1.  Basis of Accounting
 
 The company maintains its accounts on going concern basis following the
 historical cost convention as per the generally accepted accounting
 principles prevalent in India and on accrual method of accounting.
 
 2.  Basis for preparation of financial statements
 
 The financial statements have been prepared under the historical cost
 convention, in accordance with Accounting Standards notified by the
 Central Government and the provisions of the Companies Act, 1956, as
 adopted consistently by the Company. All income and expenditure having
 a material bearing on the financial statements are recognized on
 accrual basis.
 
 The preparation of financial statements in conformity with Accounting
 Standards requires management to make estimates and assumptions that
 affect the reported amounts of assets and liabilities at the date of
 financial statements, and the reported amounts of revenues and expenses
 during the reporting period. Examples of such expenses include
 estimates of contract completion costs, provision for doubtful debts,
 useful lives of fixed assets etc. Actual results could differ from
 those estimates. Any revision to accounting estimates is recognised
 prospectively in current and future periods.
 
 3.  Revenue Recognition
 
 Revenue from Sales/Services is accounted for as net of taxes and the
 principles of revenue recognition are given below:- - Revenue from
 services rendered is recognized as the service is performed.
 
 - Income from turnkey projects is recognized as a percentage and in
 proportion to work completion. However in cases of contracts where
 consideration is separately defined / identified for supply of
 goods/materials whose distinct identity remains even after project
 completion, revenue is recognized based on delivery at site to the
 customers.
 
 - In case of fixed-price contracts, revenue is recognized based on the
 milestones achieved as specified in the contracts.
 
 - Revenue from sales is recognized upon passing of title/
 shipment/Installation of the products and on transfer of significant
 risk and rewards of ownership.
 
 - Dividend income is recognized when the right to receive dividend is
 established.
 
 - Interest is recognized on time proportion basis.
 
 4.  Fixed Assets
 
 Fixed Assets are stated at cost of acquisition inclusive of freight,
 duties, taxes and expenses incidental to acquisition and installation
 till its present location.
 
 5.  Depreciation
 
 Depreciation on Fixed Assets has been provided on Written down Value
 Method as per rates prescribed by Schedule-XIV to the Companies Act,
 1956.
 
 6.  Borrowing Cost
 
 Borrowing costs that are directly attributable to the acquisition or
 construction of Fixed Assets, which take substantial period of time to
 get ready for its intended use, are capitalized until the time all
 substantial activities necessary to prepare such assets for their
 intended use are complete. Other borrowing costs are recognized as an
 expense in the year in which they are incurred.
 
 7.  Impairment
 
 Accounting for impairment of Fixed Assets is done in accordance with
 the Accounting Standard 28 – Impairment of Assets.  Accordingly, the
 carrying values of assets are reviewed at each reporting date to
 determine if there is indication of any impairment. If any indication
 exists, the assets recoverable amount is estimated. For assets that
 are not yet available for
 
 use, the recoverable amount is estimated at each reporting date. An
 impairment loss is recognised whenever the carrying amount of an asset
 or its cash generating unit exceeds its recoverable amount. Impairment
 losses are recognised in the Profit and Loss Account. An impairment
 loss is reversed if there has been a change in the estimates used to
 determine the recoverable amount. An impairment loss is reversed only
 to the extent that the assets carrying amount does not exceed the
 carrying amount that would have been determined net of depreciation or
 amortisation, if no impairment loss has been recognised.
 
 8.  Employee Benefits
 
 - All employee benefits payable/available within twelve months of
 rendering the service are classified as short-term employee benefits in
 terms of Accounting Standard 15 (Revised)– Employee Benefits.
 Benefits such as salaries, wages and bonus etc., are recognised in the
 Profit and Loss Account in the period in which the employee renders the
 related service.
 
 - Gratuity costs are defined benefits plans. The present value of
 obligations under such defined benefit plan is determined based on
 actuarial valuation carried out by an independent actuary using the
 Projected Unit Credit Method, which recognises each period of service
 as giving rise to additional unit of employee benefit entitlement and
 measure each unit separately to build up the final obligation.
 
 The obligation is measured at the present value of estimated future
 cash flows. The discount rates used for determining the present value
 of obligation under defined benefit plans, is based on the market
 yields on Government securities as at the balance sheet date, having
 maturity periods approximating to the terms of related obligations.
 
 Actuarial gains and losses are recognized immediately in the Profit and
 Loss Account.
 
 - Benefits under the Companys leave encashment scheme constitute other
 long term employee benefits. The obligation in respect of leave
 encashment is provided on the basis on actuarial valuation carried out
 by an independent actuary using the Projected Unit Credit Method, which
 recognises each period of service as giving rise to additional unit of
 employee benefit entitlement and measure each unit separately to build
 up the final obligation.
 
 The obligation is measured at the present value of estimated future
 cash flows. The discount rates used for determining the present value
 of obligation under defined benefit plans, is based on the market
 yields on Government securities as at the balance sheet date, having
 maturity periods approximating to the terms of related obligations.
 
 Actuarial gains and losses are recognized immediately in the Profit and
 Loss Account
 
 - The company is contributing to the Employee Provident Fund maintained
 under the Employees Provident Fund Scheme by the Central Government.
 
 9.  Finance Lease
 
 Accounting for Financial Lease is done in accordance with Accounting
 Standard 19 – Leases. The assets are included in fixed assets and the
 capital elements of the leasing commitments are shown as obligations
 under leases liability.  The capital element is applied to reduce the
 outstanding obligations and the interest element is charged against
 profit in proportion to the reducing capital element outstanding.
 Depreciation on Assets held under finance leases has been provided on
 Written down Value Method as per rates prescribed by Schedule-XIV to
 the Companies Act, 1956.
 
 10.  Accounting for Investments
 
 Investments are accounted for in accordance with the Accounting
 Standard 13 – Accounting for Investments. Investments that are
 readily realizable and intended to be held for not more than a year are
 classified as current investments. All other Investments are classified
 as long term investments. Accordingly,
 
 - The Long Term Investments are recorded at cost except where there is
 permanent diminution in its value.
 
 - The Short Term Investments are recorded at Cost or Market Price
 whichever is lower. Unrealized loss arising due to the fall in market
 price is provided for in the accounts and any gain thereof is ignored.
 
 11.  Foreign Currency Transactions
 
 Foreign Currency transactions are being recorded in accordance with
 Accounting Standard 11 The Effects of changes in Foreign Exchange
 Rates. Accordingly,
 
 - Foreign currency transactions are accounted at the exchange rates
 prevailing on the date of the transactions. Gains and losses, if any,
 at the year-end in respect of monetary assets and monetary liabilities
 not covered by the forward contracts are recognized in the Profit and
 Loss Account.
 
 - Non-Monetary items denominated in foreign currency are stated at the
 rate prevailing on the date of the transaction.
 
 12.  Taxes on Income
 
 Deferred Tax:
 
 Deferred Tax Liability is provided pursuant to Accounting Standard –
 22, Accounting for Taxes on Income. Deferred Tax Assets and Deferred
 Tax Liability are calculated by applying tax rates and tax laws that
 have been enacted or substantively enacted at the balance sheet date.
 Deferred Tax Liability arising mainly on account of excess depreciation
 allowed under Income tax laws.
 
 Deferred Tax Assets due to expenses disallowed under section 40(a)
 under tax laws and on account of other timing differences are
 recognized only to the extent there is reasonable certainty of its
 realization.
 
 Deferred Tax Assets due to unabsorbed depreciation or carry forward of
 losses under tax laws is recognizes only to the extent that there is a
 virtual certainty supported by convincing evidence that sufficient
 future taxable income will be available against which such deferred tax
 asset can be realized.
 
 Current Tax:
 
 The provision for Taxation is based on estimated assessable total
 income of the company as determined under the Income Tax Act 1961.
 
 13.  Provisions, Contingencies and Contingent Assets
 
 Provisions, Contingencies and Contingent Assets are accounted for in
 accordance with Accounting Standard 29 – Provisions, Contingent
 Liabilities & Contingent Assets. Accordingly,
 
 - A provision is created when there is a present obligation as a result
 of a past event that probably requires an outflow of resources and a
 reliable estimate can be made of the amount of the obligation.
 
 - A disclosure for a contingent liability is made when there is a
 possible obligation or a present obligation that may, but probably will
 not, require an outflow of resources. When there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision or disclosure is made.
 
 - Contingent Assets are neither recognized, nor disclosed