1.  Contingent Liabilities not provided for in the Accounts:
 
 a) Letters of credit opened by Bank for purchase of raw materials and
 components Rs.53,08,55,861 (Rs.29,13,13,542).
 
 b) Bills discounted with bank Rs.5,16,40,097 (Rs.1,02,22,125).
 
 c) Counter Guarantee given to bankers in respect of Guarantees given by
 them Rs.130,20,00,891 (Rs. 112,07,29,906).
 
 d) Bonds executed in favour of President of India for import of
 material at concessional rate of duty Rs.49,97,725 (Rs.78,68,647).
 
 e) Estimated amount of Capital commitment on account of Fixed Assets
 (Net of advances) amount to Rs. 18,09,50,768 (Nil).
 
 f) In respect of sales effected under CST towards submission of C-Forms
 Rs.25,55,68,000 (Rs. 12,34,90,668).
 
 g) Disputed amounts of income tax
 
 Assessment year Disputed amount of Income tax
 
 2001-02 Rs.30,02,382
 
 2003-04 Rs.47,85,258
 
 2004-05 Rs.26,12,561
 
 2005-06 Rs.70,28,103
 
 2006-07 Rs.55,41,946
 
 2008-09 Rs.3,06,33,157
 
 h) Disputed amount of Sales Tax, Karnataka of Rs.63,64,825 for the
 financial year 2007-08
 
 2.  Confirmation of balance has not been obtained from some of the
 creditors, debtors and to certain parties to whom the company has given
 advances.
 
 3.  Foreign Currency Convertible Bonds
 
 a) During the year 2007-08 the company raised funds through issue of
 Zero Coupon Foreign currency Convertible Bond aggregating to USD35
 million (Rs. 13,846 lakhs) with an option to the investor to convert
 die FCCBs into equity shares of the company at an initial conversion
 price of Rs.400 per share at a fixed rate of exchange on conversion
 Rs.39.45 =USD 1, at any time after December 5, 2007 and prior to
 November 28, 2012 and 34, 51,875 shares would be issuable on November
 28.2012.
 
 b) During the previous year, the company has bought back and cancelled
 310 Nos of 5 years FCCB of the face value of USD 1,00,000 each, as per
 the notification of Reserve Bank of India, at a discount to the face
 value.  Consequent to this the company is absolved of its liability
 towards the bond holders whose bonds are cancelled.
 
 c) Unless previously converted, redeemed, repurchased and cancelled,
 the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of
 their principal amount. The amount of premium on such redemption will
 be to the tune of Rs.674 lakhs. Out of the aforesaid FCCBs, there were
 no FCCBs converted to equity shares as at the year end. The FCCBs
 pending conversion as at the year end aggregating to Rs. 1,582 lakhs
 (without considering exchange fluctuation) are grouped under Unsecured
 Loans.
 
 4.  The Company issued 20,00,000 share warrants of Rs.2 each @ Rs.
 133.76 per warrant to the promotors against which initial deposit of
 Rs.6,68,80,000 has been received during die year.
 
 5.  Employee Stock Option Scheme
 
 During 2009 2010, the Company established the Easun Reyrolle Employee
 Stock Option Plan 2009 under which 10,00,000 options have been
 allocated for being granted to the employees and non-promoter
 Directors. The Company has obtained in-princi pie approval from both
 National Stock Exchange of India Limited, Mumbai (NSE) and Bombay Stock
 Exchange Limited, Mumbai (BSE) for listing up to a maximum of 10,00,000
 shares pursuant to exercise of options granted under the Scheme. Each
 option comprises one underlying Equity Share of Rs.10/- each. This
 Scheme has been formulated in accordance with the Securities and
 Exchange Board of India (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999. As per die Scheme, die
 Compensation Committee grants options to senior employees and
 non-promoter Directors. . The options are granted at a price, which
 shall not be less than the par value of equity share of the Company and
 shall not be more than the Market price as defined in the Guidelines.
 
 During the financial year 2010-11 the Compensation Committee has
 granted 1,97,245 options to its senior employees and non-promoter
 directors. The options granted vest over a period of 1 to 2 years; and
 can be exercised over a maximum period of 6 months from the date of
 vesting.
 
 The difference between the market price of the share underlying the
 options granted on the date of grant and the exercise price of the
 option are expensed over die vesting period as per the SEBI guidelines.
 The net impact of the movement in option granted during die period
 resulted in a charge of Rs.24,40,907 (Previous Year NIL) to the Profit
 & Loss Account during the year.
 
 Method Used for Accounting for Share Based Payment Plan:
 
 The Company has used Intrinsic Value Method to account for the
 compensation cost of stock option to employees of the Company.
 Intrinsic Value is the amount by which the quoted market price of the
 underlying share exceeds the exercise price of the option.
 
 6.  The company has incurred expenditure aggregating to Rs.2,23,65,902
 during the year (Rs. 1,68,83,843) on development of products. The
 expenditure has been capitalised and carried in the financial
 statements under the head Intangible Asset Product Development as on
 31s'' March 2011. Based on the process of establishing the technical and
 economic feasibility of the product, the management is confident that
 the products developed would be commercially viable and there is no
 uncertainty regarding the establishment of feasibility of the product.
 Management believes that the expenditure capitalized is in the nature
 of development costs and could be capitalized as per AS-26 Intangible
 Assets.
 
 7.  In respect of company''s operations which includes execution of the
 turnkey projects. These turnkey projects significantly involve supply
 of equi pment dealt with by the company in the ordinary course of
 operations. The activities that are additionally carried out while
 executing the turnkey projects are in the nature of civil construction
 and erection services which are significantly less when compared with
 the overall project value. No information is furnished in terms of
 segment reporting in as much the project execution essentially involves
 supply of Transmission and Distribution equipment manufactured by the
 company carrying similar risks and rewards which are not different from
 main products.
 
 8.  Personnel expenses and other expenses are net off recovery of
 overheads from direct and indirect overseas subsidiaries amounting to
 Rs.3,27,17,105 (Rs.2,47,67,949) and net off product development
 expenses Rs.2,23,65,902 (Rs.1,68,83,843).
 
 9.  Expenditure incurred on account of borrowing costs amounting to
 Rs.2,63,79,207 (Rs.46,863) is capitalized towards new projects and
 disclosed under Capital Work-in Progress.
 
 10.  AS-15, Employee Benefits
 
 a.  Defined Benefit Plan: Gratuity (Funded)
 
 In accordance with applicable laws, the company provides for gratuity,
 a defined benefit retirement plan (Gratuity Plan) covering all
 permanent employees. The gratuity plan provides for, at retirement or
 termination of employment, an amount based on the respective employees
 last drawn salary and the years of employment with the company. The
 company provides the gratuity benefit through annual contributions to a
 gratuity trust which in turn mainly contributes to Life Insurance
 Corporation of India (LIC) for this purpose. Under this plan the
 settlement obligation remains with the gratuity trust. Life Insurance
 Corporation of India administers the plan and determines me
 contribution premium required to be paid by the trust.
 
 Leave Encashment Liability (Unfunded)
 
 In accordance with applicable rules, the liability for leave encashment
 was actuarially valued and provided in me books of accounts, covering
 permanent employees.
 
 Detailed Annexure A enclosed
 
 b.  Defined Contribution Plan Provident Fund
 
 All employees are entided to provident fund benefits. For all
 categories of employees the company makes contributions to Regional
 Provident Fund commissioners as per law.
 
 11.  The company has been sanctioned to avail interest free sales tax
 deferral scheme for an aggregate amount of Rs.74,53,000 by the
 department of Sales tax, Government of Tamilnadu. The underlying
 deferred sales tax payable by the company from the financial year
 commencing from 2013-14.
 
 12.  The company is engaged in power transmission and distribution
 segment and the same is being reported.
 
 13. Operating lease
 
 The Company has entered into operating lease arrangements for its
 office facilities. These leases are for a period ranging from 1 to 5
 years with an option to die Company for renewing at the end of the
 initial term. Rental expenses for operating leases included in die
 income statement for die year is Rs.88,06,256 (Rs.64,55,350).
 
 14. Income Tax
 
 The Company has recognized Rs.82,59,877 as on 31st March 2011 as
 Minimum Alternate Tax (MAT) credit entitlement (previous year Nil),
 which represents the portion of MAT Liability, the credit of which
 would be available based on the provisions of Section 115JAA of the
 Income Tax Act, 1961. The management based on the future profitability
 projections and also profit earned during the year is confident that
 there would be sufficient taxable profit in future which will enable
 the Company to utilize the above MAT credit entitlement.
 
 14.  Previous year''s fiqures have been regrouped wherever necessary to
 conform to current year''s classifications. Previous year''s figures are
 shown in brackets.
 
 15.  Figures have been rounded off to the nearest rupee.