A.  Basis of preparation of financial statements
 
 The accounts of the Company are prepared and presented under the
 historical cost convention on the accrual basis of accounting in
 accordance with the accounting principles generally accepted in India
 (GAAP) and comply with the mandatory accounting standards notifed
 under the Companies (Accounting Standards) Rules, 2006 and with the
 relevant provisions of the Companies Act, 1956.  The financial
 statements are presented in Indian rupees rounded off to the nearest
 million.
 
 The preparation of financial statements in conformity with GAAP 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 financial statements and the results of
 operations during the reporting periods. Examples of such estimate
 include future obligations under employee retirement beneft plans,
 income taxes, useful lives of fixed assets and intangible assets,
 provision for doubtful debts, etc.  Management believes that the
 estimates used in the preparation of the financial statements are
 prudent and reasonable. Actual results could vary from these estimates.
 Appropriate changes in estimates are made as the management becomes
 aware of the changes in circumstances surrounding the estimates. Any
 revision to accounting estimates is recognised in the period in which
 such results are known/materalised. Effect of material changes is
 disclosed in the notes to the financial statements.
 
 B.  a.  Fixed Assets and Depreciation
 
 (i) Fixed Assets are stated at original cost net of tax/duty credits
 availed, if any, less accumulated depreciation/
 amortisation/impairment. The cost of fixed assets includes effect of
 exchange differences on long term foreign currency borrowings, freight
 and other incidental expenses related to the acquisition and
 installation of the respective assets. Borrowing costs directly
 attributable to fixed assets which necessarily take a substantial period
 of time to get ready for their intended use are capitalized. In case of
 fixed assets acquired at the time of amalgamation of certain entities
 with Company, the same are recognised at book value in case of
 amalgamation in the nature of merger and at book value / fair value in
 case of amalgamation in the nature of purchase in line with Accounting
 Standard 14 (AS 14) - Accounting of Amalgamations.
 
 Insurance spares / standby equipment are capitalised as part of the
 mother assets and are depreciated at the applicable rates, over the
 remaining useful life of the mother assets.
 
 Interest on loans and other financial charges in respect of qualifying
 assets and expenditure incurred on start up and commissioning of the
 project and / or substantial expansion, including the expenditure
 incurred on test runs and Trial Runs (Net of trial run receipts, if
 any) up to the date of commencement of commercial production are
 capitalised.
 
 (ii) Depreciation is provided on Straight Line Method at rates
 mentioned and in the manner specifed in Schedule XIV to the Companies
 Act, 1956 (as amended), on the original cost/ acquisition cost of
 assets and read with the statement as mentioned herein under. Certain
 plants were classifed as continuous process plants from the financial
 year ended 31st March,2000 and such classification has been done on
 technical assessment, (relied upon by the auditor being a technical
 matter) and depreciation on such assets has been provided accordingly.
 
 Depreciation, in respect of assets added/installed up to December 15,
 1993, is provided at the rates applicable at the time of
 additions/installations of the assets, as per the Companies Act, 1956
 and depreciation, in respect of assets added/installed during the
 subsequent period, is provided at the rates, mentioned in Schedule XIV
 to the Companies Act, 1956 read with Notifcation dated 16th December,
 1993 issued by Department of Company Affairs, Government of India
 except for the following classes of fixed assets which are depreciated
 over the useful life estimated as under;
 
 a.  R&D related Equipment & Machineries: ten years.
 
 b.  Motor Vehicles: fve years.
 
 c.  Motor Vehicles under Finance Lease: Tenure of Lease or fve years
 whichever is shorter.
 
 d.  Computer & Information Technology related assets: three to fve
 years.
 
 e.  Certain employee perquisite – related assets: fve years, being the
 period of the perquisite scheme.
 
 The depreciation rates so arrived at are not lower than the rates
 prescribed in Schedule XIV to the Companies Act,1956.
 
 Depreciation on assets added/disposed off during the year has been
 provided on pro-rata basis with reference to the date of
 addition/disposal.
 
 Depreciation on exchange fuctuation capitalised is charged over the
 remaining useful life of assets in view of the option exercised by the
 Company for accounting the exchange differences arising on reporting of
 long term foreign currency monetary items in line with Companies
 (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11
 (AS-11) – The Effects of Changes in Foreign Exchange Rates.  Also
 refer Note 1.(F). of Schedule N).
 
 b.  Intangible, Market Authorisation and Amortisation
 
 Intangible assets are recorded at the consideration paid for
 acquisition. Intangible assets are amortised over their estimated
 useful lives subject to a maximum period of ten years on straight-line
 basis, commencing from the date the asset is available to the Company
 for its use.
 
 Cost incurred for product development leading to Market Authorisations
 are recognised as intangible assets when it is probable that the future
 economic Benefits that are attributable to the asset will flow to the
 enterprise and the cost of the asset can be measured reliably. Such
 intangible assets are amortised on a straight-line basis over a period
 of fve years from the date of regulatory approval and the product going
 off-patent. Subsequent expenditures on development of such products are
 added to the cost of intangibles when it is probable that the
 expenditure will enable the asset to generate future economic Benefits
 in excess of its originally assessed standard of performance and the
 expenditure can be measured and attributed to the asset reliably.
 
 Expenditure for acquisition and implementation of Software systems is
 recognised as part of the intangible assets and amortised on
 straight-line basis over a period of fve years being the useful life of
 the software systems.
 
 c.  Leased Assets
 
 (i) Long term leasehold land is capitalised and is not amortised in
 view of the long term tenure of the un-expired lease period/option of
 conversion to freehold at the expiry of the lease tenure.
 
 (ii) Other leased assets:
 
 a) Assets acquired under fnance lease are capitalized at the inception
 of the lease at lower of their fair value and the present value of the
 minimum lease payment in line with the Accounting Standard
 19(AS-19)-Leases .
 
 b) In respect of operating leases, lease rentals are charged to Profit
 and Loss Account.
 
 C.  Valuation of Inventories
 
 Inventories are valued at lower of cost or net realisable value except
 scrap, which is valued at net estimated realisable value.
 
 The methods of determining cost of various categories of inventories
 are as follows:
 
 Raw materials Weighted average method
 
 Stores and spares Weighted average method
 
 Work-in-process Variable Cost at weighted average and fnished goods
 including an appropriate share (manufactured) of variable and fixed
 production overheads. Fixed production overheads are included based on
 normal capacity of production facilities.
 
 Finished goods Actual cost of purchase (traded)
 
 Goods in transit Actual cost of purchase
 
 Cost includes all direct costs, cost of conversion and appropriate
 portion of variable and fixed production overheads and such other costs
 incurred as to bring the inventory to its present location and
 condition inclusive of excise duty wherever applicable. Cost formula
 used is based upon weighted average cost.
 
 D.  Investments
 
 Long Term quoted investments (non-trade) if any, are valued at cost
 unless there is a decline other than temporary in their value as at the
 date of Balance Sheet.
 
 Unquoted investments in subsidiaries being of long term and of
 strategic in nature are valued at cost and no loss is recognised for
 the fall, if any, in their net worth, unless the diminution in value is
 other than temporary. Investment in Foreign Subsidiary Companies are
 expressed in Indian currency at the rates prevailing on the date when
 the remittance for the purpose was made/ foreign currency balance lying
 abroad was used, as the case may be.
 
 Current Investments are valued at Lower of cost and fair value.
 
 E.  Income Tax
 
 Current Tax
 
 Current tax expense is based on the provisions of Income Tax Act, 1961
 and judicial interpretations thereof as at the Balance Sheet date and
 takes into consideration various deductions and exemptions to which the
 Company is entitled to as well as the reliance placed by the Company on
 the legal advices received by it.
 
 Provision for current income taxes and advance taxes arising in the
 same jurisdiction are presented in the Balance Sheet after offsetting
 on an assessment year basis.
 
 Deferred Tax
 
 Deferred tax charge or credit refects the tax effects of timing
 differences between accounting income and taxable income for the
 period. The deferred tax charge or credit and the corresponding
 deferred tax liabilities or assets are recognised using the tax rates
 that have been enacted or substantively enacted by the Balance Sheet
 date.  Deferred tax assets are recognised only to the extent there is
 reasonable certainty that the assets can be realised in future;
 however, where there is unabsorbed depreciation or carry forward of
 losses, deferred tax assets are recognised only if there is a virtual
 certainty of realisation of such assets. Deferred tax assets are
 reviewed at each Balance Sheet date and are written-down or written-up
 to refect the amount that is reasonably/virtually certain (as the case
 may be) to be realised. The Company offsets deferred tax assets and
 deferred tax liabilities relating to taxes on income levied by the same
 governing tax authorities.
 
 Minimum Alternate Tax
 
 Minimum Alternate Tax (MAT) credit is recognised as an asset only when
 and to the extent there is convincing evidence that the Company will
 pay normal income tax during the specifed period. In the year in which
 MAT credit becomes eligible to be recognized as an asset in accordance
 with the recommendation contained in the Guidance Note on Accounting
 for Credit Available in respect of Minimum Alternative Tax under The
 Income Tax Act, 1961 issued by the Institute of Chartered Accountants
 of India, the said asset is created by way of a credit to the Profit and
 Loss Account and shown as MAT Credit Entitlement. The Company reviews
 the same at each Balance Sheet date and writes down the carrying amount
 of MAT Credit Entitlement to the extent there is no longer convincing
 evidence to the effect that Company pay normal income tax during the
 specifed period.
 
 F.  Foreign Currency Conversions/ Translation
 
 i) Initial Recognition: Foreign currency transactions are recorded in
 the reporting currency, by applying to the foreign currency amount the
 exchange rate between the reporting currency and the foreign currency
 on/or closely approximating to the date of the transaction.
 
 ii) Conversion: Foreign currency monetary items are reported using the
 closing rate. Non-monetary items which are carried in terms of
 historical cost denominated in a foreign currency, are reported using
 the exchange rate at the date of the transaction; and non-monetary
 items which are carried at fair value or other similar valuation
 denominated in a foreign currency are reported using the exchange rates
 that existed when the values were determined.
 
 iii) Exchange Differences: The Company has opted for accounting the
 exchange differences arising on reporting of long term foreign currency
 monetary items in line with Companies (Accounting Standards) Amendment
 Rules 2009 on Accounting Standard 11 (AS-11) – The Effects of Changes
 in Foreign Exchange Rates notifed by the Ministry of Corporate Affairs
 on 31st March, 2009. Accordingly the effect of exchange differences as
 updated on reporting date, on foreign currency borrowings of the
 Company is adjusted to cost of fixed assets to the extent it relates to
 utilisation of funds for acquisition of depreciable capital assets and
 the balance is accumulated in Foreign Currency Monetary Item
 Translation Difference Account (FCMITDA) and amortised during the
 balance period of such long term liability but not later than 31st
 March, 2011.
 
 Exchange differences arising on the settlement of monetary items not
 covered above, or on reporting such monetary items of the Company at
 rates different from those at which they were initially recorded during
 the year, or reported in previous financial statements, are recognized
 as income or as expenses in the year in which they arise.
 
 iv) Forward Exchange Contracts: Monetary Assets and Liabilities are
 restated at the rate prevailing at the period end or at the spot rate
 at the inception of forward contract where forward cover for specifc
 asset/liability has been taken and in respect of such forward contracts
 the difference between the contract rate and the spot rate at the
 inception of the forward contract is recognised as income or expense in
 Profit & Loss Account over the life of the contract. All other
 outstanding forward contracts on the closing date are mark to market
 and resultant loss is recognised as expense in the Profit and loss
 Account. Mark to market gains, if any, are ignored.
 
 G.  Provisions, Contingent Liabilities and Contingent Assets
 
 The Company recognises a provision when there is a present obligation
 as a result of a past event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of the
 obligation. Contingent
 
 Liabilities are disclosed in respect of possible obligations that may
 arise from past events but their existence is confrmed by the
 occurrence or non-occurrence of one or more uncertain future events not
 wholly within the control of the Company. Contingent Assets are not
 recognised/ disclosed. Provisions, Contingent Liabilities and
 Contingent Assets are reviewed at each Balance Sheet Date.
 
 H.  Research & Development
 
 Research costs are expensed as incurred and presented under the natural
 heads of expenditure.
 
 Development cost including regulatory cost and legal expenses leading
 to Market Authorisation relating to the new and improved product and/or
 process development is recognised as an intangible asset to the extent
 that it is expected that such asset will generate future economic
 Benefits, adequate technical, financial and other resources required to
 complete the development and to use or sell the asset are available and
 the expenditure attributable to the asset during its development can be
 measured reliably.
 
 I.  Employee Benefits
 
 (i) Short-term employee Benefits: All employee Benefits falling due
 wholly within twelve months of rendering the services are classifed as
 short-term employee Benefits, which include Benefits like salaries,
 wages, short-term compensated absences, performance incentives, etc.
 and are recognised as expenses in the period in which the employee
 renders the related service.
 
 (ii) Post-employment Benefits: Post employment beneft plans are
 classifed into defned contribution plans and defned Benefits plans in
 line with the requirements of AS 15 on Employee Benefits.
 
 a.  Gratuity and Leave encashment
 
 Gratuity and leave encashment which are defned Benefits are recognised
 in the Profit and Loss Account based on actuarial valuation using
 projected unit credit method as at Balance Sheet date by an independent
 actuary. Actuarial gains and losses arising from the experience
 adjustment and change in actuarial assumption are immediately
 recognized in the Profit and Loss account as income or expense. The
 gratuity liability for certain employees of some of the units of the
 Company is funded with Life insurance Corporation of India.
 
 b.  Superannuation
 
 Certain employees of Company are also participants in the
 superannuation plan (''the Plan''), a defned contribution plan.
 Contribution made by the Company to the Plan during the year is charged
 to Profit and Loss Account.
 
 c.  Provident Fund
 
 i) The Company makes contribution to the VAM EMPLOYEES'' PROVIDENT FUND
 TRUST for most of its employees in India, which is a defned beneft
 plan to the extent that the Company has an obligation to make good the
 shortfall, if any, between the return from the investments of the trust
 and the notifed interest rate.  The Company''s obligation in this regard
 is determined by an independent actuary and provided for if the
 circumstances indicate that the Trust may not be able to generate
 adequate returns to cover the interest rates notifed by the Government.
 The Company''s contribution towards Provident Fund is charged to Profit
 and Loss Account.
 
 ii) For other employees, Provident Fund is deposited with Regional
 Provident Fund Commissioner. This is treated as defned contribution
 plan. Company''s contribution to the Provident Fund is charged to Profit
 & Loss Account.
 
 d) Other Long Term Employee Benefits: All employee Benefits (other than
 post-employment Benefits and termination Benefits) which do not fall due
 wholly within twelve months after the end of the period in which the
 employees render the related services are determined based on actuarial
 valuation carried out at each Balance Sheet date.
 
 J.  Borrowing Costs
 
 Borrowing costs are recognized in the Profit & Loss Account in the
 period in which it is incurred, except where the cost is incurred for
 acquisition, construction or production of an asset that takes a
 substantial period of time to get ready for its intended use in which
 case it is capitalized upto the date the assets are ready for their
 intended use. Ancillary costs incurred in connection with the
 arrangement of borrowings are amortized over the period of such
 borrowings.
 
 K.  Revenue Recognition
 
 Revenue from sale of products is recognised when the significant risks
 and rewards of ownership of the products have been transferred to the
 buyer, recovery of the consideration is probable and the amount of
 revenue can be measured reliably. Revenues include excise duty and are
 shown net of sales tax and value added tax, if any.
 
 Revenue from contract manufacturing is recognized on a proportionate
 completion basis.
 
 Refundable fees received in respect of fixed-price contracts are
 deferred and recognized as revenue in the period in which all
 contractual obligations are met and the contingency is resolved.
 
 Dividend income is recognized when the right to receive the income is
 established. Income from interest on deposits, loans and interest
 bearing securities is recognized on time proportionate method.
 
 Any sales for which the Company has acted as an agent without assuming
 the risks and rewards of ownership have been reported on a net basis.
 
 Sale of utility is recognised on delivery of the same to the consumers
 and no significant uncertainty exists as to its realisation.
 
 Export incentives/ Benefits are accounted for on accrual basis and where
 recovery is probable.
 
 L.  Premium on Foreign Currency Convertible Bonds (FCCBs)
 
 Premium payable on redemption of Foreign Currency Convertible Bonds
 (FCCBs) is charged against securities premium account over the tenure
 of FCCBs.
 
 M.  Segment Reporting
 
 The accounting policies adopted for segment reporting are in line with
 accounting policies of the Company. Revenues, Expenses, Assets and
 Liabilities have been identifed to segments on the basis of their
 relationship to operating activities of the segments (taking in account
 the nature of products and services and risks & rewards associated with
 them) and internal management information systems and the same is
 reviewed from time to time to realign the same to conform to the
 Business Units of the Company.  Revenues, Expenses, Assets and
 Liabilities, which are common to the enterprise as a whole and are not
 allocable to segments on a reasonable basis, have been treated as
 Common Revenues/Expenses/Assets/Liabilities, as the case may be.
 
 N.  Earnings Per share
 
 The basic earnings per share is calculated by dividing the net Profit
 after tax for the year by the weighted average number of equity shares
 outstanding during the year. For the purpose of calculating diluted
 earnings per share, net Profit after tax during the year and the
 weighted average number of shares outstanding during the year are
 adjusted for the effect of all dilutive potential equity shares. The
 dilutive potential equity shares are deemed converted as of the
 beginning of the year unless they have been issued at a later date. The
 dilutive potential equity shares are adjusted for the proceeds
 receivable had the shares been actually issued at fair value (i.e.
 average market value of the outstanding shares). Anti dilutive effect
 of any potential equity shares is ignored.
 
 O.  Impairment of Fixed Assets
 
 The Company assesses at each Balance Sheet date whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount of the asset. If
 such recoverable amount of the asset or the recoverable amount of the
 cash generating unit to which the assets belongs is less than the
 carrying amount, the carrying amount is reduced to its recoverable
 amount. The reduction is treated as an impairment loss and is
 recognised in the Profit and Loss Account.
 
 An assessment is also done at each Balance Sheet date whether there is
 any indication that an impairment loss recognized for an asset in prior
 accounting periods may no longer exist or may have decreased. If any
 such indications exist, the asset''s recoverable amount is estimated.
 The carrying amount of the fixed asset is increased to the revised
 estimate of its recoverable amount but only to the extent that the
 increased carrying amount does not exceed the carrying amount that
 would have been determined had no impairment loss been recognized for
 the asset in previous periods. A reversal of impairment loss is
 recognized in the Profit & Loss Account.
 
 P.  Employee Stock Option Schemes
 
 In accordance with the Securities and Exchange Board of India
 Guidelines, in respect of the stock options granted pursuant to the
 Company''s Stock Option Scheme, the intrinsic value, if any, of the
 option being the excess of the market price, of share over the exercise
 price of the option, at the date of grant of option, is treated as
 discount and accounted for as employee compensation cost and amortised
 on a straight-line basis over the vesting period.