1.1 Basis of preparation of financial statements
 
 The accompanying financial statements are prepared and presented under
 the historical cost convention, on the accrual basis of accounting and
 comply with the Accounting Standards prescribed by the Companies
 (Accounting Standards) Rules, 2006 and the relevant provisions of the
 Companies Act, 1956 to the extent applicable. The financial statements
 are presented in Indian rupees in millions.
 
 1.2 Use of estimates
 
 The preparation of the financial statements in conformity with the
 generally accepted accounting principles requires the management to
 make estimates and assumptions that affect the reported amount of
 assets, liabilities, revenues and expenses and disclosure of contingent
 liabilities on the date of the financial statements. Actual results
 could differ from the estimates. Any revision to accounting estimates
 is recognised prospectively in current and future periods.
 
 1.3 Revenue recognition
 
 (a) Investment banking fee income is recognised, on an accrual basis in
 accordance with the terms and contracts entered into between the
 Company and the counterparty.
 
 (b) Interest income is recognised on accrual basis.
 
 (c) Dividend income is recognised when the right to receive payment is
 established.
 
 (d) Profit earned on sale of investments is recognised on trade date
 basis. Profit/loss on sale of investments is determined based on the
 weighted average cost of the investments sold.
 
 (e) The rating support fee for the borrowing programme of the
 subsidiaries is accrued on straight line basis over the rating period
 and as per the contractual terms agreed with the subsidiaries.
 
 (f) Fee Income from subsidiaries for Brand Equity, Brand Protection,
 Brand Promotion services provided by the company is recognized on
 accrual basis in accordance with the contractual terms and conditions
 as agreed with the subsidiaries.
 
 (g) Portfolio management fees are accounted on accrual basis as
 follows:
 
 (i) In case of percentage based fees, in accordance with the Portfolio
 Management Agreement entered with the respective clients and with the
 SEBI Regulations as amended from time to time, on a quarterly basis.
 
 (ii) In case of return based fee, as a percentage of the annual profit,
 on an annual basis.
 
 1.4 Benchmark linked debentures
 
 The Company has issued certain non-convertible debentures, the return
 of which is linked to performance of specified indices/commodities over
 the period of the debenture. Such debentures have a component of an
 embedded derivative which is fair valued at year end. The resultant
 ‘net unrealised loss or gain on the fair valuation of these embedded
 derivatives is recognised in the profit and loss account.  The debt
 component of such debentures is measured at amortised cost using yield
 to maturity basis.
 
 1.5 Fixed assets and depreciation
 
 Fixed assets are stated at cost less accumulated depreciation. The cost
 of fixed assets comprises of purchase price and any attributable cost
 of bringing the asset to its working condition for its intended use.
 
 Depreciation is provided on a written down value basis from the date
 the asset is ready to use or put to use, whichever is earlier. In
 respect of assets sold, depreciation is provided upto the date of
 disposal.
 
 Leasehold improvements are amortised on a straight-line basis over the
 estimated useful lives of the assets or the period of lease, whichever
 is shorter.
 
 Intangibles such as software is amortised over a period of 3 years or
 its estimated useful life whichever is shorter.
 
 All fixed assets individually costing less than Rs. 5,000 are fully
 depreciated in the year of purchase.
 
 1.6 Impairment of assets
 
 The Company assesses at each balance sheet date whether there is any
 indication that an asset may be impaired based on internal/ external
 factors. If any such indication exists, the Company estimates the
 recoverable amount of the asset. If such recoverable amount of the
 asset is less than its carrying amount, the carrying amount is reduced
 to its recoverable amount. The reduction is treated as an impairment
 loss and is recognized in the profit and loss account. If at the
 balance sheet date there is an indication that a previously assessed
 impairment loss no longer exists, the recoverable amount is reassessed
 and the asset is reflected at the recoverable amount subject to a
 maximum of the depreciable historical cost.
 
 1.7 Investments
 
 Investments are classified into long term investments and current
 investments. Investments which are intended to be held for one year or
 more are classified as long term investments and investments which are
 intended to be held for less than one year are classified as current
 investments.
 
 Long term investments are carried at cost less diminution in value
 which is other than temporary, determined separately for each
 investment.
 
 Current investments are carried at lower of cost or fair value. The
 comparison of cost and fair value is done separately in respect of each
 investment. In case of investments in mutual funds, the net asset value
 of units declared by the mutual funds is considered as the fair value.
 
 1.8 Foreign currency transactions
 
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of the transaction. Exchange differences, if any
 arising out of transactions settled during the year are recognised in
 the profit and loss account of the year.
 
 Monetary assets and liabilities denominated in foreign currencies as at
 the balance sheet date are translated at the closing exchange rates on
 that date. The exchange differences, if any, are recognised in the
 profit and loss account and related assets and liabilities are
 accordingly restated in the balance sheet.
 
 1.9 Employee benefits
 
 The accounting policy followed by the company in respect of its
 employee benefit schemes in accordance with Accounting Standard 15
 (Revised 2005), is set out below:
 
 Provident fund
 
 The Company contributes to a recognised provident fund which is a
 defined contribution scheme. The contributions are accounted for on an
 accrual basis and recognised in the profit and loss account.
 
 Gratuity
 
 The Companys gratuity scheme is a defined benefit plan. The Companys
 net obligation in respect of the gratuity benefit is calculated by
 estimating the amount of future benefit that the employees have earned
 in return for their service in the current and prior periods, that
 benefit is discounted to determine its present value, and the fair
 value of any plan assets, if any, is deducted. The present value of the
 obligation under such benefit plan is determined based on actuarial
 valuation using the Projected Unit Credit Method. The obligation is
 measured at present values of estimated future cash flows. The
 discounted rates used for determining the present value are based on
 the market yields on government securities as at the balance sheet
 date.
 
 Benefits in respect of gratuity are funded with an Insurance Company
 approved by Insurance Regulatory and Development Authority (IRDA).
 
 Actuarial gains and losses are recognised immediately in the profit and
 loss account.
 
 Compensated absences
 
 The eligible employees of the Company are permitted to carry forward
 certain number of their annual leave entitlement to subsequent years,
 subject to a ceiling. The Company recognises the charge to the Profit &
 Loss account and corresponding liability on account of such non-vesting
 accumulated leave entitlement based on a valuation by an independent
 actuary.
 
 1.10 Taxation
 
 Income tax expense comprises current tax (i.e. amount of tax for the
 period determined in accordance with the Income Tax Act, 1961) and
 deferred tax charge or benefit (reflecting the tax effect of timing
 differences between accounting income and taxable income for the
 period).
 
 Current tax
 
 Provision for current tax is recognised based on estimated tax
 liability computed after adjusting for allowances, disallowances and
 exemptions in accordance with the Income Tax Act, 1961.
 
 Deferred taxation
 
 The deferred tax charge or benefit and the corresponding deferred tax
 liabilities and assets are recognised using the tax rates that have
 been enacted or substantially enacted as at the balance sheet date.
 Deferred tax assets are recognised only to the extent there is
 
 Deferred taxation (Continued)
 
 reasonable certainty that the asset can be realised in future; however,
 where there is unabsorbed depreciation or carried forward loss under
 taxation laws, deferred tax assets are recognised only if there is a
 virtual certainty of realisation of the assets. Deferred tax assets are
 reviewed as at each balance sheet date and written down or written up
 to reflect the amount that is reasonable/virtually certain (as the case
 may be) to be realised.
 
 Minimum Alternate Tax (MAT) credit
 
 MAT credit asset is recognized where there is convincing evidence that
 the asset can be realized in future.
 
 1.11 Operating leases
 
 Lease payments for assets taken on operating lease are recognised as an
 expense in the profit and loss account on a straight-line basis over
 the lease term.
 
 1.12 Earnings per share
 
 The Company reports basic and diluted earnings per share in accordance
 with Accounting Standard 20 - Earnings Per Share prescribed by the
 Companies (Accounting Standards) Rules, 2006. Basic earnings per share
 is computed by dividing the net profit after tax attributable to equity
 shareholders by the weighted average number of equity shares
 outstanding during the year.
 
 Diluted earnings per share reflect the potential dilution that could
 occur if securities or other contracts to issue equity shares were
 exercised or converted during the year. Diluted earnings per share is
 computed by dividing the net profit after tax by the weighted average
 number of equity shares and dilutive potential equity shares
 outstanding at year end.
 
 1.13 Employee stock option plans
 
 The Company follows the intrinsic value method to account for
 compensation cost of its stock based employee compensation plans.  The
 compensation cost is amortised on a straight-line basis.
 
 1.14 Provisions and contingencies
 
 The Company creates a provision when there is 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 for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources. When there is a possible obligation or
 a present obligation in respect of which the likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 
 Provisions are reviewed at each balance sheet date and adjusted to
 reflect the current best estimate. If it is no longer probable that the
 outflow of resources would be required to settle the obligation, the
 provision is reversed.
 
 Contingent assets are not recognised in the financial statements.
 However, contingent assets are assessed continually and if it is
 virtually certain that an economic benefit will arise, the asset and
 related income are recognised in the period in which the change occurs.
 
 3 SHARE CAPITAL
 
 Bonus:
 
 (a) during the F.Y. 2007-08: 44,916,806 equity shares of Re. 1 each
 (before consolidation of face value of equity share from Re. 1 per
 share to Rs. 5 per share) were allotted as fully paid up bonus shares
 by capitalisation of Rs. 44.92 million from securities premium account.
 
 (b) during the F.Y. 2007-08: 35,937,448 equity shares of Rs. 5 each
 were allotted as fully paid up bonus shares by capitalisation of Rs.
 179.69 million from securities premium account.
 
 (c) during the year: 375,495,590 equity shares of Re. 1 each (after
 split of face value of equity share from Rs. 5 to Re. 1 per share) were
 allotted as fully paid-up bonus shares by capitalisation of Rs. 2.60
 million from capital redemption reserve and Rs. 372.90 million from
 securities premium account.
 
 Consolidation:
 
 during the F.Y. 2007-08: 89,843,620 equity shares of Re. 1 each were
 consolidated into fully paid up 17,968,724 equity shares of Rs. 5 each.
 Split:
 
 during the year: 75,099,118 equity shares of Rs. 5 each were split into
 fully paid up 375,495,590 equity shares of Re. 1 each.