1.  Basis of Preparation:
 
 The financial statements of the company have been prepared in
 accordance with generally accepted accounting principles in India
 (Indian GAAP). The financial statements have been prepared under
 historical cost convention on accrual basis except in case of assets
 for which revaluation is carried out. The financial statements comply
 in all material respects with the Accounting Standards notified under
 the Companies Accounting Standard Rules, 2006 (as amended) and the
 relevant provisions of the Companies Act, 1956 of India (the
 Act). The accounting policies have been consistently applied by
 the Company, except for the change in accounting policy explained
 below.
 
 The operating cycle in case of projects division comprising of turnkey
 projects which forms a part of engineering segment is determined for
 each project separately based on the expected execution period of the
 contract. In case of the other divisions the company has ascertained
 its operating cycle as twelve months.
 
 (a)Terms/rights attached to equity shares
 
 The company has only one class of equity shares having a par value of
 Rs. 10 per share. Each holder of equity shares is entitled to one vote
 per share. The company declares and pays dividends in Indian rupees.
 The dividend proposed by the Boards of Directors is subject to the
 approval of the shareholders in the ensuing Annual General Meeting.
 
 During the year ended 31st March 2012, the amount of per share dividend
 recognised as distribution to equity shareholders is Rs. 2 (2010-2011 :
 Rs. 2)
 
 In the event of liquidation of the company, the holders of equity
 shares will be entitled to receive remaining assets of the company
 after distribution of preferential amounts. The distribution will be in
 proportion to the number of equity shares held by the shareholders.
 
 As per records of the company, including its register of
 shareholders/members and other declarations received from shareholders
 regarding beneficial interest, the above shareholding represents both
 legal and beneficial ownership of shares.
 
 (b) Aggregate number of share issued for consideration other than cash
 during the period of five years immediately preceding the reporting
 date.
 
 The company has issued 15,70,900 shares (2010-2011 : 20,15,700) during
 the period of five years immediately preceding the reporting date on
 exercise of options granted under the Employee Stock Option Scheme
 (ESOS) wherein part consideration was received in form of employee
 services.
 
 (c)Shares reserved for issued under ESOS
 
 For details of shares allotted under various Employee Stock Option
 Schemes (ESOS) and shares reserved for issue under the Employees Stock
 Option Scheme (ESOS) of the company please refer note 29.
 
 (a) Indian rupees loan from bank carries interest @ 13,00%. Indian
 rupees loan from bank is repayable in 17 quarterly installments of Rs.
 35,29,000 each except for Last Installment which is of Rs. 35,36,000.
 The loan is secured by First Charge by way of mortgage and
 hypothecation of all movable and immovable properties situated at
 Vashi, Goa and Ankleshwar, both present and future.
 
 (b) Indian rupees loan from bank taken for a specific project carries
 interest @ 11.75% to 13.00%. Indian rupees loan from bank is repayable
 within 20 months from the date of first disbursement or out of excess
 contract proceeds whichever is earlier. The loan is secured by pari
 passu first charge on project specific current Assets, both present and
 future.
 
 (c) Indian rupee vehicle loans from banks carries interest @ 12.00% to
 14.60% p.a. The loans are repayable in equal monthly installments along
 with interest, from the various dates of disbursements. The loans are
 secured by hypothecation of vehicles.
 
 (d) Finance lease obligation is secured by hypothecation of equipment''s
 taken on lease.
 
 (e) Deposits from Shareholders and Public carry interest @7.00% to
 8.00% p.a for deposits repayable after 1 year to 3 years from the
 respective dates of deposits.
 
 (a) Working Capital Loan from banks is secured by joint hypothecation
 of Book Debts and Stocks and collateral security by way of first charge
 on all immovable and movable properties and plant and machinery
 situated at Hosur and Patancheru and second charge on movable and
 immovable properties situated at Mumbai (Office Premises), Vashi and
 Goa. The Working Capital Loan is repayable on demand.
 
 (b) Short Term Loan from Banks carry interest @10.00% to 11.50% p.a.
 and are repayable within a year.
 
 1.  Buildings on Freehold Land Includes Ownership blocks, the cost of
 which includes:
 
 - Rs. 250 (2010-2011 : Rs. 250) being the value of 5 Shares (unquoted)
 of Rs. 50 each, fully paid up in Sunrise Co-operative Housing Society
 Limited.
 
 - Rs. 3,500 (2010-2011 : Rs. 3,500) being the value of 70 Shares
 (unquoted) of Rs. 50 each, fully paid up in Andheri Usha Milan
 Co-operative Housing Society Limited.
 
 2.  Buildings on Freehold Land Includes Ownership blocks acquired at
 Mumbai, the Society formation of which is in progress.
 
 Gross Book Value Rs. 62,16,250 (2010-2011 : Rs. 62,16,250)
 
 Net book value Rs. 45,24,854 (2010-2011 : Rs. 46,26,179)
 
 3.  Buildings on Freehold Land Includes Ownership blocks comprising of
 2 LIG flats (Nos. B-16 and B-17) and 1 MIG flat (No. B-14) at Hosur,
 the title deeds of which are awaited from authorities.
 
 Gross Book Value Rs. 76,882 (2010-2011 : Rs. 76,882)
 
 Net book value Rs. Nil (2010-2011 : Rs. Nil)
 
 4.  Capital Work in Progress includes amount of Rs. 25,33,481(2010-2011
 : Rs. 25,33,481) paid for acquiring furnished office premises, the
 ownership of which is under legal dispute for which transfer
 formalities are in progress.
 
 5.  Buildings on Freehold Land includes buildings given on operating
 lease :
 
 Gross Book Value Rs. Nil (2010-2011 : Rs. 3,34,69,098)
 
 Accumulated depreciation Rs. Nil (2010-2011 : Rs. 77,32,279)
 
 Depreciation for the year Rs. Nil (2010-2011 : Rs. 6,03,764)
 
 Net book value Rs. Nil (2010-2011 : Rs. 2,57,36,819)
 
 6.  Office Equipment includes data processing items taken on finance
 lease :
 
 Gross Book Value Rs. 59,50,081 (2010-2011: Nil)
 
 Depreciation for the year Rs. 2,59,020 (2010-2011: Nil)
 
 Net book value Rs. 56,91,061 (2010-2011: Nil)
 
 7.  Fixed assets pertaining to Discontinuing operations includes:
 
 Gross Book Value Rs. 5,05,67,568 (2010-2011: Rs. 3,22,16,454)
 
 Accumulated depreciation Rs. 2,91,92,080 (2010-2011: Rs. 2,62,18,330)
 
 Net book value Rs. 2,13,75,489 (2010-2011: Rs. 59,98,124)
 
 8.  EMPLOYEE BENEFITS
 
 A) The Company has a defined benefit gratuity plan. Every employee who
 has completed five years or more of service gets a gratuity on
 departure at 15 days salary (last drawn salary) for each completed year
 of service. The Scheme is funded to a separate Trust duly recognized by
 Income tax authorities.
 
 The following table summarise the components of net benefit expense
 recognized in the Profit and Loss Account and the funded status and
 amounts recognized in the Balance Sheet for the Gratuity Plan.
 
 Notes:
 
 a) Amounts recognized as an expense and included in note 23:
 
 (i) Leave Encashment in Salaries, Wages and Bonus Rs. 2,07,31,014
 (2010-2011 : Rs. 1,80,75,232)
 
 (ii) Gratuity in Contribution to Provident & Other Funds Rs.
 75,85,876 (2010-2011 : Rs. 62,75,112)
 
 b) The estimates of future salary increases considered in the actuarial
 valuation take account of inflation, seniority, promotion and other
 relevant factors such as supply and demand in the employment market.
 
 B) Defined Contribution Plan:
 
 Amount recognized as an expense and included in the note 23 -
 Contribution to Provident and Other Funds of Profit and Loss
 Account Rs. 3,52,67,951 (2010-2011 : Rs. 3,53,53,735)
 
 9 EMPLOYEE STOCK OPTION SCHEME (ESOS)
 
 ESOS 2001
 
 Pursuant to the resolution passed by the shareholders at the Annual
 General Meeting held on 27th September 2000, the Company has introduced
 ESOS for its directors and employees. The ESOS Compensation Committee
 formed for implementation of the scheme, in its meeting held on 20th
 July 2001, granted 3,84,500 options to eligible directors and employees
 of the Company at a price of Rs. 12.50 per share which constituted a
 discount of approximately 25% to the price as calculated on the basis
 of average of weekly closing price on The Stock Exchange, Mumbai for 13
 weeks prior to the date of the grant. Under the scheme, 25% of the
 granted options shall vest and become exercisable in July every year.
 Pursuant to this, Fourth 25% of the options vested in July 2005. The
 vested options were exercisable upto 20th July 2009.
 
 The Employee Stock Compensation Committee in its meeting on 8th August
 2002, further granted 536,100 options to directors and other employees
 at a price of Rs. 19.00 per share, which constituted a discount of
 approximately 25% to the price as calculated on the basis of average of
 weekly closing price on The Stock Exchange, Mumbai for 13 weeks prior
 to the date of the grant. As in the case of First grant, 25% of these
 options shall vest and become exercisable in August every year.
 Pursuant to this, the Fourth 25% of the options vested in August
 2006.The vested options were exercisable upto 8th August 2010.
 
 The Employee Stock Compensation Committee in its meeting held on 5th
 June 2007, further granted 300,000 options to directors and other
 employees at a price of Rs. 94.00 per share, which constituted a
 discount of approximately 25% to the price as calculated on the basis
 of average of weekly closing price on The Stock Exchange, Mumbai for 13
 weeks prior to the date of the grant. As in the case of First and
 Second grant, 25% of these options shall vest and become exercisable in
 June every year. Pursuant to this, Fourth 25% of the options will vest
 in June 2012.  The vested options are exercisable upto 5th June 2016.
 
 ESOS 2003
 
 Pursuant to the resolution passed by the shareholders at the Annual
 General Meeting held on 25th September 2003, the Employee Stock
 Compensation Committee in its meeting on 2nd April 2004 implemented the
 Second Employees Stock Options Scheme (ESOS 2003) and granted 6,50,000
 options to directors and other employees at a price of Rs. 19.00 per
 share, which constituted a discount of approximately 25% to the price
 as calculated on the basis of average of two weeks high and low of the
 share traded on The Stock Exchange, Mumbai prior to the date of the
 grant. Under the scheme 25% of these options shall vest and become
 exercisable in April every year. Pursuant to this, the Second 25% of
 the options vested in April 2006. Further, pursuant to Shareholders''
 approval at the Annual General Meeting held on 4th August 2006, the
 Employee Stock Compensation Committee decided to advance the date of
 vesting of balance 50% option. Pursuant to this, the Third and Fourth
 25% (in all 50%) of the options vested in October 2006. The vested
 options were exercisable upto 26th October 2010.
 
 The Employee Stock Compensation Committee in its meeting held on 5th
 June 2007, further granted 3,50,000 options to directors and other
 employees at a price of Rs. 94.00 per share, which constituted a
 discount of approximately 25% to the price as calculated on the basis
 of average of weekly closing price on The Stock Exchange, Mumbai for 13
 weeks prior to the date of the grant. As in the case of First grant,
 25% of these options shall vest and become exercisable in June every
 year. Pursuant to this, the Fourth 25% of the options will vest in June
 2012. The vested options are exercisable upto 5th June 2016.
 
 ESOS 2005
 
 Pursuant to the resolution passed by the shareholders at the Annual
 General Meeting held on 29th September 2005, the Employee Stock
 Compensation Committee at its meeting on 29th March 2006 implemented
 the Third Employees Stock Options Scheme (ESOS 2005) and granted
 5,00,000 options to directors and other employees at a price of Rs.
 67.00 per share, which constituted a discount of approximately 25% of
 the closing market price prior to the date of the grant. Under the
 scheme, the options shall vest after one year from the date of the
 grant. The vested options were exercisable upto 29th March 2011.
 
 The Employee Stock Compensation Committee in its meeting held on 24th
 July 2006, further granted 5,00,000 options to directors and others
 employees at a price of Rs. 54.50 per share, which constituted a
 discount of approximately 25% of the closing market price prior to the
 date of the grant. As in the case of the First grant, the options shall
 vest after one year from the date of the grant. The vested options are
 exercisable upto 24th July 2011.
 
 ESOS 2008
 
 Pursuant to the resolution passed by the shareholders at the Annual
 General Meeting held on 26th September 2008, the Employee Stock
 Compensation Committee at its meeting held on 13th October 2008
 implemented the Fourth Employees Stock Options Scheme (ESOS 2008) and
 granted 12,00,000 options to directors and other employees at a price
 of Rs. 58.20 per share which constituted a discount of approximately
 25% of the closing market price prior to the date of the grant. Under
 the scheme, the options shall vest after one year from the date of the
 grant.  The vested options are exercisable upto 13th October 2013.
 
 The method of settlement of the above options is equity settled.
 
 III. Notes:
 
 (a) The Company''s operations are organized into three business
 segments, namely:
 
 Engineering Division - comprising of water treatment plants, spares and
 services in connection with the plants.
 
 Chemicals - comprising of resins, water treatment chemicals, sugar
 chemicals and paper chemicals.
 
 Consumer Products - comprising of domestic water purifiers.
 
 (b) The Segment Revenue in the geographical segments considered for
 disclosure are as follows:
 
 Revenue within India includes sales to customers located within India
 and earnings in India. Revenue outside India includes sales to
 customers located outside India and earnings outside India.
 
 10.  RELATED PARTY DISCLOSURES (As identified by the Management):
 
 Where control exists
 
 a) Subsidiary Companies  
 
 Ion Exchange Enviro Farms Limited
 
 Watercare Investments (India) Limited
 
 Aqua Investments (India) Limited ,
 
 Ion Exchange Asia Pacific Pte. Ltd., Singapore
 
 Ion Exchange Asia Pacific (Thailand) Limited
 
 IEI Environmental Management (M) Sdn. Bhd., Malaysia
 
 Ion Exchange Environment Management (BD) Limited, Bangladesh
 
 Ion Exchange Infrastructure Limited
 
 Ion Exchange LLC, USA
 
 Ion Exchange & Company LLC, Oman
 
 Ion Exchange WTS (Bangladesh) Limited
 
 Ion Exchange Projects and Engineering Limited (w.e.f. 11.04.2011)
 
 Global Composites and Structurals Limited (w.e.f. 29.03.2012)
 
 
 Others
 
 b) Associates 
 
 Ion Exchange Services Limited
 
 Aquanomics Systems Limited
 
 IEI Water-Tech (M) Sdn. Bhd., Malaysia *
 
 Astha Technical Services Limited
 
 Total Water Management Services (I) Limited
 
 Ion Exchange PSS Co. Limited, Thailand *
 
 Ion Exchange Financial Products Pvt. Limited *
 
 c) Joint Venture 
 
 Ion Exchange Waterleau Limited
 
 d) Entity having significant influence 
 
 IEI Shareholding Trusts
 
 e) Key Management Personnel   Mr. Rajesh Sharma - Chairman & Managing
                               Director
 
                               Mr. Dinesh Sharma - Executive Director 
 
                               Mr. Aankur Patni - Executive Director
 
 f) Relatives of Key           Mr. Mahabir Patni - Father of 
                               Mr. Aankur Patni
 Management Personnel          Mrs. Nirmala Patni - Mother of 
                               Mr. Aankur Patni
 
                               Mrs. Aruna Sharma - Wife of 
                               Mr. Rajesh Sharma 
 
                               Mrs. Poonam Sharma - Wife of Mr. Dinesh 
                               Sharma 
 
                               Mrs. Nidhi Patni - Wife of Mr. Aankur 
                               Patni 
 
                               Ms. Pallavi Sharma - Daughter of 
                               Mr. Rajesh Sharma
 
 11.  In early 90s, the Company had given loans to Employees'' IEI
 Shareholding Trusts. The amount outstanding as at 31st March 2012 is
 Rs.  23,09,53,000 (2010-2011 : Rs. 23,50,56,000). The Company has
 carried out valuation of the assets held by the Trusts. Considering the
 valuation, book value of the corpus of the Trusts as on the Balance
 Sheet date and future opportunities, the Management does not anticipate
 any ultimate loss arising out of these loans.
 
 12.  The Company has an investment of Rs. 54,70,000 (2010-2011 : Rs.
 54,70,000) in Equity Shares and 15,00,000 (2010-2011 : 15,00,000) 7%
 Secured Redeemable Non-Convertible Debentures of Rs. 100 each fully
 paid up, in Ion Exchange Enviro Farms Limited (IEEFL), a subsidiary
 company, as at 31st March 2012 and it has also granted Loans and
 Advances aggregating Rs. 6,62,65,730 (2010-2011 : Rs. 4,05,62,592) as
 at 31st March 2012 to IEEFL. As at 31st March 2012, the accumulated
 losses of IEEFL have substantially exceeded its paid-up share capital.
 IEEFL has undertaken various cost reduction programs and it expects
 better returns in the coming years from its organic farming activities,
 bio-pesticides and bio-fertilizers marketing. Moreover, IEEFL has
 adequate assets in the form of developed and undeveloped land and the
 Redeemable Non-Convertible Debentures are being secured by way of
 mortgage of office premises. Also, the Supreme Court of India has
 admitted IEEFL''s appeal against the Security Appellate Tribunal Order
 of refunding monies to investors with return and winding-up of scheme.
 In the month of March 2008, the matter was listed for filing reply by
 SEBI. SEBI did not file their reply and asked for time. The matter was
 adjourned thereafter. SEBI has since filed their reply and the matter
 will come up for hearing in due course. IEEFL has been legally advised
 that it has got a fair chance of successfully contesting the appeal. In
 view of the foregoing, the Management is of the opinion, that there is
 no diminution, other than temporary, in value of investment and the
 advances are fully recoverable. Hence, presently no provision is
 considered necessary.
 
 13.  Capital expenditure incurred on Research and Development during
 the year is Rs. 36,07,067 (2010-2011 : Rs. 24,57,441). Revenue
 expenditure of Rs 3.81,42,618 (2010-2011 : Rs. 3,47,39,727) incurred on
 Research and Development has been expensed to Profit and Loss Account
 under various expense heads.
 
 14.  LEASE
 
 a Office Equipment''s includes data processing equipments obtained on
 finance lease. The lease term is for 4 years and can be renewed at the
 option of the company. There is no escalation clause in the lease
 agreement. There are no subleases Future minimum lease payment (MLR)
 under finance leases together with the present value of the net MLP are
 as follows
 
 b Certain Office Premises are obtained on operating lease There are
 escalation clauses in the lease agreement. All the lease agreements are
 cancellable and there are no restrictions imposed by the lease
 arrangements. There are no sub-leases
 
 15.  CAPITAL AND OTHER COMMITMENTS
 
 Estimated amount of contracts (net of advances) remaining to be
 executed on Capital Account not provided for is Rs. 1,98,81,429
 (2010-2011 : Rs. 2,96,97,595).
 
 16, CONTINGENT LIABILITIES
 
 Contingent Liabilities not provided for:
 
 (a) Guarantee given by the Company on behalf of:
 
 i) Subsidiaries - Rs. 30,66,76,925 (2010-2011 : Rs. 29,72,42,500)
 
 ii) Associates - Rs. 7,00,00,000 (2010-2011 : Rs. 7,00,00,000)
 
 iii) Joint Venture-Rs. 8,00,00,000(2010-2011 : Rs. 8,00,00,000)
 
 iv) Others - Rs. 38,88,000(2010-2011 : Rs. 38,88,000)
 
 (b) Demand raised by authorities against which the Company has filed an
 appeal.
 
 i) Income Tax - Rs. 83,01,220 (2010-2011 : Rs. 1,89,38,294)
 
 ii) Excise Duty - Rs. 16,78,600 (2010-2011 : Rs. 30,52,000)
 
 iii) Service Tax - Rs. 16,74,395 (2010-2011 : Rs. 41,33,445)
 
 iv) Customs Duty (to the extent ascertainable) - Rs. 22,58,117
 (2010-2011 : Rs. 22,58,117)
 
 (c) Claims against the Company arising in the course of business not
 acknowledged as debts (to the extent ascertainable) Rs. 1,94,94,696
 (2010-2011 : Rs. 1,88,82,928).
 
 
 Note: Future cash outflows/uncertainities, if any, in respect of above
 are determinable only on receipt of judgments/decisions pending with
 various forums/authorities.
 17. The Company has initiated the process of obtaining confirmation
 from suppliers regarding the registration under the Micro, Small and
 Medium Enterprises Development Act, 2006. The suppliers are not
 registered wherever the confirmation are received and in other cases,
 the Company is not aware of their registration status and hence
 information relating to outstanding balance or interest due is not
 disclosed as it is not determinable
 
 17.  During the year 98,250 (2010-2011 : 6,19,650) equity shares were
 allotted to employees and directors under ESOS 2005 and ESOS 2008 on
 27th May 2011 and 28th July 2011. Accordingly, dividend of Rs. 2.00 per
 share (20%) declared at the Annual General Meeting held on 27th
 September 2011 was also paid to those shareholders (book closure date
 being 27th September 2011).
 
 18.  Backcharges represents reimbursement of costs incurred by
 customers on the Company''s behalf in the course of contract execution.
 
 19.  Book values of certain long term unquoted investments, aggregating
 to Rs. 14,25,36,619 «re lower than its cost.
 
 Considering the strategic and long term nature of the aforesaid
 investments, and asset base and business plan of the investee
 companies; in the opinion of the Management, the decline in the book
 value of the aforesaid investments is of temporary nature, requiring no
 provision.
 
 20.  DISCONTINUING OPERATIONS
 
 The Board of Directors of the Company at their meeting held on 22nd
 February 2011, had accorded their approval for the proposal to sell its
 Project Division (covering domestic turnkey projects) as a going
 concern under a ‘Slump Sale'' basis to Ion Exchange Projects and
 Engineering Limited, a wholly owned subsidiary company. On 11th April
 2011, the Company has received approval of the shareholders for the
 transfer of the Project Division (covering domestic turnkey projects)
 by way of postal ballot. The Company is in the process of completing
 all the necessary formalities for the above mentioned transfer. The
 Project Division is being reported as a part of Engineering segment
 under Segment disclosures as given in note 31.
 
 21.  Ion Exchange Asia Pacific Pte. Ltd., subsidiary company and Global
 Composites and Structural Limited, subsidiary company have during the
 year allotted 7,61,000 and 9,53,368 shares respectively against the
 receivables.
 
 22.  Till the year ended 31 March 2011, the company was using
 pre-revised Schedule VI to the Companies Act 1956, for preparation and
 presentation of its financial statements. During the year ended 31
 March, 2012, the revised Schedule VI notified under the Companies Act
 1956, has become applicable. The company has reclassified previous
 years figures to conform to this year''s classification.