1.1 GENERAL INFORMATION
 
 The Company is primarily in the business of manufacturing, purchase and
 sale of motor vehicles and spare parts (automobiles). The other
 activities of the Company comprise facilitation of Pre-Owned Car sales,
 Fleet Management and Car Financing. The Company is a public company
 listed on the Bombay Stock Exchange (BSE) and the National Stock
 Exchange (NSE).
 
 1.2 BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
 
 These financial statements have been prepared in accordance with the
 generally accepted accounting principles in India under the historical
 cost convention on an accrual basis. 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 with 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.
 
 All assets and liabilities have been classified as current or
 non-current as per the Company''s normal operating cycle and other
 criteria set out in the Schedule VI to the Companies Act, 1956. Based
 on the nature of products and the time between the acquisition of
 assets for processing and their realisation in cash and cash
 equivalents, the Company has ascertained its operating cycle as 12
 months for the purpose of current - non current classification of
 assets and liabilities.
 
 1.3 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.
 
 1.4 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 leases are capitalised at the lower of
 their fair value and the present value of minimum lease payments.
 
 1.5 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.
 
 1.6 DEPRECIATION / AMORTISATION
 
 a) Fixed assets except leasehold land are 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 lives 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 Equipment 3 Years
 
 In respect of assets whose useful lives has been revised, the
 unamortised depreciable amount is charged over the revised remaining
 useful lives of the assets.
 
 b) Leasehold 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 per cent. Assets purchased during the year costing Rs. 5,000 or
 less are depreciated at the rate of 100 per cent.
 
 d) Lump sum royalty is amortised on a straight line basis over 4 years
 from the start of production of the related model.
 
 1.7 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 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 to revenue in the year of
 purchase.
 
 1.8 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
 decline in value other than temporary, in which case the necessary
 provision is made.
 
 1.9 RESEARCH AND DEVELOPMENT
 
 Revenue expenditure on Research and Development is charged against the
 profit for the year in which it is incurred. Capital expenditure on
 Research and Development is shown as an addition to fixed assets and
 depreciated accordingly.
 
 1.10 FOREIGN CURRENCY TRANSLATIONS AND DERIVATIVE INSTRUMENTS
 
 a) Foreign currency transactions are recorded at the exchange rates
 prevailing at the date of the transactions.  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
 recognised in ''hedge reserve'' and subsequently transferred to the
 statement of profit & loss on occurrence of the underlying hedged
 transaction.
 
 c) Effective 1st April, 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 with the accounting standards notified
 under Section 211(3C) of the Companies Act, 1956 and other regulatory
 requirements.
 
 d) All derivative contracts (except for forward foreign exchange
 contracts where underlying assets or liabilities exist) are fair valued
 at each reporting date. For derivative contracts designated in a
 hedging relationship, 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 statement of
 profit and loss of that period.  Changes in fair value relating to the
 ineffective portion of the hedges and derivatives not qualifying or not
 designated as hedges are recognised in the statement of profit and loss
 in the accounting period in which they arise.
 
 e) In the case of forward foreign exchange contracts where an
 underlying asset or liability exists, 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.
 
 1.11 EMPLOYEE BENEFIT COSTS
 
 Short - Term Employee Benefits:
 
 Recognised as an expense at the undiscounted amount in the statement of
 profit and loss for 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
 benefit namely the Superannuation Fund which is recognised by the
 income tax authorities. This Fund is administered through a Trust set
 up by the Company and the Company''s contribution thereto is 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
 statement of profit and loss every year.
 
 (ii) The Company has Defined Benefit Plans namely Gratuity, 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
 and any shortfall in the size of the fund maintained by the Trust is
 additionally provided for in the statement of profit and loss. The
 Gratuity Fund and Provident Fund are recognised by the income tax
 authorities and is administered through Trusts set up by the Company.
 
 Termination benefits are immediately recognised as an expense.
 
 Gains and losses arising out of actuarial valuations are recognised
 immediately in the statement of profit and loss as income or expense.
 
 1.12 CUSTOMS DUTY
 
 Custom duty available as drawback is initially recognised as purchase
 cost and is credited to consumption of materials on exported vehicles.
 
 1.13 GOVERNMENT GRANTS
 
 Government grants are recognised in the statement of profit and loss in
 accordance with the related schemes and in the period in which these
 accrue.
 
 1.14 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.
 
 Minimum Alternative Tax 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 specified period.
 
 Deferred tax assets / Minimum Alternative Tax credit 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
 realised.
 
 Deferred tax assets and liabilities are measured at the tax rates that
 have been enacted or substantively enacted at the balance sheet date.
 
 1.15 DIVIDEND INCOME
 
 Dividend from investments is recognised when the right to receive the
 payment is established and when no significant uncertainty as to
 measurability or collectability exits.
 
 1.16 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.
 
 1.17 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 statement of profit and loss to the extent the
 carrying amount exceeds the recoverable amount.
 
 1.18 ROYALTY
 
 a) The Company pays / accrues for royalty in accordance with the
 relevant agreements with the technical know-how providers.
 
 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.
 
 1.19 PROVISIONS AND CONTINGENCIES
 
 Provisions: Provisions are recognised when there is a present
 obligation as a result of a past event, it is probable that an outflow
 of resources embodying economic benefits will be required to settle the
 obligation and there is a reliable estimate of the amount of the
 obligation. Provisions are measured at the best estimate of the
 expenditure required to settle the present obligation at the balance
 sheet date and are not discounted to its present value.
 
 Contingent Liabilities: Contingent liabilities are disclosed when there
 is a possible obligation arising from past events, the existence of
 which will be confirmed only by the occurrence or non occurrence of one
 or more uncertain future events not wholly within the control of the
 Company or a present obligation that arises from past events where it
 is either not probable that an outflow of resources will be required to
 settle or a reliable estimate of the amount cannot be made, is termed
 as a contingent liability.
 
 1.20 CASH AND CASH EQUIVALENTS
 
 In the cash flow statement, cash and cash equivalents includes cash in
 hand, demand deposits with banks, other short-term highly liquid
 investments with original maturities of three months or less.