1) System of Accounting
 
 i) The Company follows the mercantile system of accounting and
 recognises income and expenditure on an accrual basis except in case of
 signifcant uncertainties.
 
 ii) Financial Statements are prepared under the Historical cost
 convention. These costs are not adjusted to refect the impact of
 changing value in the purchasing power of money.
 
 iii) Estimates and Assumptions used in the preparation of the financial
 statements are based upon managements evaluation of the relevant facts
 and circumstances as of the date of the Financial Statements, which may
 difer from the actual results at a subsequent date.
 
 2) Revenue recognition:
 
 Income:
 
 The Company recognises income on accrual basis. However, where the
 ultimate collection of the same lacks reasonable certainty, revenue
 recognition is postponed to the extent of uncertainty.
 
 (1) a) Interest income is accrued over the period of the loan. However,
 where a loan is classifed as a non-performing asset, as per the
 prudential norms prescribed by RBI and to the extent applicable to the
 company as a NBFC and guidelines framed by the management, interest
 thereon is recognised only when it is actually received.
 
 b) Income from debentures and bonds is accrued over the maturity of the
 security, net of amortisation of premium/discount, where intended to be
 held for a long term, thereby recognising the implicit yield to
 maturity, with reference to the coupon dates. However, income is
 accrued only where interest is serviced regularly and is not in
 arrears, as per the applicable prudential norms prescribed for NBFCs by
 the Reserve Bank of India and the guidelines framed by the management.
 
 (2) Dividend is accrued in the year in which it is declared whereby a
 right to receive is established.
 
 (3) profit/loss on sale of investments is recognised on the contract
 date.
 
 3) Fixed Assets and Depreciation
 
 (A) Fixed Assets
 
 Fixed Assets except freehold land are carried at cost of acquisition or
 construction cost including pre-operative expenses, less accumulated
 depreciation and amortisation.
 
 (B) Depreciation and Amortisation:
 
 (a) Leasehold land:
 
 Premium on leasehold land is amortised over the period of lease.
 
 (b) On other Fixed Assets
 
 Depreciation on all assets is provided on  Straight Line basis  in
 accordance with the provisions of Section 205 (2) (b) of the Companies
 Act 1956, in the manner and at the rates specifed in Schedule XIV to
 the said Act.
 
 i.  Depreciation on additions is being provided on prorata basis from
 the month of such additions.  ii.  Depreciation on assets sold,
 discarded or demolished during the year is being provided at their
 rates upto the month in which such assets are sold, discarded or
 demolished.
 
 4) Investments
 
 a) Fixed income securities remaining with the company after transfer of
 demerged undertakings are carried at their fair market values as at 1
 April 2007 where the carrying costs of such investments were higher on
 that date, less amortisation of premium/ discount thereafter, as the
 case may be.
 
 b) Current investments representing fxed income securities with a
 maturity less than 1 year and those intended to be held for a period
 less than 1 year from the date on which the investment is made are
 stated at cost adjusted for amortisation and diminution with reference
 to realisable value, as necessary.
 
 c) Other Fixed income securities, other than current, are carried at
 cost, less amortisation of premium/discount, as the case may be, and
 provision for diminution, if any, as considered necessary.
 
 d) Investments other than fxed income securities are valued at cost of
 acquisition, less provision for diminution as necessary.
 
 e) Investments other than current investments, made by the Company are
 intended to be held for long-term, hence diminutions in value of quoted
 investments are generally not considered to be of a permanent nature.
 
 f) The management has laid out guidelines for the purpose of assessing
 likely impairments in investments and for making provisions based on
 given criteria. Appropriate provisions are accordingly made, which in
 the opinion of the management are considered adequate and also
 considering the prudential norms specifed by the Reserve Bank of India,
 applicable to the company in this behalf.
 
 5) employee Benefits
 
 a) Privilege Leave entitlements
 
 Privilege leave entitlements are recognised as a liability, in the
 calendar year of rendering of service, as per the rules of the company.
 As accumulated leave can be availed and/or encashed at any time during
 the tenure of employment the liability is recognised at actuarially
 determined value by an Appointed Actuary.
 
 b) Gratuity
 
 Payment for present liability of future payment of gratuity is being
 made to approved Gratuity Fund, which fully covers the same under Cash
 Accumulation Policy of the Life Insurance Corporation of India.
 However, any defcit in Plan Assets managed by LIC as compared to the
 actuarial liability is recognised as a liability immediately.
 
 c) Superannuation
 
 Defned Contribution to Superannuation fund is being made as per the
 Scheme of the Company.
 
 d) Provident Fund Contributions are made to Companys Provident Fund
 Trust. Defcits, if any, of the fund as compared to aggregate liability
 is additionally contributed by the company and recognised as an
 expense.
 
 e) Defned Contribution to employees Pension Scheme 1995 is made to
 Government Provident Fund Authority.
 
 6) Tax
 
 a) Provision for Tax is made for the current accounting period
 (reporting period) on the basis of the taxable profits computed in
 accordance with the Income Tax Act, 1961.
 
 b) Deferred Tax resulting from timing diference between book profits and
 taxable profits are accounted for to the extent deferred tax liabilities
 are expected to crystalise with reasonable certainty. However, deferred
 tax assets (representing unabsorbed depreciation or carried forward
 losses) are recognised, if and only if there is virtual certainty that
 there would be adequate future taxable income against which such
 deferred tax assets can be realised. Deferred tax is recognised on
 adjustments to revenue reserves to the extent the adjustments are
 allowable as deductions in determination of taxable income and they
 would reverse out in future periods.
 
 7) Provisions and Contingent Liabilities
 
 The Company creates a provision when there is present obligation as a
 result of a past event that probably requires an outfow of resources
 and a reliable estimate can be made of the amount of the obligation. A
 disclosure for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outfow of resources. When there is a possible obligation or
 a present obligation in respect of which the likelihood of outfow of
 resources is remote, no provision or disclosure is made.