1.  Accounting Convention
 
 Financial statements have been prepared in accordance with applicable
 Accounting Standards in India. A summary of important accounting
 policies is set out below. The financial statements have also been
 prepared in accordance with relevant presentational requirements of the
 Companies Act, 1956.
 
 2.  Basis of Preparation of Financial statements
 
 The financial statements have been prepared as of a going concern on
 historical cost convention and on accrual basis of accounting in
 accordance with generally accepted accounting principles and the
 provisions of Companies Act, 1956.
 
 3.  Use of Estimates
 
 The presentation of financial statements requires the management to
 make estimates and assumptions that affect the reported amount of
 assets and liabilities and disclosure of contingent liability as at the
 date of financial statements and the reported amount of revenue and
 expenses during the reporting period. Difference between the actual
 results and estimates are recognized in the period in which the results
 are known/materialized.
 
 4.  Inventory
 
 Inventory is valued as under:- Stores and Spares – at monthly weighted
 average cost.
 
 Traded goods and Equipments stock – at lower of Weighted Average on
 FIFO Basis or realizable value.
 
 Projects / Contracts work in progress – at cost.  Provisions are made
 for anticipated losses, if any.
 
 5.  Prior Period / Extraordinary Items / Event Occurring after Balance
 Sheet Date
 
 All prior period items, which are material and which arise in the
 current period as a result of ''errors and omissions'', in the
 preparation of prior periods'' financial statements, are separately
 disclosed in the current statement of Profit and Loss. However,
 differences in actual income / expenditure arising out of over or under
 estimation in the previous period are not treated as prior period
 income / expenditure.
 
 All extraordinary items, i.e., gains or losses which arise from events
 or transactions which are distinct from the ordinary activities of the
 company and which are material are separately disclosed in the
 statement of accounts.
 
 Assets and liabilities should be adjusted for events occurring after
 the balance sheet date that provide additional evidence to assist the
 estimation of amounts relating to conditions existing at the balance
 sheet date.
 
 6.  Fixed Assets and Depreciation
 
 > Fixed Assets are stated at cost less accumulated depreciation
 thereon. Cost includes original cost of acquisition, including
 incidental expenses related to such acquisition and installation.
 
 > Exchange rate gain or loss on foreign currency loans related to
 acquisition of depreciable assets is being capitalized.
 
 > Depreciation is provided on the straight-line method basis, except in
 the case of Vehicles, where the written down value method is used. The
 rates of depreciation prescribed in Schedule-XIV to the Companies Act,
 1956 are considered as the minimum rates. If the management''s estimate
 of the useful life of a fixed asset at the time of acquisition of the
 asset or of the remaining useful life on a subsequent review is shorter
 than that envisaged in the aforesaid schedule, depreciation is provided
 at a higher rate. Pursuant to this policy depreciation on plant and
 machinery has been provided @ 5.15%, which is higher than the
 corresponding rates prescribed under schedule-XIV to the Companies Act,
 1956.
 
 7.  Impairment of assets
 
 At each balance sheet date, the Company assesses whether there is any
 indication that an asset is impaired.  If any such indication exists,
 the Company estimates the recoverable amount. An impaired loss is
 recognized in the profit and loss account to the extent the carrying
 amount exceeds the recoverable amount. The recoverable amount is the
 higher of the asset''s fair value less costs to sell and value.
 
 8.  Intangible Assets
 
 Intangible assets consisting of Technical Know-how and Software are
 amortized over a period of five years or over the remaining useful
 lives determined on a subsequent review, if shorter.
 
 9.  Revenue Recognition
 
 Sales of products are recognized when risk and reward of ownership of
 products are passed on to the customers which is generally on dispatch
 of goods and are exclusive of sales tax.
 
 Revenue from service contracts is accounted for when services are
 rendered and / or in terms of the agreement with the parties.
 
 Revenue from projects is recognized on the proportionate completion
 method including in respect of turnkey project work. In accordance with
 this method, revenue is recognized in proportion to the actual cost
 incurred as against the total estimated cost of projects under
 execution. The determination of revenue under this method involves
 making estimates, some of which are of technical nature, concerning,
 where relevant, the proportion of completion, cost of completion and
 expected revenues etc.
 
 10.  Foreign Currency transactions
 
 Transactions in foreign currency are recorded at the rates prevailing
 on the date of the transaction. Monetary assets and liabilities
 relating to foreign currency transaction remaining unsettled at the end
 of the year are translated at the year-end rates. Exchange difference
 arising on settlement of transactions and translation of monetary items
 are recognized as income or expense in the year in which they arise
 except for the exchange difference related to acquisition of fixed
 assets which are capitalized.
 
 11.  Investments
 
 Current Investments are stated at lower of cost or net fair market
 value. Long term investments including in subsidiaries, associates etc.
 are carried at cost less provision, if any, for diminution, other than
 temporary, in their value.
 
 12.  Retirement Benefits
 
 Provident Fund
 
 The Company''s contributions towards Provident fund are charged to the
 Profit and Loss Account for the year.
 
 Superannuation benefits
 
 The Company has availed for Employees Group superannuation scheme with
 the Life Insurance Corporation of India for providing pension benefits
 to its staff that have satisfied the criteria specified by the company
 from time to time. Contribution paid to the Scheme is charged to
 revenue account.
 
 Gratuity benefits and Leave encashment
 
 The Company provides for gratuity liability and leave encashment on the
 basis of actuarial valuation at the year end and incremental liability,
 if any, is provided for in the books. The actuarial valuation is done
 based on Projected Unit Credit Method. Actuarial Gains and Losses
 comprise of experience adjustments and the effects of changes in
 actuarial assumptions and are recognised immediately in the Profit and
 Loss Account as income or expense.
 
 13.  Borrowing Cost
 
 Borrowing costs attributable to the acquisition, construction or
 production of a qualifying asset is capitalized as part of the cost of
 the asset. Other borrowing costs are recognized as an expense in the
 period in which they are incurred.
 
 14.  Leases
 
 Assets taken on finance lease are capitalized in accordance with the
 Accounting Standard 19 on Leases notified by Companies (Accounting
 Standards) Rules, 2006.
 
 In respect of assets taken on operating lease, the lease rentals are
 charged to the profit and loss account on a straight line basis over
 the lease term.
 
 15.  Taxes on Income
 
 Tax expense for the period, current tax, deferred tax and fringe
 benefit is included in determining the net profit/ (loss) for the
 period.
 
 Deferred Tax is recognized for all timing differences between the
 accounting income and taxable income for the year that originates in
 one period and are capable of reversal in one or more subsequent
 periods and is quantified using the enacted/substantially enacted tax
 rates as at the balance sheet date.
 
 Deferred Tax Assets are recognized where realization is reasonably
 certain whereas in case of carried forward losses or unabsorbed
 depreciation, deferred tax assets are recognized only if there is a
 virtual certainty of realization backed by convincing evidence.
 
 Deferred Tax Assets are reviewed for the appropriateness of their
 respective carrying value at each Balance Sheet date.
 
 16.  Earning Per Share
 
 The Company reports basic and diluted Earnings Per Share (EPS) in
 accordance with Accounting Standard 20 on Earnings Per Share notified
 by Companies (Accounting Standard) Rules, 2006. Basic EPS is computed
 by dividing the net profit or loss for the year by the weighted average
 number of Equity shares outstanding during the year.  Diluted EPS is
 computed by dividing the net profit or loss for the year by the
 weighted average number of equity shares outstanding during the year as
 adjusted for the effects of all dilutive potential equity shares,
 except where the results are anti-dilutive.
 
 17.  Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions are recognized only when there is a present obligation as a
 result of past events and when a reliable estimate can be made of the
 amount of obligation.
 
 Contingent liability is disclosed for 
 
 (i) Possible obligations which will be confirmed only by future events
 not wholly within the control of the Company or 
 
 (ii) Present obligations arising from past events where it is not
 probable that an outflow of resources will be required to settle the
 obligation or a reliable estimates of the amount of the obligation can
 not be made.
 
 Contingent Assets are not recognized in the financial statements since
 this may result in the recognition of income that may never be
 realized.
 
 18.  Share Issue Expenses
 
 Share issue expenses are adjusted against securities premium account to
 the extent of balance available and the balance portion, if any, left
 thereafter is charged off to the profit and loss account, as incurred.
 Premium on redemption of FCCB is also adjusted against securities
 premium account.