Nature of Operation:
 
 Hindustan Motors Limited having its manufacturing facilities at
 Uttarpara, Tiruvallur and Pithampur, is primarily engaged in the
 manufacture & sale of Motor Vehicles, Spare Parts & accessories thereof
 and Components, Steel Products etc. The Company is also engaged in
 Trading of Motor vehicles, Spare parts and Components.
 
                                                           Rs. in lacs 
                                         March 31,2011   March 31,2010
 
 2.  Contingent Liabilities not 
 provided for in respect of :
 
 (a) Claims & Government demands 
 against the Company not acknowledged as
 debts.
 
 i) Excise Duty                                6291.39         5987.69
 
 ii) Sales Tax                                  802.25        10408.09
 
 iii) Customs Duty                              373.50          362.87
 
 iv) Service Tax                                958.99          350.46
 
 v) Others                                      734.60          837.30
 
 The Company does not expect any major 
 impact to arise out of the above
 claims/demands.
 
 Against the above claims / demands, 
 payments have been made under
 protest and / or debts have been 
 withheld by the respective parties, to
 the extent of Rs. 426.19 lacs 
 (Rs. 2531.80 lacs).
 
 Included in the above are contingent 
 liabilities to the extent of Rs.
 1638.17 lacs (Rs. 1571.17 lacs) relating 
 to the pre transfer period of
 the erstwhile Power Unit Plant and Power 
 Products Division of the Company, which 
 were transferred to AVTEC Limited in 
 June 2005. However, demands to the 
 extent of Rs. 1171.54 lacs 
 (Rs. 1171.54 lacs) are covered by 
 counter guarantees by the customers.
 
 (b) Outstanding Bank Guarantees for 
 import of materials and other
 accounts.                                      544.92          598.52
 
 (c) Differential Duty on import of Capital goods under Export Promotion
 Capital Goods Scheme is Rs. 21.80 lacs (Rs. 18.96 lacs).
 
 (d) Bonus for the years 1963-64 to 1967-68 at Hindmotor unit which is
 under adjudication (amount indeterminate).  The Company contends that
 no liability exists in this regard under the Payment of Bonus Act,
 1965.
 
 (e) Demands for incremental Dearness Allowance during the years 2001 to
 2007 at Hindmotor Unit which are under adjudication (amount not
 ascertained). However, majority of the employees unions have filed
 joint petition for withdrawal of the case.
 
 (f) The Company is under Corporate Debt Restructuring Scheme. In view
 of recent circular about windfall profit / extra ordinary income
 triggering the right of recompense and the Companys sale of property
 at Halol, Gujarat, the Lenders of the Company have quantified the claim
 of recompense of interest at Rs. 6554 lacs. The Company has requested
 the Lenders to take a reasonable view based on Companys financial
 position and past track record, which the Lenders have agreed to
 consider. Pending final decision in the matter, the Company has paid a
 sum of Rs. 1500 lacs to the Lenders in April 2011, which has been
 accounted for under Interest expense, in these accounts. In view of the
 above, no further provision there against is considered necessary by
 the Management.
 
 3.  (a) Term Loans Rs. 1758.66 lacs (Rs. 1758.66 lacs) from the
 Financial Institutions and Banks together with interest and other
 charges thereon, are secured by a mortgage on a part of the Companys
 land with other immovable assets thereon, both present and future and
 by way of a hypothecation charge over all the movable assets including
 book debts of the Company.
 
 (b) Cash Credit facilities from Banks Rs.  302.45 lacs (Rs. 301.05
 lacs), and buyers credit Rs. 1387.63 lacs (Rs. Nil) together with
 interest and other charges thereon are secured by a mortgage on a part
 of the Companys land together with other immovable assets thereon,
 both present and future, and by way of a hypothecation charge over all
 the movable assets including book debts of the Company.
 
 (c) Short Term Loan Rs. Nil (Rs. 1009.56 lacs) from a Bank together
 with interest thereon, is secured by way of a hypothecation charge over
 all the movable assets including book debts of the Company.
 
 (d) Short Term Loan Rs. 604.10 lacs (Rs. Nil) from a Bank together with
 interest thereon, is secured by way of subservient charge on all the
 movable fixed assets and the current assets of the Company.
 
 (e) The Charges referred to in (a), (b) and (c) above rank pari-passu
 amongst various Financial Institutions and Banks, and (a) & (b) are yet
 to be additionally secured by way of pledge of 4550000 equity shares of
 HM Export Ltd., a subsidiary company.
 
 4.  The break-up of net deferred tax liability as on 31st March 2011 is
 as under :
 
 In terms of accounting policy disclosed vide Note No. 1 (XVI) above,
 Deferred tax assets of Rs. 2879.30 lacs (Rs. 3188.82 lacs) arising on
 account of carried forward unabsorbed business losses have not been
 recognised in he accounts.
 
 5.  Derivative contracts outstanding as at year end are as follows :
 
 (i) In respect of cross currency JPY / USD of JPY 750 lacs (JPY / USD
 of JPY 6400 lacs).
 
 (ii) Forward cover of USD / INR of USD 22.25 lacs (USD / INR of USD 66
 lacs).
 
 The above derivative / forward contracts have been taken to cover the
 exchange risk on import payment liability of the Company.
 
 6.  Consumption of Raw materials, stores and spare parts includes
 profit / loss on sale thereof.
 
 7.  In certain cases, excise duty on items transferred from one
 division to another for captive use has been accounted for based on
 actual payments at provisional rates. Additional liability, if any, in
 this regard will be accounted for on determination of the final rates,
 but it will have no impact on the Companys profitability, since the
 same will be claimable as Cenvat benefit by the transferee unit.
 
 8.  Excise duty on stocks represents differential excise duty on
 opening and closing inventories.
 
 9.  Shareholders of the Company have approved Capital reduction on
 16th November, 2010 through postal ballot which was duly confirmed by
 the Honble High Court at Calcutta vide its Order dated 15th December,
 2010 and Certificate of Registration of the said Order was issued by
 the Registrar of Companies, West Bengal on 11th January, 2011. Pursuant
 to this, debit balance in Profit & Loss Account as on 31st March, 2010
 has been reduced by Rs. 8375.88 lacs by reducing the paid up value of
 the Equity Shares from Rs. 10/- each to Rs. 5/- each with effect from
 11th January, 2011 resulting in reduction of Rs. 8058.60 lacs in the
 Subscribed and Paid up Equity Share Capital from Rs. 16117.20 lacs
 (16,11,71,993 Equity Shares of Rs. 10/- each) to Rs. 8058.60 lacs
 (16,11,71,993 Equity Shares of Rs. 5/- each) and adjusting the
 Securities Premium Account to the extent of Rs. 317.28 lacs.
 
 10.  The movement in Provisions for Warranties during the year is as
 follows:
 
 A Provision is recognized for expected warranty claims on products
 based on managements estimate of present obligation in this regard
 during the warranty period, computed on the basis of past experience of
 the level of repairs.
 
 11.  Disclosure under Accounting Standard-15 (Revised) on Employee
 Benefits
 
 B.  Defined Benefit Plan
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets Gratuity on terms not
 lower than the amount payable under the Payment of Gratuity Act, 1972.
 The aforesaid scheme is funded with an Insurance Company. The following
 table summarises the components of net benefit expenses recognised in
 profit & loss account and the funded status and amount recognised in
 the balance sheet for the respective plan.
 
 Note:
 
 a) The estimates of future salary increase considered in actuarial
 valuation, takes account of inflation, seniority, promotion and other
 relevant factors, such as supply and demand in the employment market
 
 b) The Company expects to contribute Rs. 120.00 lacs (Rs. 120.00 lacs)
 to Gratuity fund in 2011-2012.
 
 c) Experience adjustment on plan assets & liabilities has been
 considered in the valuation report as certified by the actuary
 
 12.  Related Party Disclosures:
 
 (a) Name of the related parties:
 
 Subsidiary Companies           HM Export Ltd.
 
                                Hindustan Motor Finance Corporation Ltd.
 
                                Hindustan Motors Ltd., U.S.A.
 
 Associate Company              AVTEC Limited
 
 Key Management Personnel       Mr. R. Santhanam, 
                                Managing Director (Upto 18th May 2010)
 
                                Mr. Manoj Jha, 
                                Managing Director (From 19th May 2010)
 
 13. As the Companys business activity falls within a single primary
 business segment. Viz; Automobiles in India, the disclosure
 requirement of Accounting Standard-17 Segment Reporting as notified
 by Companies (Accounting Standards) Rules, 2006(as amended) is not
 applicable.
 
 14. Quantitative Information :
 
 (a) Includes excise duty, sales tax, export incentives, insurance
 claims, transportation & delivery charges and after adjusting
 incentives / discounts and returns against sales made in earlier years
 Rs. 76.74 lacs
 
 (Rs. 77.20 lacs) and including items capitalised Rs. 97.64 lacs (Rs.
 298.27 lacs).
 
 (b) The installed capacity of the plants is not balanced in different
 manufacturing stages. As a result, in many stages, the capacity is more
 whereas in some stages, it is less than that mentioned above.
 
 (c) Includes Alloy Steel and Mild Steel Forgings & Grey Iron Castings.
 
 (d) Including 1423 Tonnes (1746 Tonnes) used for own consumption and
 for different end-products.
 
 (e) At estimated sale value.
 
 (f) Sales value of own manufactured spare parts being unascertainable,
 the same have been grouped under this head.
 
 (g) Installed Capacities are certified by the Management and accepted
 as correct by the Auditors.  (h) Licensed Capacity has not been given
 above in view of the delicensing of various products.
 
 15.  Previous years figures (including those which are in brackets)
 have been regrouped / rearranged wherever necessary