(a) Basis of Accounting:
 
 The financial statements have been prepared and presented under the
 historical cost convention on accrual basis of accounting to comply
 with the accounting standards referred to in Section 211 (3C)of the
 Companies Act, 1956.
 
 (b) Use of estimates:
 
 The presentation of the financial statements in conformity with the
 generally accepted accounting principles requires the management to
 make estimates and assumptions that affect the reported amount of
 assets and liabilities, revenues and expenses and disclosure of
 contingent liabilities. Such estimates and assumptions are based on
 managements evaluation of relevant facts and circumstances as on the
 date of financial statements.  The actual outcome may diverge from
 these estimates.
 
 (c) Fixed Assets:
 
 Tangible fixed assets and depreciation
 
 Tangible fixed assets acquired by the Company are reported at
 acquisition value, with deductions for accumulated depreciation and
 impairment losses, if any. The acquisition value includes the purchase
 price (excluding refundable taxes) and expenses directly attributable
 to the asset to bring it to the site and in the working condition for
 its intended use. Examples of directly attributable expenses included
 in the acquisition value are delivery and handling costs, installation,
 legal services and consultancy services. Where the construction or
 development of any such asset requiring a substantial period of time to
 set up for its intended use, is funded by borrowings, the corresponding
 borrowing costs are capitalised up to the date when the asset is ready
 for its intended use.
 
 Intangible assets and amortization
 
 The cost of technical know-how acquired is recognised as an Intangible
 Asset and amortised over a period of thirty six months from the date of
 acquisition.
 
 (d) Investments:
 
 Long term investments (including interest in a jointly controlled
 entity) are carried at cost less provision for permanent diminution in
 value of such investments. Current investments comprising investments
 in units of mutual fund are carried at lower of cost and fair value.
 
 (e) Inventories:
 
 Inventories are valued at the lower of the cost and the net realisable
 value. Cost is ascertained on weighted average basis. Costs include the
 purchase price, non-refundable taxes and delivery and handling costs.
 Cost of finished goods and work-in-progress are determined using the
 absorption costing principles. Costs include the cost of materials
 consumed, labour and a systematic allocation of variable and fixed
 production overheads.  Excise duties at the applicable rates are also
 included in the cost of finished goods. Tools are fully written off in
 the year of issue. Net realisable value is estimated at the expected
 selling price less estimated completion and selling costs.
 
 (f) Sales, services, other income and cost of sales: Supply contracts:
 
 Revenue is recognised when significant risks and rewards of ownership
 of the goods sold are transferred to the customer. Revenue represents
 the invoice value of goods provided to third parties net of excise
 duty, discounts and sales taxes/value added taxes.
 
 Construction contracts:
 
 Revenue is recognised under the percentage of completion method by
 reference to the stage of completion of the contract activity.
 
 Service contracts:
 
 Revenue is recognised pro-rata over the period during which the service
 is performed and are recorded net of service tax, as applicable.
 
 Export incentives:
 
 Export incentives are recognised in the year on the basis of claims
 submitted to the appropriate authorities provided there is no
 uncertainty to expect ultimate collection at the time of making the
 claim.
 
 Dividend:
 
 Dividend income is recognised when the right to receive payment is
 established.
 
 (g) Depreciation:
 
 Depreciation on fixed assets has been provided on straight-line basis
 at the rates as under:
 
 (i) improvements to properties taken under lease are written off over
 the primary period of the lease;
 
 (ii) data processing equipments @ 33.33%;
 
 (iii) cellular phones @ 100%;
 
 (iv) plant and machinery @ 10% (On single shift operation basis);
 
 (v) office equipments @ 10%;
 
 (vi) furniture and fixtures @ 10%;
 
 (vii) buildings @ 3.33%;
 
 (viii) vehicles @ 20%.
 
 (h) Employee benefits:
 
 (i) Post-employment benefit plans
 
 Contributions to defined contribution retirement benefit schemes are
 recognised as expense when employees have rendered services entitling
 them to contributions.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using the Projected Unit Credit
 
 Method, with actuarial valuations being carried out at each balance
 sheet date. Actuarial gains and losses are recognised in full in the
 Profit and Loss Account for the period in which they occur. Past
 service cost is recognised immediately to the extent that the benefits
 are already vested, and otherwise is amortised on a straight-line basis
 over the average period until the benefits become vested.
 
 The retirement benefit obligation recognised in the balance sheet
 represents the present value of the defined benefit obligation as
 adjusted for unrecognised past service cost, and as reduced by the fair
 value of scheme assets. Any asset resulting from this calculation is
 limited to past service cost plus present value of available refunds
 and reductions in future contributions to the scheme.
 
 (ii) Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees is recognised
 during the period when the employee renders the service. These benefits
 include compensated absences such as paid annual leave and performance
 incentives.
 
 (iii) Other long term employee benefits
 
 Other long term employee benefits are recognised as an expense in the
 Profit and Loss account for the period in which the employee has
 rendered services. Estimated liability on account of long term benefits
 is discounted to the current value, using the yield on government
 bonds, as on the date of balance sheet, as the discounting rate.
 
 (i) Lease Accounting: Operating Leases
 
 Lease of an asset whereby the lessor essentially remains the owner of
 the asset is classified as operating lease. The payments made by the
 Company as lessee in accordance with operational leasing contracts or
 rental agreements are expensed proportionally during the lease or
 rental period respectively. Any compensation, according to agreement,
 that the lessee is obliged to pay to the lessor if the leasing contract
 is terminated prematurely is expensed during the period in which the
 contract is terminated.
 
 (j) Foreign Currency Transactions:
 
 Transactions in foreign currency are recorded at the exchange rates
 prevailing on the date of transaction and monetary assets and
 liabilities in foreign currency are converted at the rates prevailing
 on the balance sheet date. Gains/losses including unrealised
 gains/losses are recognised in the Profit and Loss account.
 
 (k) Insurance claims:
 
 The expenses incurred against claims receivable are carried as claims
 recoverable pending the settlement of claims.
 
 (I) Taxes on income:
 
 Tax expense for the period comprises of current tax, deferred tax and
 fringe benefit tax. Deferred tax is recognised for timing differences,
 subject to the consideration of prudence.
 
 (m) Impairment of Assets:
 
 The carrying amount of Companys cash generating unit, is reviewed at
 each balance sheet date to determine whether there is any indication of
 impairment. If any such indication exists, the assets recoverable
 amount is estimated.
 
 An impairment loss is recognized whenever the carrying amount of an
 asset or its cash generating unit exceeds its recoverable amount. The
 recoverable amount is the greater of the assets net selling price and
 value in the use which is determined based on the estimated future cash
 flows discounted to their present values. All impairment losses are
 recognized 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 and is recognized in the Profit and Loss
 account.
 
 (n) Provisions and Contingencies:
 
 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
 will be required to settle the obligation, in respect of which reliable
 estimate can be made. Provisions (excluding retirement benefits) are
 not discounted to its present value and are determined based on best
 estimate required to settle the obligation at the balance sheet date.
 These are reviewed at each balance sheet date and adjusted to reflect
 the current best estimates. Contingent liabilities are not recognised
 but are disclosed in the notes to the financial statement. A contingent
 asset is neither recognised nor disclosed.
 
 (o) Provision for trade guarantees:
 
 The Companys sales of diesel generating sets and components carry
 warranty performance. The Company provides for such warranty
 obligations by way of trade guarantees at the time of recording sales.
 The same are reviewed at period end, and the surplus/shortfall is
 adjusted to the Profit and Loss account.
 
 (p) Provision for contingencies
 
 The Company provides for contingencies in the event of uncertainties
 arising from matters relating to the execution of projects that remain
 unresolved and operation and maintenance of power plants.
 
 (q) Cash Flow Statements
 
 Cash-flow statements are prepared in accordance with Indirect Method
 as explained in the Accounting Standard (AS-3)- Cash Flow Statements as
 prescribed under Section 211(3C) of the Indian Companies Act, 1956.
 
 (r) Cash and Cash Equivalents
 
 The Company considers all highly liquid financial instruments, which
 are readily convertible into cash and have original maturities of three
 months or less from the date of purchase, to be Cash equivalents.