i. Basis of preparation of financial statements:
The accompanying financial statements are prepared under the historical
cost convention in accordance with the Indian Generally Accepted
Accounting Principles (GAAP) comprising the mandatory accounting
standards issued by the Institute of Chartered Accountants of India and
the provisions of the Companies Act, 1956, on accrual basis. These
accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted by the company.
All assets and liabilities have been classified as current or
noncurrent as per the Company''s normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act, 1956.
ii. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known/materialized.
iii. Fixed Assets :
All Fixed Assets are stated at cost of acquisition, less accumulated
depreciation. Cost is inclusive of freight, installation cost, duties,
taxes and other direct incidental expenses.
Subsequent expenditure relating to an item of fixed asset are added to
its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Intangible assets are stated at cost of acquisition, net of accumulated
amortization and accumulated impairment loss if any. Intangible assets
are amortised on straight line basis over their estimated useful lives.
iv. Capital Work-in-progress
Capital Work-in-progress is carried at cost, comprising direct cost and
related incidental expenses.
The carrying amount of assets is reviewed at each balance sheet date
for any indication of impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying amount of an asset
materially exceeds its recoverable amount. The recoverable amount is
greater of assets net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their
present value at the weighted average cost of capital.
Depreciation has been provided on straight line method on pro-rata
basis at the rates prescribed in Schedule XIV of the Companies Act,
Stocks of Shares are valued at lower of Cost or Estimated Net
Estimated Net Realisable Value: In case realisable value is not
ascertainable due to non- availability of Quotation in the Stock
Markets, the value of such Shares is adopted at Rs.1.00 per Share.
Cost: In case, Cost is not ascertainable due to non availability of lot
details and its cost, the cost of such shares are adopted at previous
Unquoted Investments: In the opinion of the management Investment in
the Unquoted Investment in Associates and other Companies are of Long
Term nature meant to be held permanently and any diminution in the
latest available book value as compared to the cost of such shares is
considered temporary by the management and hence not provided (not
ix. Revenue Recognition :
Brokerage income earned on Secondary market operations is accounted
(inclusive method) on trade dates.
Depository & related income is accounted (inclusive method) on accrual
x. Other Income:
Interest income is recognized on time proportion basis taking into
account the amount outstanding and the rate applicable.
Dividend income is recognized when right to receive dividend is
xi. Employee Benefits :
a) Short term employee benefits :
Employee Benefits such as salaries, allowances, provident fund and
non-monetary benefits which fall due for payment within a period of
twelve months after rendering of services, are charged as expense to
the statement of profit and loss in the period in which the service is
b) Post- employment benefits :
Employee Benefits under defined benefit plans, such as gratuity which
falls due for payment after a period of twelve months from rendering
services or after completion of employment, are measured by projected
unit credit method, on the basis of actuarial valuations carried out by
third party actuaries at each balance sheet date. The Company''s
obligation recognized in the balance sheet represents the present value
of obligations as reduced by the fair value of plan assets, where
Actuarial Gains and losses are recognized immediately in the Profit and
c) Termination benefits:
Termination benefits in the nature of voluntary retirement benefits are
recognized in the statement of profit and loss as and when incurred.
Xii. Taxation :
Tax expenses comprises of current and deferred. Current Tax is measured
at the amount expected to be paid to the tax authorities in accordance
with the Indian Income Tax Act, 1961. Provision for current tax is made
on the basis of Taxable Income of the current accounting year in
accordance with Income Tax Act, 1961.
Deferred Tax is recognized for all the timing differences. The Company
is providing and recognizing deferred tax on timing differences between
taxable income and accounting income subject to consideration of
Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and liability on a net basis.
Deferred tax assets and deferred tax liability are offset when there is
legally enforceable right to set off assets against liabilities
representing current tax and where the deferred tax assets and the
deferred tax liabilities relate to taxes on income levied by the same
governing taxation laws.
Xiii. Provisions and Contingent Liabilities:
The Company recognizes 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
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. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Xiv. Earnings per share:
In determining Earnings per share, the company considers the net profit
after tax and includes the post tax effect of any extra ordinary items.
The number of shares used in computing basic earnings per share is the
weighted average number of shares outstanding during the period.