1) Basis of preparation of Financial statements
These financial statements have been prepared under the historical cost
convention from the books of account maintained on an accrual basis
which is in conformity with accounting principles generally accepted in
India, relevant provisions of the Companies Act, 1956 and the mandatory
Accounting Standards as specified in the Companies (Accounting
Standard) Rules, 2006, prescribed by the Central Government.
2) Use of estimates
The preparation of financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities as at the date of financial
statements and the reported amounts of revenue and expenses during the
reported period. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized in the current and
3) Fixed Assets
Fixed assets are stated at historical cost of acquisition or
construction less accumulated depreciation.
Depreciation is provided on written down value method at the rates and
in the manner prescribed under Schedule XIV of the Companies, Act 1956.
Investments are classified as current or long term in accordance with
Accounting Standards 13 on Accounting for Investments Long term
Investments are carried at cost less provision for diminution in value
considered to be other than temporary in nature, if any.
Trade investments are valued at lower cost or market value.
6) Revenue Recognition:
In appropriate circumstances, revenue (income) is recognized when it is
earned and no significant uncertainty as to determination or
Income from Consultancy services and Commission is recognized on
proportionate completion method based on agreed terms and contract.
Interest, as and when applicable, on refunds from statutory authorities
is recognized when such interest is determinable, based on completed
proceedings. Other interest income is recognized using time proportion
method, based on interest rate implicit in the transactions. Profit on
sale of investments is recognized on completion of transactions.
Sales are recognized when all significant risks and rewards of
ownership have been transferred to the buyer. Sales are shown Net of
Dividends are recognized when the shareholders'' right to receive
payment is established by the balance sheet date.
Material known liabilities are provided for on the basis of available
information / estimates.
8) Deferred Revenue Expenditure
Deferred revenue expenditure is written off entirely in the year in
which it is incurred as per the provision of AS-26 on Intangible
9) Taxes on Income
Income tax is accounted for in accordance with Accounting Standard 22
on Accounting for Taxes on income. Tax comprises current Tax and
Provision for taxation is made in accordance with the provisions of
Income Tax Act, 1961. Deferred tax assets (if any) are recognized only
if there is reasonable certainty that they will be realized.
Minimum Alternate Tax (MAT) credit is recognized only when and to the
extent there is convincing evidence that company will pay normal income
tax during the specified period. In the year in which the MAT credit
becomes eligible to be recognized as an asset in accordance with the
Guidance Note issued by the Institute of Chartered Accountants of
India, the said assets is created by the way of a credit to the Profit
and Loss account.
10) Employee Benefits
a) Short Term Employee Benefits are recognized as an expense at the
undiscounted amount in the Profit & Loss Account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Profit and Loss Account of the year in which the
employee has rendered services. The expense is recognized at the
present value of the amount payable, determined as per Actuarial
Valuations. Actuarial gains and losses in respect of post employment
and long term employee benefits are recognized in the Profit and Loss
11) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the