1.  Basis of Preparation of Financial Statements:
 
 The financial statements have been prepared and presented under the
 historical cost convention, on accrual basis of accounting, except for
 certain fixed assets which are revalued in accordance with generally
 accepted accounting principles in India and the provisions of the
 Companies Act, 1956. They are prepared in accordance with the
 accounting standards notified under sub section (3C) of section 211 of
 the Companies Act, 1956 and other relevant provisions to the extent
 applicable.
 
 2.  Use of Estimates:
 
 The presentation of financial statements requires estimates and
 assumptions. These estimates and assumptions affect the reported amount
 of assets and liabilities on the date of the financial statements and
 the reported amount of revenues and expenses during the reporting
 period. Difference between the actual results and the estimates are
 recognised in the period in which the results are known/materialised.
 
 3.  Revenue Recognition:
 
 a) Sale of goods is recognised on completion of supplies as per the
 terms of the contract and on transfer of risk and reward. Sales include
 excise duty and adjustment for price variation and are net of claims
 accepted.
 
 b) In case of construction/erection contracts, revenue is recognised
 based on the stage of completion determined as per the terms of the
 contract. Sales/income are booked on the basis of running account bills
 based on completed work and are net of claims accepted. Escalations and
 other claims which are not acknowledged by customers are not taken into
 account.
 
 c) Interest income is recognised on time proportion basis.
 
 d) The insurance claims are accounted for on accrual basis based on
 fair estimation of sanction by the insurance companies.
 
 4.  Fixed Assets:
 
 Fixed assets are stated at cost of acquisition or construction, net of
 recoverable taxes including any cost attributable for bringing the
 asset to its working condition for its intended use and includes amount
 added on revaluation, less accumulated depreciation and impairment
 loss, if any.
 
 5.  Depreciation/Amortisation:
 
 a) Depreciation on fixed assets is provided on Straight Line Method at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956 except on computer software and on fixed assets of Uganda,
 Tunisia and Bhutan branches.
 
 b) Computer software is depreciated over a period of 3 to 6 years
 depending upon the expected useful life of the software.
 
 c) On the fixed assets of Tunisia, Uganda and Bhutan branches,
 depreciation is provided on Straight Line Method. The applicable rates
 are based on the local laws and practices of the respective countries.
 
 d) Assets individually costing 0.005 Million or less are depreciated
 fully in the year of purchase.
 
 e) In case of revalued assets, the difference between the depreciation
 based on revaluation and the depreciation charged on historical cost is
 recouped out of the revaluation reserve.
 
 f) Leasehold Land is amortised over the period of lease.
 
 g) Goodwill arising on amalgamation is amortised over a period of 5
 years.
 
 6.  Investments:
 
 Long term investments are stated at cost. Provision for diminution in
 value of such investments is made only if such a decline is other than
 temporary.
 
 7.  Inventories:
 
 a) Raw materials, Construction materials, Components and Stores and
 Spares are valued at lower of cost or net realisable value.
 
 b) Cost of inventories has been determined by using the weighted
 average method.
 
 c) Material purchased for supply against specific contracts is valued
 at cost or net realisable value as per the contract, whichever is
 lower.
 
 d) Work-in-progress is valued at cost including material cost and
 attributable overheads. Provision is made when expected realisation is
 lesser than the carrying cost.
 
 e) Finished goods are valued at cost or net realisable value, whichever
 is lower and inclusive of excise duty.
 
 f) Scrap is valued at net realisable value.
 
 8.  Tools and Tackles:
 
 Tools and tackles are amortised over their estimated useful life.
 
 9.  Borrowing Cost:
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of qualifying assets are capitalised as part
 of the cost of such assets. A qualifying asset is one that necessarily
 takes substantial period of time to get ready for its intended use. All
 other borrowing costs are recognised as expenses in the period in which
 they are incurred.
 
 10.  Impairment of Assets:
 
 Consideration is given at each balance sheet date to determine whether
 there is any indication of impairment of the carrying amount of the
 Companys fixed assets. If any such indication exists, then recoverable
 amount of the asset is estimated. An impairment loss, if any, is
 recognised whenever the carrying amount of an asset exceeds its
 recoverable amount. The recoverable amount is greater of the net
 selling price and the value in use. In assessing value in use, the
 estimated future cash flows are discounted to their present value based
 on an appropriate discount factor.
 
 The impairment loss recognised in a prior accounting period is
 reversed, if there has been a change in the estimate of recoverable
 amount.
 
 11.  Debenture issue expenses:
 
 Expenses incurred for issue of secured debentures made by the Company,
 are written off as revenue expenditure during the year of issue.
 
 12.  Foreign Currency Transactions:
 
 a) Transactions denominated in foreign currencies are accounted for at
 the exchange rates prevailing on the dates of the transactions or that
 approximates the actual rate at the dates of transactions.
 
 b) Monetary items denominated in foreign currencies, remaining
 unsettled at the year end are restated at the year end rates.
 
 c) Non-monetary items other than fixed assets denominated in a foreign
 currency are stated in terms of historical costs.
 
 d) Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in Profit and Loss Account.
 
 e) Financial Statements of Overseas Integral Operations are translated
 as under:
 
 i.  Assets and liabilities are translated at the rate prevailing at the
 end of the year. Income and expenditure are translated on the yearly
 average exchange rate prevailing during the year.
 
 ii.  Fixed assets are translated at the average rate prevailing on
 purchase/acquisition of assets. Depreciation is accounted at the same
 rate at which the assets are translated.
 
 iii.  The resultant exchange gains and losses are recognised in the
 Profit and Loss Account.
 
 f) Forward Exchange Contracts:
 
 i.  In case of transactions covered by forward exchange contracts which
 are not intended for trading or speculation purposes, premium or
 discount is amortised as expense or income over the life of the
 contract.
 
 ii.  Exchange difference on such contracts is recognised in the Profit
 and Loss Account in the year in which the exchange rates change.
 
 iii.  Profit or loss arising on cancellation or renewal of such forward
 exchange contracts are recognised as income or expense for the year.
 
 13.  Excise Duty:
 
 The excise duty in respect of closing inventory of finished goods is
 included as part of the inventory. The amount of Central Value Added
 Tax (CENVAT) credit in respect of materials consumed for sales is
 deducted from cost of materials consumed.
 
 14.  Leased Assets:
 
 Operating Lease:
 
 i.  Lease payments are recognised as expense in the Profit and Loss
 Account on straight line basis over the term of the lease.
 
 ii.  Assets given on operating lease are included in fixed assets.
 Lease income is recognised in the Profit and Loss Account on straight
 line basis over the term of the lease.
 
 15.  Employee Benefits:
 
 a.  Short Term Employee Benefits:
 
 Short term employee benefits are recognised as expenses at the
 undiscounted amount in the period during which the services have been
 rendered.
 
 b.  Long Term Employee Benefits:
 
 1.  Defined Contribution Plan:
 
 The Companys contribution to Provident Fund and Superannuation Fund
 are charged to Profit and Loss Account on accrual basis.
 
 2.  Defined Benefit Plan:
 
 i.  Gratuity: The Company provides for gratuity based on actuarial
 valuation as per the Projected Unit Credit Method.
 
 ii.  Leave encashment: The Company provides for liability at the year
 end on account of unavailed earned leave as per the actuarial valuation
 as per Projected Unit Credit Method.
 
 iii.  The bonus and leave travel allowance applicable to employees is
 accounted for on accrual basis.
 
 iv.  The cost of employee stock option attributable to current
 financial year is accounted for and charged to Profit and Loss Account.
 
 16.  Taxes on Income:
 
 a.  Current Tax:
 
 Provision for current Income Tax is made on the estimated taxable
 income using the applicable tax rates and tax laws.
 
 b.  Deferred Tax:
 
 Deferred tax arising on the timing differences and which are capable of
 reversal in one or more subsequent periods is recognised using the tax
 rates and tax laws that have been enacted or substantively enacted.
 Deferred tax asset is not recognised unless there is a virtual
 certainty as regards to the reversal of the same in future years.
 
 17.  Earnings Per Share:
 
 The basic earnings per share is computed by dividing the net profit
 attributable to the equity shareholders for the year by the weighted
 average number of equity shares outstanding during the reporting
 period. Diluted earnings per share is computed by dividing the net
 profit attributable to the equity shareholders for the year by the
 weighted average number of equity and dilutive equity equivalent shares
 outstanding during the year, except where the results would be anti
 dilutive.
 
 18.  Provisions and Contingencies:
 
 a.  A provision is recognised when there is a present obligation as a
 result of a 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 reviewed at each balance
 sheet date and adjusted to reflect the current best estimate.
 
 b.  A disclosure for a contingent liability is made when there is a
 possible or present obligation that may but probably will not require
 an outflow of resources. When there is a possible obligation in respect
 of which the likelihood of outflow of resources is remote, no provision
 or disclosure is made.
 
 c.  Contingent assets are neither recognised nor disclosed in the
 financial statement.
 
 19.  Employees Stock Option Scheme:
 
 Stock option granted to the employees of the Company, under the
 Employees Stock Option Scheme are evaluated as per the accounting
 treatment prescribed by SEBI (Employee Stock Option Scheme and
 Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess
 of market value of the stock option, as on date of grant over the
 exercise price of the option is recognised as deferred employee
 compensation and is charged to Profit and Loss Account as employee
 costs, on straight line method over the vesting period of the options.