a. Change in Accounting Policy Presentation and Disclosure of
During the year ended the 31st March 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
Company, for preparation and presentation of its financial statements.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of these financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The Company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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 the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Difference between the actual results and
estimates are recognized in the period in which the results are known /
c. Revenue Recognition
Income is accounted for on accrual basis in accordance with Accounting
Standard (AS) 9 - Revenue Recognition.
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the applicable interest rate.
Dividend income on investments is accounted for when the right to
receive the dividend is established.
Long term investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management.
e. Tangible Fixed Assets
Tangible fixed assets are stated at historical cost less provision for
impairment losses, if any and depreciation.
f. Depreciation on Tangible Fixed Assets
Depreciation on tangible fixed assets is calculated on a straight-line
basis using the rates arrived at based on the useful lives estimated by
the management, or those prescribed under the Schedule XIV to the
Companies Act, 1956, whichever is higher. The Company has used the
following rates / useful life to provide depreciation on its fixed
i) Computer hardware systems are depreciated uniformly over a useful
life of 3 years.
ii) Assets costing up to Rs. 5,000 are fully depreciated in the year of
g. Impairment of Assets
Assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset''s
carrying amount exceeds its recoverable amount being the higher of the
asset''s net selling price and its value in use. Value in use is based
on the present value of the estimated future cash flows relating to the
asset. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (i.e. cash generating units).
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
Previously recognized impairment losses are reversed where the
recoverable amount increases because of a favorable change in the
estimates used to determine the recoverable amount since the last
impairment was recognized. A reversal of an asset''s impairment loss
is limited to its carrying amount that would have been determined (net
of depreciation or amortization), had no impairment loss been
recognized in prior years.
h. Tax on Income
i) Current corporate tax is provided on the results for the year after
considering applicable tax rates and laws.
ii) Deferred tax is provided on timing differences between tax and
accounting treatments that originate in one period and are expected to
be reversed or settled in subsequent periods. Deferred tax assets and
liabilities are measured using the enacted / substantively enacted tax
rates and laws for continuing operations.
Deferred tax assets in the event of unabsorbed depreciation and carry
forward losses under tax laws, that exceed the deferred tax liability,
are recognized only where there is virtual certainty of realization.
Deferred tax assets on other accounts are recognized only to the extent
there is reasonable certainty of realization.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date to reassess realization.
iii) MAT credit is recognized 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. In the year in which the Minimum
Alternative Tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the Statement of Profit and Loss
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 the Company will pay normal Income Tax during the
i. Provisions and Contingent Liabilities
Provisions are recognized for present obligations, of uncertain timing
or amount, arising as a result of a past event where a reliable
estimate can be made and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation.
Where it is not probable that an outflow of resources embodying
economic benefits will be required or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability unless
the possibility of outflow of resources embodying economic benefits is
Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more uncertain future events,
are also disclosed as contingent liabilities unless the possibility of
outflow of resources embodying economic benefits is remote.
j. Earnings Per Share
Basic earnings per share is computed by dividing the net profit after
tax for the period attributable to equity shareholders (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
k. Cash and Cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Company considers all highly liquid investments
with a maturity at the date of purchase of three months or less and
that are readily convertible to known amounts of cash to be cash