(a) BASIS OF PREPARATION OF ACCOUNTS
 
 The financial statements have been prepared on accrual basis following
 the historical cost convention in accordance with generally accepted
 accounting principles in India and the Accounting Standards notified by
 the Companies (Accounting Standards) Rules, 2006 and the relevant
 presentation requirements of the Companies Act, 1956
 
 (b) Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the reported amounts of revenue and expenses
 during the reporting period. Examples of such estimates include
 provisions for doubtful debts, employee benefits, assessment of income
 taxes, estimated cost of contract and useful lives of fixed assets.
 Actual results could differ from those estimates. The estimates and
 underlying assumptions are reviewed on an ongoing basis.  Revisions to
 accounting estimates are recognised in the period in which the estimate
 is revised if the revision affects only that period or in the period of
 the revision and future periods if the revision affects both current
 and future periods.
 
 (c) FIXED ASSETS
 
 Tangible Fixed Assets
 
 Tangible fixed assets are stated at original cost net of tax/duty
 credits availed, if any, less accumulated/ depreciation. Cost comprises
 of the purchase price and any attributable cost of bringing the assets
 to its working condition for its intended use.  Interest on borrowings
 during the period of construction is added to the cost of fixed assets.
 
 Intangible Assets
 
 Intangible assets are initially measured at cost and amortised so as to
 reflect the pattern in which the assets economic benefits are consumed.
 
 (d) DEPRECIATION AND AMORTISATION
 
 Tangible Assets
 
 Depreciation on all tangible fixed assets is provided on straight line
 basis at the rates and in the manner specified in Schedule XIV to the
 Companies Act,1956.
 
 Intangible Assets
 
 (a) Technical Knowhow
 
 The expenditure is amortised over the estimated period of benefit, not
 exceeding six years commencing with the date of purchase of the
 technology.
 
 (b) Software Expenditure
 
 The expenditure incurred is amortised over five years commencing from
 the date when the expenditure is incurred.
 
 (e) IMPAIRMENT OF ASSETS
 
 The carrying amount of fixed assets are reviewed at each Balance Sheet
 date to assess if there is any indication of impairment based on
 internal/external factors. An impairment loss will be recognised
 wherever the carrying amount of an asset exceeds its recoverable amount
 which is higher of net realisable value and value in use.
 
 (f) INVESTMENTS
 
 Long term investments are carried at cost and provisions are recorded
 to recognise any decline, other than temporary, in the carrying value
 of each investment. Current investments are carried at lower of cost
 and fair value.
 
 (g) INVENTORIES
 
 Raw materials, work-in-progress and finished goods are valued at lower
 of cost and net realisable value. Stores and spare parts and loose
 tools are carried at cost less obsolescence.
 
 Cost of inventories is ascertained on the weighted average basis.
 Cost of work-in-progress and finished goods is determined on full
 absorption cost basis.
 
 (h) REVENUE RECOGNITION (OTHER THAN CONTRACTS)
 
 Revenue is recognised on completion of sale of goods / rendering of
 services. Sales excludes sales tax collected from customers.
 
 (i) ACCOUNTING OF CONTRACTS
 
 Contract Revenue is recognised on percentage completion method as
 required under Accounting Standard 7 - Construction Contracts.  The
 stage of completion is determined as a proportion that contract costs
 incurred for work performed up to the closing date bear to the
 estimated total costs. Profit (contract revenue less contract cost) is
 recognised when the outcome of the contract can be
 
 20.  NOTES TO THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2011 (Contd.)
 
 estimated reliably and for contracts valued up to Rs.100 crores, profit
 is recognised when stage of completion is 40% or more, and for
 contracts valued more than Rs. 100 crores, profit is recognised either
 at 25% stage of completion or an expenditure of Rs.40 crores whichever
 is higher. When it is probable that the total cost will exceed the
 total contract revenue, the expected loss is recognised immediately.
 For this purpose total contract costs are ascertained on the basis of
 contract costs incurred and cost to completion of contracts which is
 arrived at by the management based on current technical data, forecast
 and estimate of net expenditure to be incurred in future including for
 contingencies etc.
 
 (j) FOREIGN EXCHANGE TRANSACTIONS
 
 i) Transactions in foreign currencies are recorded at the exchange
 rates prevailing on the date of transaction. Monetary assets and
 liabilities relating to foreign currency transactions are translated at
 year end exchange rates. The difference in translation and realised
 gains/losses are recognised in the Profit and Loss Account.  ii) In
 respect of items covered by forward exchange contracts, the premium or
 discount arising at the inception of such a forward exchange contract
 is amortised as expense or income over the life of the contract. Any
 Profit or Loss arising on cancellation or renewal of such a forward
 exchange contract is recognised in the Profit and Loss Account.
 
 (k) EMPLOYEE BENEFITS
 
 i) All employee benefits falling due wholly within twelve months of
 rendering the service are classified as short term employee benefits.
 Short -term Employee Benefits are recognised as an expense in the
 profit and loss account of the year in which the related service is
 rendered.
 
 ii) Companys contributions towards Provident Fund and Superannuation
 Fund paid /payable during the year are charged to the Profit and Loss
 Account of the year in which the employee renders the related service.
 
 iii) Companys liability towards gratuity, long term compensated
 absences and pension to whole time directors are determined by
 independent actuaries, using the projected unit credit method. Past
 services are recognised on a straight line basis over the average
 period until the benefit become vested. Actuarial gains or losses are
 recognised immediately in the statement of profit & loss account as
 income or expense. Obligation is measured at present value of estimated
 future cash flows using a discounted rate that is determined by
 reference to the market yields at the balance sheet date on Government
 Bonds where the currency and terms of the Government Bonds are
 consistent with the currency and estimated terms of the defined benefit
 obligation.
 
 iv) Companys liabilities towards post -retirement medical benefits for
 separated employees, farewell gifts, long service awards and Early
 Separation Compensation (ESS) are measured at the present value of
 estimated future cash flows as per the requirements of Accounting
 Standard-15 on Employee Benefits.
 
 v) Actuarial gains and losses in respect of post employment and other
 long term benefits are charged to the profit and loss account.
 
 (l) SEGMENT REPORTING
 
 Segment accounting policies are in line with policies of the company.
 In addition, the following policies have been followed for segment
 reporting:
 
 i) Segment revenues include sale and other income directly attributable
 with/allocable to the segment including inter segment revenue.  ii)
 Expenses that are directly identifiable with/ allocable to segments are
 considered for determining the segment result. Expenses which relate to
 the company as a whole and not allocable to Segments are included under
  unallocable corporate expenditure.  iii) Incomes which relate to the
 company as a whole and not allocable to segments are included under
 unallocable corporate income.  iv) Segment assets and liabilities
 include those which are directly identifiable with the respective
 segments. Unallocable corporate assets and liabilities are those which
 relate to the company as a whole and are not allocable to any segment.
 
 (m) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 A provision is recognised when the Company has a present obligation as
 a result of past event and it is probable that an outflow of resources
 embodying economic benefit 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 expenditure required to settle
 the present obligation. The company does not recognise contingent
 liability. A disclosure for a contingent liability is made, unless the
 possibility of an outflow of resources is remote.  Provision for
 anticipated warranty costs is made on the basis of technical and
 available cost estimates.
 
 (n) TAXES ON INCOME
 
 Tax on income for the current period is determined on the basis of
 taxable income and tax credits computed in accordance with the
 provisions of the Income Tax Act, 1961.
 
 Deferred tax is recognised, subject to the consideration of prudence in
 respect of Deferred tax assets, on timing differences, being the
 difference between taxable income and accounting income that originate
 in one period and are capable of reversal in one or more subsequent
 periods.
 
 Deferred Tax Assets in respect of unabsorbed depreciation and carry
 forward of losses are recognised if there is virtual certainty
 supported by convincing evidence that sufficient future taxable income
 will be available against which such deferred tax can be realised.
 
 (o) BORROWING COST
 
 Borrowing costs that are attributable to the manufacturing, acquisition
 or construction of qualifying assets are included as part of the cost
 of such assets.
 
 A qualifying asset is one that necessarily takes more than twelve
 months to get ready for intended use or sale.
 
 Other borrowing costs are recognised as expense in the period in which
 they are incurred.