1) BASIS FOR PREPARATION OF ACCOUNTS
 
 These financial statements have been prepared to comply in all material
 respects with all the applicable accounting principles in India, the
 applicable accounting standards notified under section 211(3C) of the
 Companies Act, 1956, Accounting Standard 30, Financial Instruments:
 Recognition and Measurement issued by the Institute of Chartered
 Accountants of India to the extent it does not contradict any other
 accounting standard referred to Section 211 (3C) of the Act, other
 recognised accounting practices and policies and the relevant
 provisions of the Companies Act, 1956.
 
 2) REVENUE RECOGNITION
 
 Domestic and export sales are recognised on transfer of significant
 risks and rewards to the customer which takes place on dispatch of
 goods from the factory / stockyard / storage area and port
 respectively.
 
 3) FIXED ASSETS
 
 a) Fixed assets (except freehold land which is carried at cost) are
 carried at cost of acquisition or construction or at manufacturing cost
 (in case of own manufactured assets) in the year of capitalisation less
 accumulated depreciation.
 
 b) Assets acquired under finance lease are capitalized at the lower of
 their fair value and the present value of minimum lease payments.
 
 4 BORROWING COSTS
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of qualifying assets are capitalised till
 the month in which each asset is put to use as part of the cost of that
 asset.
 
 5) DEPRECIATION / AMORTISATION
 
 a) Fixed assets except leasehold assets viz land is depreciated on the
 straight line method on a pro-rata basis from the month in which each
 asset is put to use.
 
 Depreciation has been provided at the rates prescribed in Schedule XIV
 to the Companies Act, 1956 except for certain fixed assets where, based
 on the management''s estimate of the useful life of the assets, higher
 depreciation has been provided on the straight line method over the
 following useful lives:
 
 Plant and Machinery 8 – 11 Years
 
 Dies and Jigs 4 Years
 
 Electronic Data Processing Equipments 3 Years
 
 In respect of assets whose useful life has been revised, the
 unamortised depreciable amount is charged over the revised remaining
 useful life of the assets.
 
 b) Leasehold assets viz land is amortised over the period of lease.
 
 c) All assets, the individual written down value of which at the
 beginning of the year is Rs. 5,000 or less, are depreciated at the rate
 of 100%. Assets purchased during the year costing Rs. 5,000 or less are
 depreciated at the rate of 100%.
 
 d) Lump sum royalty is amortized on a straight line basis over 4 years
 from the start of production of the related model.
 
 6) INVENTORIES
 
 a) Inventories are valued at the lower of cost, determined on the
 weighted average basis, and net realisable value.
 
 b) Tools are written off over a period of three years except for tools
 valued at Rs. 5,000 or less individually which are charged off to revenue
 in the year of purchase.
 
 c) Machinery spares (other than those supplied along with main plant
 and machinery, which are capitalised and depreciated accordingly) are
 charged to revenue on consumption except those valued at Rs. 5,000 or
 less individually, which are charged off to revenue in the year of
 purchase.
 
 7) INVESTMENTS
 
 Current investments are valued at the lower of cost and fair value.
 Long-term investments are valued at cost except in the case of a
 permanent diminution in their value, in which case the necessary
 provision is made.
 
 8) RESEARCH AND DEVELOPMENT
 
 Revenue expenditure on research and development is charged off against
 the profit of the year in which it is incurred. Capital expenditure on
 research and development is shown as an addition to fixed assets and
 depreciated accordingly.
 
 9) FOREIGN CURRENCY TRANSLATIONS AND DERIVATIVE INSTRUMENTS
 
 a) Foreign currency transactions are recorded at the exchange rates
 prevailing at the date of the transaction. Exchange differences arising
 on settlement of transactions are recognised as income or expense in
 the year in which they arise.
 
 b) At the balance sheet date, all monetary assets and liabilities
 denominated in foreign currency are reported at the exchange rates
 prevailing at the balance sheet date by recognising the exchange
 difference in profit and loss account.  However, the exchange
 difference arising on foreign currency monetary items that qualify and
 are designated as hedge instruments in a cash flow hedge is initially
 recognized in ‘hedge reserve’ and subsequently transferred to profit &
 loss account on occurrence of the underlying hedged transaction.
 
 c) Effective April 1, 2008, the Company adopted Accounting Standard
 -30, Financial Instruments: Recognition and Measurement issued by The
 Institute of Chartered Accountants of India to the extent the adoption
 does not contradict the accounting standards notified under Section
 211(3C) of the Companies Act, 1956 and other regulatory requirements.
 
 d) Derivative contracts (except for forward foreign exchange contracts
 where underlying assets or liabilities exist) are fair valued at each
 reporting date. The Company records the gain or loss on effective
 hedges, if any, in a hedge reserve, until the transaction is complete.
 On completion, the gain or loss is transferred to the profit and loss
 account of that period.  Changes in fair value relating to the
 ineffective portion of the hedges and derivatives not qualifying or not
 designated as hedge are recognised in the profit and loss account in
 the accounting period in which they arise.
 
 e) In case of forward foreign exchange contracts where an underlying
 asset or liability exists at the balance sheet date, the difference
 between the forward rate and the exchange rate at the inception of the
 contract is recognised as income or expense over the life of the
 contract. Profit or loss arising on cancellation or renewal of a
 forward contract is recognised as income or expense in the year in
 which such cancellation or renewal is made.
 
 10) EMPLOYEE BENEFIT COSTS Short - Term Employee Benefits:
 
 Recognised as an expense at the undiscounted amount in the profit and
 loss account of the year in which the related service is rendered.
 
 Post Employment and Other Long Term Employee Benefits :
 
 (i) The Company has Defined Contribution Plans for post employment
 benefits namely Provident Fund and Superannuation Fund which are
 recognised by the income tax authorities. These Funds are administered
 through Trusts and the Company’s contributions thereto are charged to
 revenue every year. The Company also maintains an insurance policy to
 fund a post-employment medical assistance scheme, which is a Defined
 Contribution Plan administered by The New India Insurance Company
 Limited. The Company’s contribution to State Plans namely Employees’
 State Insurance Fund and Employees’ Pension Scheme are charged to
 revenue every year.
 
 (ii) The Company has Defined Benefit Plans namely Gratuity, Interest on
 Provident Fund and Retirement Allowance for employees and Other Long
 Term Employee Benefits i.e. Leave Encashment / Compensated Absences,
 the liability for which is determined on the basis of an actuarial
 valuation at the end of the year based on Projected Unit Credit Method.
 The Gratuity Fund is recognised by the income tax authorities and is
 administered through a Trust.
 
 Termination benefits are recognised as an expense immediately.
 
 Gains and losses arising out of actuarial valuations are recognised
 immediately in the Profit and Loss Account as income or expense.
 
 11) CUSTOMS DUTY
 
 Custom duty available as drawback is initially recognised as purchase
 cost and is credited to consumption on export of vehicles.
 
 12) GOVERNMENT GRANTS
 
 Government grants are recognised in the profit and loss account in
 accordance with the related scheme and in the period in which these are
 accrued.
 
 13) TAXES
 
 Tax expense for the year, comprising current tax and deferred tax, is
 included in determining the net profit/ (loss) for the year.
 
 Current tax is recognised based on assessable profit computed in
 accordance with the Income Tax Act and at the prevailing tax rate.
 
 Deferred tax is recognised for all timing differences. Deferred tax
 assets are carried forward to the extent it is reasonably / virtually
 certain that future taxable profit will be available against which such
 deferred tax assets can be realised. Deferred tax assets are reviewed
 at each balance sheet date and written down/ written up to reflect the
 amount that is reasonably/ virtually certain (as the case may be) to be
 realized.
 
 Deferred tax assets and liabilities are measured at the tax rates that
 have been enacted or substantively enacted at the balance sheet date.
 
 14) DIVIDEND INCOME
 
 Dividend from investments is recognized when the right to receive the
 payment is established and when no significant uncertainty as to
 measurability or collectability exits.
 
 15) INTEREST INCOME
 
 Interest income is recognised on the time basis determined by the
 amount outstanding and the rate applicable and where no significant
 uncertainty as to measurability or collectability exists.
 
 16) IMPAIRMENT OF ASSETS
 
 At each balance sheet date, the Company assesses whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount. If the carrying
 amount of the asset exceeds its recoverable amount, an impairment loss
 is recognised in the profit and loss account to the extent the carrying
 amount exceeds the recoverable amount.
 
 17) ROYALTY
 
 a) The company pays / accrues for royalty expense in accordance with
 the relevant agreements with Suzuki Motor Corporation.
 
 b) The lump sum royalty incurred towards obtaining technical assistance
 / technical know how to manufacture a new model/ car, ownership of
 which rests with the technical know how provider, is recognised as an
 intangible asset in accordance with the requirements of Accounting
 Standard-26 “Intangible Assets”. Royalty payable on sale of products
 i.e.  running royalty is charged to profit and loss account as and when
 incurred.
 
 18) PROVISIONS AND CONTINGENCIES
 
 The Company creates 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. A
 disclosure of contingent liability is made when there is a possible
 obligation or a present obligation that will probably not require
 outflow of resources or where a reliable estimate of the obligation
 cannot be made.