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Accounting Policies of Tata Investment Corporation Ltd. Company

Mar 31, 2016

1.1 Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the applicable guidelines issued by the Reserve Bank of India (''RBI''). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the period in which the results are known / materialise.

1.3 Fixed Assets, Depreciation and amortisation

Fixed assets are stated at cost less accumulated depreciation/amortisation provided on the straight line method. The cost of Fixed assets includes taxes, duties and other incidental expenses incurred in relation to their acquisition/ bringing the assets to their intended use.

Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the management best estimation of getting economic benefits from such assets. Further, Assets individually costing Rs. 5000/- or less are fully depreciated in the year of purchase.

1.4 Revenue recognition

Income from Dividend is accounted when such dividend has been declared and the Company''s right to receive payment is established.

Interest income is recognised on a time proportionate basis, taking into account the amount outstanding and the coupon rate applicable. 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, with reference to the coupon dates.

1.5 Employee benefits

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of profit and Loss of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans i.e. provident fund & superannuation fund are recognised in the Statement of profit and Loss in the period in which the employee has rendered the service.

c) Company''s liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.6 Investments

a) Long Term investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments''are stated at average cost except where there is a diminution other than temporary, for which provision is made.

b) Current investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments''and in accordance with the RBI guidelines, are stated at the lower of cost and fair value, by category of investments.

c) The difference between the holding cost and the face value of the Government securities / Bonds / Debentures is written of / up proportionately over the remaining life of the concerned investment or, till the call option date in case of perpetual debentures.

d) Inter-class transfer of investments from one category to the other, if any, is done in accordance with the RBI guidelines at the lower of book value and fair value / market value on the date of transfer.

1.7 Taxes on income

Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed at each Balance Sheet date, based on developments during the year and available case laws to reassess realisation / liabilities.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to in significant risk of changes in value.

1.9 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.10 Accounting for provisions, contingent liabilities and contingent assets

In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Company recognises provisions when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Provisions are determined based on management estimate required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

A disclosure of contingent liability is made when there is :

- a possible obligation arising from a past event, the existence of which will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the Company; or

- a present obligation arising from a past event which is not recognised as it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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.

Contingent Assets, if any, are not recognised in the financial statements since this may result in the recognition of income that may never be realized.

1.11 Onerous contracts

Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

1.12 Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Statement of profit and Loss to the extent the carrying amount of assets exceeds their estimated recoverable amount.

1.13 Operating Cycle

Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.


Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), and the applicable guidelines issued by the Reserve Bank of India (''RBI''). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for depreciation as more described in Note 2.7.1.

1.2 Use of estimates

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the period in which the results are known / materialise.

1.3 Fixed Assets, Depreciation and amortisation

Fixed assets are stated at cost less accumulated depreciation / amortisation provided on the straight line method. The cost of Fixed assets includes taxes, duties and other incidental expenses incurred in relation to their acquisition / bringing the assets to their intended use.

Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the managements best estimation of getting economic benefits from such assets. Further, assets individually costing Rs.5000/- or less are fully depreciated in the year of purchase.

1.4 Revenue recognition

Income from Dividend is accounted when such dividend has been declared and the Company''s right to receive payment is established.

Interest income is recognised on a time proportionate basis, taking into account the amount outstanding and the coupon rate applicable.

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, with reference to the coupon dates.

1.5 Employee benefits

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans i.e. provident fund & superannuation fund are recognised in the Statement of Profit and Loss in the period in which the employee has rendered the service.

c) Company''s liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.6 Investments

a) Long Term investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments'' are stated at average cost except where there is a diminution other than temporary, for which provision is made.

b) Current investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments'' and in accordance with the RBI guidelines, are stated at the lower of cost and fair value, by category of investments.

c) The difference between the holding cost and the face value of the Government securities / Bonds / Debentures is written off / up proportionately over the remaining life of the concerned investment or, till the call option date in case of perpetual debentures.

d) Inter-class transfer of investments from one category to the other, if any, is done in accordance with the RBI guidelines at the lower of book value and fair value / market value on the date of transfer.

1.7 Taxes on income

Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed at each Balance Sheet date, based on developments during the year and available case laws to reassess realisation / liabilities. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.9 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.10 Accounting for provisions, contingent liabilities and contingent assets

In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Company recognises provisions when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.

Provisions are determined based on management estimate required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

A disclosure of contingent liability is made when there is:

- a possible obligation arising from a past event, the existence of which will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the Company; or

- a present obligation arising from a past event which is not recognised as it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

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.

Contingent Assets, if any, are not recognised in the financial statements since this may result in the recognition of income that may never be realized.

1.11 Onerous contracts

Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

1.12 Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Statement of Profit and Loss to the extent the carrying amount of assets exceeds their estimated recoverable amount.

1.13 Operating Cycle

Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

Note:

2.7.1 The Company has revised its policy of providing depreciation / amortisation on fixed assets effective 1st April, 2014. Depreciation is now provided on a straight line method as against written down value method and the remaining useful life has also been revised in line with Schedule II of the Companies Act, 2013 wherever appropriate based on management''s internal evaluation. The company believes that the change in the method leads to more appropriate presentation of the financial statements.

The depreciation expense in the Statement of Profit and Loss for the year is lower by Rs.16.74 lacs consequent to the above change in the method of depreciation and change in the useful life of the assets.

On account of these changes depreciation / amortization expenses for the year and net block of fixed assets as on 31st March, 2015 are not comparable with previous years.


Mar 31, 2013

1.1 Basis of Preparation of Financial Statements.

The financial statements have been prepared on the historical cost convention, on an accrual basis and comply in all material respect with the Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

1.2 The preparation of the financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognized in the periods in which the results are known / materialise.

1.3 Fixed assets are stated at cost less accumulated depreciation provided on the written down value method at the following rates :-

1.4 Income from Dividend is accounted as and when such dividend has been declared and the Company''s right to receive payment is established.

Interest income is recognised on a time proportion basis, taking into account the amount outstanding and the rate applicable. 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.

1.5 a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans are recognised in the Statement of Profit and Loss in the period in which the employee has rendered the service.

c) Company''s liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.6 a) Long Term investments as per Accounting Standard (AS) 13 - ''Accounting for Investments'' are stated at average cost except where there is a diminution other than temporary, for which provision is made.

b) Current investments as per Accounting Standard (AS) 13 - ''Accounting for Investments'' are stated at the lower of cost and fair value, considered category wise.

c) The difference between the holding cost and the face value of the Government securities / Bonds / Debentures is written off / up proportionately over the remaining life of the concerned investment / till the call option date in case of perpetual debentures.

1.7 Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed at each Balance Sheet date, based on developments during the year and available case laws to reassess realisation / liabilities.

1.8 Current / Non-current:

All assets and liabilities are presented as Current or Non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. The Company has considered its operating cycle as 12 months for the purpose of Current / Non-current classification of assets and liabilities.


Mar 31, 2012

1.1 Basis of Preparation of Financial Statements.

The financial statements have been prepared on the historical cost convention, on an accrual basis and comply in all material respect with the Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

1.2 The preparation of the financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Income from Dividend is accounted as and when such dividend has been declared and the Company's right to receive payment is established.

Interest income is recognised on a time proportion basis, taking into account the amount outstanding and the rate applicable.

1.4 a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans are recognised in the statement of Profit and Loss in the period in which the employee has rendered the service.

c) Company's liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the statement of profit and loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

1.5 a) Long Term investments as per Accounting Standard (AS) 13 - 'Accounting for Investments' are stated at average cost except where there is a diminution other than temporary, for which provision is made.

b) Current investments as per Accounting Standard (AS) 13 - 'Accounting for Investments' are stated at the lower of cost and fair value, considered category wise.

c) The difference between the holding cost and the face value of the Government securities/bonds/debentures is written off/up proportionately over the remaining life of the concerned investment / till the call option date in case of perpetual debentures.

1.6 Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed at each balance sheet date based on developments during the year and available case laws to reassess realisation/liabilities.

b) The holders of 68,88,343 detachable warrants issued with the Zero Coupon Fully Convertible Bonds of Rs.650/- each were entitled to apply for and be allotted on payment of Rs.400/- per warrant, one ordinary share of Rs.10/- each at a premium of Rs.390/-, between 1.4.2011 and 30.4.2011.

c) The Issued, Subscribed and fully paid up ordinary shares increased on the issue / allotment of 68,58,222 ordinary shares of Rs.10 each at a premium of Rs.390 per share during the year, to the warrant holders on exercise of rights.

d) 3,75,41,071 Ordinary shares - 68.14% (Previous Year 3,14,53,660 Ordinary shares - 65.21%) of Rs.10/- each are held by the Holding Company, Tata Sons Ltd. No other shareholder holds more than 5% of the ordinary share capital of the company. 8,69,472 Ordinary Shares (Previous Year 7,60,788) are held by a subsidiary of the holding company and 6,74,390 Ordinary shares (Previous Year 5,83,060) are held by associates of the holding company.

e) The Company has only one category of shares with voting rights, viz. Ordinary Share Capital.

2.1. Trade Payables

None of the parties grouped under Trade Payables have declared themselves under the Micro, Small and Medium Enterprises Development Act, 2006.

The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

2.1.1 Trade Payables include amount payable to the holding company, Tata Sons Ltd. Rs.195.56 lacs (Previous Year Rs.204.87 lacs)

2.2.1 All the equity investments in Sri Lanka and Pakistan except one scrip have been written off during the year. Equity Shares held in Sri Lanka/Pakistan Companies, are at cost less provision for other than temporary diminution.

2.2.2 All the above investments are fully paid, except where otherwise indicated.

* Denotes balance less than Rs.500

2.3 Deferred Tax Assets

Deferred Tax Assets have not been recognised, as there is no reasonable certainty for setting off the same, considering the present tax status of the Company.

2.4.1 Security deposits includes an amount of Rs.300.00 lacs with Ewart Investments Ltd. (Previous Year Rs.300.00 lacs), which is a related party.

2.5.1 Current Investments shown in note 2.11 of Rs.5000.00 lacs (Previous Year Rs.2501.50 lacs) represents current maturities of Long Term Investments which as per the Accounting Standard (AS)-13 'Accounting for Investments' are Long Term Investments.

2.6 Trade receivables

All Trade receivables are unsecured and considered good - less than six months.

2.6.1 Balance with banks on current accounts includes

i) amount kept in Unpaid dividend accounts - Rs. 98.45 lacs (Previous Year Rs.121.01 lacs).

ii) amount kept in an escrow account towards matured deposits and interest thereon Rs.1.47 lacs (Previous Year Rs.2.23 lacs).

iii) amount which is subject to exchange control restrictions in Sri Lanka Rs.1.25 lacs (Previous Year Rs.1.42 lacs).

2.6.2 Balances with banks on deposit accounts includes

i) amount which is subject to exchange control restrictions in Sri Lanka Rs.25.51 lacs (Previous Year Rs.26.03 lacs).

ii) interest accrued but not due on deposit - Rs. 0.30 lac (Previous Year Rs.0.19 lac).

2.6.3 Other bank balances on deposit accounts include interest accrued but not due on deposits - Rs. 865.63 lacs (Previous Year Rs.367.45 lacs).

2.6.4 Other bank balances includes deposits with more than 12 months maturity, Rs.Nil (Previous Year Rs.7700.00 lacs) and interest accrued but not due thereon Rs.Nil (Previous Year Rs.68.10 lacs).

3.1 Profit on sale of investments (net)

Profit on sale of investments (net) includes loss of Rs.61.37 lacs on current investments, as per AS-13 (Previous Year profit of Rs.126.40 lacs).


Mar 31, 2011

(i) Basis of Preparation of Financial Statements.

The financial statements have been prepared on the historical cost convention, on an accrual basis and comply in all material respect with the Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(ii) The preparation of the financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

(iv) Income from Dividend is accounted as and when such dividend has been declared and the Companys right to receive payment is established.

Interest income is recognised on a time proportion basis, taking into account the amount outstanding and the rate applicable.

(v) a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans are recognised in the Profit and Loss Account in the period in which the employee has rendered the service.

c) Companys liability towards Defined Benefit Plans / Long term compensated absences is determined by an inde- pendent actuary using the projected unit credit method. Past services are recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(vi) a) Long Term investments are stated at average cost except where there is a diminution other than temporary, for which provision is made.

b) Current investments are stated at the lower of cost and fair value, considered category wise.

(vii) Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed at each balance sheet date based on developments during the year and available case laws to reassess realisation/liabilities.


Mar 31, 2010

(i) Basis of Preparation of Financial Statements.

The financial statements have been prepared on the historical cost convention, on an accrual basis and comply in all material respect with the Accounting Standards notified by Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(ii) The preparation of the financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

(iii) Income from Dividend is accounted as and when such dividend has been declared and the Companys right to receive payment is established.

Interest income is recognised on a time proportion basis, taking into account the amount outstanding and the rate applicable.

(iv) a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the period in which the related service is rendered.

b) Contributions under Defined Contribution Plans are recognised in the Profit and Loss Account in the period in which the employee has rendered the service.

c) Companys liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past services are recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(v) a) Long Term investments are stated at average cost except where there is a diminution other than temporary, for which provision is made. b) Current Investments are stated at the lower of cost and fair value, considered category wise.

(vi) Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed at each balance sheet date based on developments during the year and available case laws to reassess realisation/liabilities.

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