1.  BASIS OF PREPARATION
 
 The Company maintains its accounts on accrual basis following the
 historical cost convention in accordance with generally accepted
 accounting principles [GAAP''] except for the revaluation of certain
 fixed assets, in compliance with the provisions of the Companies Act,
 1956 and the Accounting Standards as specified in the Companies
 (Accounting Standards) Rules, 2006, prescribed by the Central
 Government. However, certain escalation and other claims, which are not
 ascertainable/acknowledged by customers, are not taken into account.
 
 The preparation of financial statements in conformity with GAAP
 requires that the management of the Company makes estimates and
 assumptions that affect the reported amounts of income and expenses of
 the periods, the reported balances of assets and liabilities and the
 disclosures relating to contingent liabilities as of the date of the
 financial statements. Examples of such estimates include the useful
 life of tangible and intangible fixed assets, provision for doubtful
 debts/advances, future obligations in respect of retirement benefit
 plans, etc. Difference, if any, between the actual results and
 estimates is recognized in the periods in which the results are known.
 
 
 (ii) Rights preferences and restrictions attached to equity shares :
 
 The company has only one class of Equity Shares having a par value of Rs
 2/- per share. Each shareholder is eligible for one vote per share
 held. The dividend proposed by the Board of Directors is subject to the
 approval of the shareholders in the ensuing Annual General Meeting,
 except in case of interim dividend.
 
 In the event of liquidation, the equity shareholders are eligible to
 receive the remaining assets of the Company after distribution of all
 preferential amounts, in proportion to their shareholding.
 
 (a) Nature of Securities
 
 i) Term Loans [(a) above] obtained from Bank of Baroda, Axis Bank Ltd.,
 ICICI Bank Ltd., Citi Bank N.A., Vijaya Bank, Inducing Bank Limited &
 DBS Bank Limited is secured by exclusive charge by way of Hypothecation
 on specific assets for which payments were made out of the term loan.
 
 (ii) Corporate Loans [(b) above] granted by Consortium of Banks
 consisting of State Bank of India (As Lead Bank), Bank of Baroda, Exim
 Bank and Axis Bank Ltd. are secured by an equitable mortgage on the
 immovable properties and hypothecation of movable plant and machinery
 and assets of the Company''s Materials Handling Equipment Division and
 Gear Division excluding certain assets specifically/ exclusively
 charged to other banks/ financial institutions but including the whole
 of the Company''s Currents Assets, Inventories, Receivables and Book
 Debts ranking pari passu inter se in respect of working capital
 facilities and guarantees issued by them in favour of various clients
 of the Company.
 
 (iii) Capital assets acquired on HP Loans from Banks [(c) above] are
 secured by exclusive charge on respective assets purchased through
 those loans.
 
 (i) Nature of Securities {(a) Loans repayable on demand}
 
 Working Capital Loans from banks (secured) granted by Consortium of
 Banks consisting of State Bank of India (As Lead Bank), Bank of Baroda,
 Exim Bank, HDFC Bank Ltd., IDBI Bank Ltd., Axis Bank Limited and
 Standard Chartered Bank are secured by an equitable mortgage on the
 immovable properties and hypothecation of movable plant and machinery
 and assets of the Company''s Materials Handling Equipment Division and
 Gear Division excluding certain assets specifically/ exclusively
 charged to other banks/ financial institutions but including the whole
 of the Company''s Currents Assets, Inventories, Receivables and Book
 Debts ranking pari passu inter se in respect of working capital
 facilities and guarantees issued by them in favour of various clients
 of the Company.
 
 2. CONTIGENT LIABILITIES AND COMMITMENTS                (Rs.in Lacs)
 
 (to the extent not provided for)
 
                                               As at            As at
 
                                    31 st March 2012   31st March 2011
 
 (a) Contingent Liabilities:
 
 Claims against the Company not 
 acknowledged as debt
 
 (i) Disputed Excise Duty & 
 Service Tax against Demand 
 Notices received                             233.20            269.38
 
 (ii) Disputed Sales Tax/Works 
      Contract Tax                            347.55            347.55
 
 (iii) Disputed Income Tax 
       Demand-Disputed by Company             928.54          1,079.65
 
 (iv) Disputed Income Tax Demand-
      Disputed by Income Tax 
      Authorities                              14.89             22.47
 
 (v) Service Tax disputed & paid 
     under Protest                            191.92               -
 
 (vi) Sales Bills Discounted under 
      LC with Banks                         6,151.32          3,713.74
 
 (vii) NexGen Energy Partners, LLC 
 of USA has filed a case bearing no.
 2011                                   Unascertained    Unascertained 
 CV 0066, against Reflecting Blue
 Technologies (RBT) of USA and the 
 company, in the court of Ohio, 
 USA on account of non performing of 
 Wind Mill supplied through Relfec
 ting Blue Technologies (RBT). The 
 matter is pending in the court of 
 Ohio, USA and amount of claim is 
 unascertainable.
 
 (viii) The Company has provided 
 Corporate Guarantee to Bank of 
 Baroda,                                    20,280.74            - 
 Dubai to the tune of GBP 
 7,216,000 and US$ 282,99,876 as a
 security for repayment of 
 financial facility availed by 
 Elecon Transmission International 
 Limited, Mauritius, a Wholly-Owned
 Subsidiary of the Company.
 
 a.  The rate of escalation in Salary (p.a.) considered in actuarial
 valuation is worked out after taking into account inflation, seniority,
 promotion and other relevant factors such as supply and demand in the
 employment market. Mortality rates are obtained from the relevant data
 of Life Insurance Corporation of India.
 
 b.  The liability for the gratuity Rs 396.60 Lacs (Previous Year Rs
 516.20 Lacs) as shown in the balance sheet is after adjusting the Fair
 value of plan assets (Invested with LIC/SBI) as at March 31, 2012 of Rs
 756.37 Lacs (Previous Year Rs 590.80 Lacs).
 
 ii) Liability in respect of Superannuation benefits extended to
 eligible employees is contributed by the Company to Life Insurance
 Corporation of India against a Master Policy @ 15% of the basic Salary
 of all the eligible employees subject to Maximum of Rs 1.00 Lac. The
 Company is providing for the outstanding Liability amount allocable to
 the broken period beyond Annual Renewal date of the Scheme.
 
 iii) The Company''s contributions paid/payable for the year to
 Provident Fund is charged to the Statement of Profit and Loss for the
 year of Rs 157.80 Lacs (Previous Year Rs 126.37 Lacs).
 
 a) Since, the figures of Alternate Energy Division (AED) are not
 reportable segment, as per the requirements of AS - 17, they are not
 shown separately.
 
 b) The Company has disclosed Business Segment as primary segment.
 
 c) Segments have been identified and reported taking into account the
 nature of products and services, the differing risks and returns, the
 organization structure and the internal financial reporting systems.
 
 d) The Segment Revenue, Results, Assets and Liability include the
 respective amounts identifiable to each of the segment and amounts
 allocated on a reasonable basis.
 
 e) Inter Segment Transfer Pricing Policy - the Gear supplied to
 Material Handling Equipment Division is based on cost.
 
 3. RELATED PARTY TRANSACTIONS
 
 Related Party Disclosures as required by Accounting Standard (AS) 18
 are given below: A) Name of the related parties and nature of
 relationships :
 
 a) Subsidiary Company
 
 (i) Elecon Transmission International Limited, Mauritius
 
 b) Step Down Subsidiaries
 
 (i) Benzlers Systems AB, Sweden
 
 (ii) Radicon Transmission UK Limited, U.K.
 
 (iii) AB Benzlers, Sweden
 
 (iv) Elecon USA Transmission Limited, USA
 
 (v) Benzlers Transmission A.S., Denmark
 
 (vi) Benzlers Antriebstechnik GmbH, Germany
 
 (vii) Benzlers TBA B.V., Netherlands
 
 (viii) Benzlers Antriebstechnik Gesmbh, Austria
 
 (ix) OY Benzlers AB, Finland
 
 (x) Benzlers Malaysia
 
 (xi) Benzlers Italia s.r.l.
 
 c) Associates and Joint Ventures
 
 (i) Eimco Elecon (India) Limited
 
 (ii) Elecon Australia Pty. Limited
 
 (iii) Elecon Africa Pty. Limited
 
 (iv) Elecon Singapore Pte. Limited
 
 (v) Elecon Middle East FZCO
 
 (vi) Elecon Engineering (Suzhou) Co. Ltd., China
 
 (vii) Elecon Peripharals Limited
 
 d) Individual having control/ significant influence
 
 (i) Shri Prayasvin B. Patel
 
 e) Key management Personnel
 
 (i) Shri Prayasvin B. Patel
 
 (ii) Shri Prashant C. Amin
 
 f) Enterprises over which (d) or (e) above have significant influence
 
 (i) Bipra Investments & Trusts Private Limited
 
 (ii) Devkishan Investment Private Limited
 
 (iii) K. B. Investments Private Limited
 
 (iv) Elecon Information Technology Limited
 
 (v) Emtici Engineering Limited
 
 (vi) Prayas Engineering Limited
 
 (vii) Specialty Wood Pack Private Limited
 
 (viii) Power Build Limited
 
 (ix) Kirloskar Power Build Gears Limited
 
 (x) Akaaish Mechatronics Limited
 
 (xi) Madhuban Prayas Resorts Limited
 
 (xii) Narmada Travels Limited
 
 (xiii) Wizard Fincap Limited
 
 4. DISCLOSURES SPECIFIED BY THE MSMED ACT
 
 The Company has not received information from vendors regarding their
 status under the Micro, Small and Medium Enterprises Development Act,
 2006 and hence, disclosure relating to amounts unpaid as at the year
 end together with interest paid/payable under this Act could not been
 given.
 
 5.  PROPOSED DIVIDEND
 
 The Board of Directors have proposed equity dividend of Rs 1.80
 (Previous Year Rs 1.80) per equity share of Rs 2.00 each.
 
 The aggregate amount of equity dividend proposed to be distributed is 
 1942.67 (Previous Year Rs 1942.67) Including Dividend distribution tax
 of Rs 271.16 (Previous Year Rs 271.16 Lacs).
 
 6.  The Ministry of Corporate Affairs, Government of India, vide
 General Circular No. 2 and 3 dated 8th February 2011 and 21st February
 2011 respectively has granted a general exemption from compliance with
 Section 212 of the Companies Act, 1956, subject to fulfillment of
 conditions stipulated in the circular. The Company has satisfied the
 conditions stipulated in the circular and hence is entitled to the
 exemption. Necessary information relating to the subsidiaries has been
 included in the Consolidated Financial Statements.
 
 7.  PREVIOUS YEAR FIGURES
 
 During the year ended 31st March, 2012, the Revised Schedule VI
 notified under The Companies Act, 1956 has become applicable to the
 Company for preparation and presentation of its financial statement. The
 adoption of Revised Schedule VI does not impact recombination and
 measurement principles followed for preparation of financial
 statements. However, it has significant impact on presentation and
 disclosures made in the financial statement. The Company has also
 reclassified the previous year''s figures in accordance with the
 requirements applicable in the current year. In view of this
 reclassification, certain figures of current year are not strictly
 comparable with those of the previous year.
 
 8.  Note 1 to 40 form an integral part of the financial statements.