settle obligation, in respect of which a reliable
 estimate can be made. Provisions are not discounted to its 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 best estimates.
 Contingent liabilities are not provided but disclosed in the notes to
 financial statements.
 
 O.  Impairment of Fixed Assets
 
 The carrying amount of fixed asset is reviewed at each balance sheet
 date to determine whether there is any indication of impairment. If any
 indication exists, the recoverable amount is estimated.  An impairment
 loss is recognized whenever carrying amount exceeds the recoverable
 amount.
 
 P.  Earnings Per Share
 
 The company reports basic and diluted earnings per share (EPS) in
 accordance with Accounting Standard 20 on Earnings Per Share. Basic
 EPS is computed by dividing the net profit or loss for the year
 attributable to equity share holders by the weighted average number of
 equity shares outstanding during the year. Diluted EPS is computed by
 dividing the net profit or loss for the year attributable to equity
 share holders by the weighted average number of equity shares
 outstanding during the year as adjusted for the effects of all dilutive
 potential equity shares, except where the results are anti dilutive.