a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The financial statements are prepared in accordance with the Indian
 Generally Accepted Accounting Principles (GAAP) under the historical
 cost convention, accrual basis of accounting, on going concern basis.
 GAAP comprises mandatory accounting standards issued by the Institute
 of Chartered Accountants of India, the provisions of Companies Act,
 1956, and guidelines issued by the Securities Exchange Board of India.
 Accounting policies have been consistently applied except where a newly
 issued accounting standard is initially adopted or a revision to an
 existing accounting standard requires a change in the accounting policy
 hitherto in use, or a change is necessitated , in the opinion of the
 management, in accordance with the nature of business of the Company
 and would result in a more appropriate presentation of the financial
 statements of the enterprise.
 
 The management evaluates all recently issued or revised accounting
 standards on an ongoing basis.
 
 b) USE OF ESTIMATES
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires the management of the
 Company to make estimates and assumptions that affect the reported
 balances of assets and liabilities and disclosures relating to the
 contingent liabilities as at the date of the financial statements and
 reported amounts of income and expenses during the period. Although
 these estimates are based on the managements'' best knowledge of current
 events and actions that the Company may undertake in future, the actual
 results could differ from those estimates. Any revision to accounting
 estimates is recognised prospectively in current and future periods.
 
 c) FIXED ASSETS, INTANGIBLE ASSETS AND WORK IN PROGRESS
 
 Fixed assets, including assets acquired for research and development
 are stated at cost less accumulated depreciation, and impairment
 losses. Cost comprises purchase price and any attributable cost
 incurred in bringing the asset to its working condition for its
 intended use.
 
 Interest on borrowed money allocated to and utilised for fixed assets,
 pertaining to the period up to the date of capitalisation is
 capitalised. Assets acquired on hire purchase are capitalised at the
 gross value and interest thereon is charged to Profit and Loss Account.
 
 Intangible assets are stated at the consideration paid for acquisition
 less accumulated amortisation.
 
 Intangible assets are recognised if, a) it is probable that the future
 economic benefits that are attributable to the assets will flow to the
 Company, and b) the cost of asset can be measured realiably.
 
 Capital work-in-progress comprises cost of fixed assets that are not
 yet ready for their intended use at the balance sheet date and the
 outstanding advances paid for the acquisition/construction of such
 fixed assets.
 
 An item of fixed assets is de-recognised upon disposal or when no
 future economic benefits are expected from its use or disposal. Any
 gain or loss arising on de-recognition of the fixed asset (calculated
 as the difference between the net disposal proceeds and the carrying
 amount of the asset) is included in the financial statements in the
 year the asset is de-recognised.
 
 d) IMPAIRMENT OF ASSETS
 
 As at each Balance Sheet date, the carrying amount of assets is tested
 for impairment so as to determine:
 
 a) the provision for impairment loss, if any required; or
 
 b) the reversal, if any, required of impairment loss recognised in
 previous periods.  Impairment loss is recognised when the carrying
 amount of an asset exceeds its recoverable amount.
 
 Recoverable amount is determined:
 
 a) in the case of an individual asset, at the higher of the net selling
 price and the value in use.
 
 b) in the case of a cash generating unit (a group of assets that
 generates identified independent cash flows) at the higher of the cash
 generating units'' net selling price and the value in use.
 
 Value in use is determined as the present value of estimated future
 cash flows from the continuing use of an asset and from its disposal at
 the end of its useful life.
 
 e) INVESTMENTS
 
 Investment in subsidiaries and others are stated at cost. Investments
 that are intended to be held for more than a year, from the date of
 acquisition, are classified as long term investments and are stated at
 cost less provision for diminution in the value of such investments.
 Diminution in value is provided for where the management is of the
 opinion that the diminution is of permanent nature. Investments other
 than long term investments being current investments are valued at
 lower of cost and fair value, determined on an individual basis.
 
 Investments in units are valued at cost or marked to market values,
 whichever is lower.
 
 Loss or gain on sale of investments is computed with reference to their
 cost.
 
 f) RESEARCH AND DEVELOPMENT
 
 Revenue expenditure on research and development is charged to Profit
 and Loss Account in the year in which it is incurred. Capital
 expenditure on research and development is treated as additions to
 fixed assets and depreciated in accordance with the depreciation policy
 set out in paragraph (h).
 
 g) INVENTORIES
 
 Raw material, components and stores are valued at cost on first in
 first out basis.
 
 Finished goods are valued at lower of cost or net realisable value.
 Cost is determined on the basis of first in first out method. Net
 realisable value is estimated selling price in the ordinary course of
 business less estimated costs necessary to make the sale.
 
 Work in process, other than project and construction related, is valued
 at cost and other attributable costs incurred upto the stage of
 completion.
 
 Cost includes direct material and labour and a proportion of
 manufacturing overheads based on normal operating capacities.
 
 Work in process, project and construction related, at cost till such
 time the outcome of the job cannot be ascertained reliably and at
 contracted price, thereafter.
 
 Cost includes costs that relate directly to the specific contracts and
 other allocable overheads that may be attributable to contract activity
 in general, including borrowing costs .
 
 h) DEPRECIATION
 
 Depreciation on fixed assets is charged on the straight line method at
 rates as specified in Schedule XIV of the Companies Act, 1956 on the
 original cost. Depreciation on the acquisition/purchase of assets
 during the year has been provided on pro-rata basis according to the
 period each asset was put to use during the year.
 
 Technology and Brand costs are amortised equally based on an estimated
 useful life of 20 years from the date of capitalisation.
 
 In respect of an asset for which impairment loss is recognised the
 depreciation is provided on the revised carrying amount of the assets
 over its remaining useful life.
 
 i) RECOGNITION OF REVENUE AND EXPENDITURE
 
 Revenue is recognised to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 Sales are stated net of discounts, returns and recoverable taxes.
 
 Revenue from services is recognised on accrual basis in accordance with
 the terms of the relevant agreement.
 
 Revenue from construction/project related activity and contracts for
 supply/commissioning of power transmission and distribution lines and
 equipments is recognized by reference to the aggregate cost incurred
 during the period and proportionate margin therein, using the
 percentage completion method.  Percentage of completion is determined
 as a proportion of the cost incurred upto the reporting date to the
 estimated total cost of the contracts
 
 Interest income is recognised on time proportion basis, taking into
 account the amount outstanding and the applicable rate of interest.
 
 Dividend income is accounted in the year of receipt.
 
 Expenditure incurred on research and development, technology seminar,
 training and business development is inclusive of direct expenses and
 allocable overheads.
 
 j) EMPLOYEE BENEFITS
 
 In accordance with the requirements of revised Accounting Standard-15
 Employee Benefits, the Company provides for gratuity covering
 eligible employees on the basis of actuarial valuation as carried out
 by an Actuary using the Projected Unit Credit Method.  The liability is
 unfunded. Actuarial gains and losses arising from changes in the
 actuarial assumptions are charged or credited to the Profit and Loss
 Account in the year in which such gains or losses arise.
 
 Leave encashment benefits payable to employees of the Company with
 respect to accumulated leave outstanding at the year end are accounted
 for on the basis of an actuarial valuation as at the Balance Sheet
 date. The liability is unfunded.
 
 Contributions payable by the Company to the concerned government
 authorities in respect of provident fund, family pension fund and
 employees state insurance are charged to Profit and Loss Account.
 
 Other employee benefits are accounted for on accrual basis.
 
 k) TAXATION
 
 The accounting treatment followed for taxes on income is to provide for
 current tax and deferred tax.  Provision for current income tax is made
 for the tax liability payable on taxable income ascertained in
 accordance with the applicable tax rates and laws.
 
 Deferred tax assets and liabilities are recognised for the future tax
 consequences attributable to timing differences between the financial
 statements, carrying amounts of existing assets and liabilities and
 their respective tax bases and carry forwards of operating loss.
 Deferred tax assets and liabilities are measured on the timing
 differences applying the tax rates and tax laws that have been enacted
 or substantively enacted by the Balance Sheet date. Changes in deferred
 tax assets and liabilities between one Balance Sheet date and the next,
 are recognised in the Profit and Loss Account in the year of change.
 The effect on deferred tax assets and liabilities of a change in tax
 rates is recognised in the Profit and Loss Account in the year of
 change.
 
 Deferred tax assets are recognized only to the extent there is
 reasonable certainty that sufficient future taxable income will be
 available against which these assets can be realized in future, whereas
 in case of existence of unabsorbed depreciation or carry forward of
 losses, deferred tax assets are recognised only if there is virtual
 certainty of realisation backed by convincing evidence. Deferred tax
 assets are reviewed at each Balance Sheet date.
 
 Advance taxes and provisions for current income tax are presented in
 the Balance Sheet after off- setting advance tax paid and income tax
 provision.
 
 l) EMPLOYEE STOCK OPTIONS
 
 The Company operates two equity-settled, share option plan for
 employees eligible under applicable laws. The Company measures the
 compensation cost relating to emplyee stock options using the Intrinsic
 Value Method.
 
 m) SEGMENT ACCOUNTING AND REPORTING
 
 The accounting principles consistently used in the preparation of the
 financial statements are also consistently applied to record income and
 expenditure in individual segments. The basis of reporting is as
 follows:
 
 a) Segment revenue and expenses
 
 Segment revenue and expenses those are directly attributable to the
 segment are considered for respective segments. For rest allocation has
 been done between segments and where it is not possible to segregate,
 the same has been considered as unallocable revenue and expenses.
 
 Segment revenue and expenses do not include interest or dividend
 income, profit on sale of investments, interest expense, provision for
 contingencies and taxation.
 
 b) Segment assets and liabilities
 
 Assets and liabilities have not been segregated to any of the
 reportable segments, as fixed assets are used interchangeably between
 segments and it is not practicable to provide meaningful segment
 disclosure relating to total assets and liabilities.
 
 n) EARNINGS PER SHARE
 
 In determining earnings per share, the Company considers the net profit
 after tax and includes the post tax effect of any extraordinary/
 exceptional item. The number of shares used in computing basic earnings
 per share is the weighted average number of shares outstanding during
 the period. The number of shares used in computing diluted earnings per
 share comprises the weighted average shares considered for deriving
 basic earnings per share, and also the weighted average number of
 equity shares that could have been issued on the conversion of all
 dilutive potential equity shares. The diluted potential equity shares
 are adjusted for the proceeds available, had the shares been actually
 issued at fair value (i.e. the average market value of the outstanding
 shares). Dilutive potential equity shares are deemed converted as of
 the beginning of the period, unless issued at a later date. The number
 of shares and potentially dilutive equity shares are adjusted for any
 stock splits and bonus shares issues.
 
 o) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions in foreign currencies are recorded at the rates prevailing
 on the date of the transaction.  Monetary items denominated in foreign
 currency are restated at the rate of prevailing on the balance sheet
 date except in cases where actual amount has been ascertained by the
 time of finalisation of accounts.
 
 Exchange differences arising on the translation or settlement of
 monetary items at rates different from those at which they were
 initially recorded during the year, or reported in the previous
 financial statements, are recorded in exchange fluctuation account and
 recognised as income or expense in the year in which they arise.
 
 In translating the financial statements of representative office, the
 monetary assets and liabilities are translated at the rate prevailing
 on the balance sheet date, non monetary assets and liabilities are
 translated at exchange rates prevailing at the date of the transaction
 and income and expense items are converted at the respective monthly
 average rates. Net gain/loss on foreign currency translation is
 recognised in the Profit and Loss Account.
 
 p) CASH FLOW STATEMENT
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature and any deferrals or accruals of past or future cash receipts or
 payments. The cash flows from regular revenue generating, investing and
 financing activities of the Company are segregated.
 
 q) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 A provision is recognised for a present obligation as result of past
 events if it is probable that an outflow of resources will be required
 to settle the obligation and in respect of which a reliable estimate
 can be made. Provisions are determined based on best estimate of the
 amount required to settle the obligation at the Balance Sheet date.
 Reimbursements expected in respect of expenditure required to settle a
 provision is recognised only when it is virtually certain that the
 reimbursement will be received.  Contingent liabilities is disclosed in
 the notes in case of a present obligation arising from a past event
 when it is not probable than an outflow of resources will be required
 to settle the obligation. Contingent assets are neither recognised nor
 disclosed in the financial statements. Contingent liabilities and
 contingent assets are reviewed at each balance sheet date.
 
 r) BORROWING COST
 
 Borrowing costs directly attributable to the acquisition, construction
 or production of qualifying assets which are assets that necessarily
 take a substantial period of time to get ready for their intended use,
 are added to the cost of those assets, until such time as the assets
 are substantially ready for their intended use. Where funds are
 temporarily invested pending their expenditure on the qualifying
 assets, any such investment income, earned on such fund is deducted
 from the borrowing cost incurred.
 
 s) LEASES
 
 Finance leases which effectively transfer to the company substantial
 risks and benefits incidental to ownership of the leased item, are
 capitalized and disclosed as leased assets.  Lease payments are
 apportioned between the finance charges and reduction of the lease
 liability so as to achieve a constant rate of interest on the remaining
 balance of the liability. Finance charges are charged directly against
 income.
 
 Leases where the lessor retains substantially all the risks and
 benefits of ownership of the asset are classified as operating leases.
 Operating lease payments are recognised as an expense in the income
 statement on the straight line basis over the lease term.
 
 t) MINIMUM ALTERNATE TAX (MAT)
 
 MAT credit is recognised as an asset only when and to the extent there
 is convincing evidence that the Company will pay income tax higher than
 that computed under MAT, during the period that MAT is permitted to be
 set off under the Income tax Act, 1961 . In the year, in which the MAT
 credit becomes eligible to be recognised as an asset in accordance with
 the recommendations contained in the guidance note issued by the
 Institute of Chartered Accountants of India (ICAI), the said asset is
 created by way of a credit to the Profit and Loss Account and shown as
 MAT credit entitlement. The Company reviews the same at each balance
 sheet date and writes down the carrying amount of MAT credit
 entitlement to the extent there is no longer convincing evidence to the
 effect that the Company will pay income tax higher than MAT during the
 specified period.