Accounting Policies of McDowell Holdings Ltd. Company

Mar 31, 2024

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the significant accounting policies adopted in the
preparation of these Financial statements ["financial statements”). These policies
have been consistently applied to all the years presented, unless otheiwise stated,

(a) Basis of preparation

These financial statements have been prepared in accordance with the historical
cost basis, except as disclosed in the accounting policies below, and are drawn up in
accordance with the provisions of the Companies Act, 2013 and Indian Accounting
Standards ["Ind AS”) notified under Section 133 of the Companies Act, 2013 [the
Act) [Companies (Indian Accounting Standards) Rules, 2015J, amended thereto and
other relevant provisions of the Companies Act 2013 (the Act).

(i) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for
Lhe following:

• certain financial assets and liabilities that are measured at fair value.

Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date, regardless of whether that price is directly observable oi estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the
Company takes into account the characteristics of the asset or liability which market
participants would take into account when pricing the asset or liability at the
measurement date.

in addition, for financial reporting purposes, fair value measurements ate
categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair
value measurements are observable and the significance of the inputs to the fail
value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets
or iiabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

(b) Income taxes

I he income tax expense or credit for the period is the tax payable on the current
periods taxable income based on the applicable income tax rate adjusted by
changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses, if any,

The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the end of the reporting period, Management periodically
evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities,

Deferred income tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred income tax is determined using tax
rates (and laws] that have been enacted or substantively enacted by the end of the
reporting period and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.

I he carrying amount of deferred tax assets are reviewed at the end of each
reporting period and are recognised for all deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be available
to utilise those temporary differences and losses,

Deferred tax assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in subsidiaries, associates and
interest in joint arrangements where it is not probable that the differences will
reverse in the foreseeable future and taxable profit will not be available against
which the temporary difference can be utilised.

Deferred tax assets and liabilities are offset when there is a legally enforceable right
to offset current tax assets and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it
relates to items recognised in other comprehensive income or directly in equity. In
this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.

During the year under consideration company has reversed the provisions related
to tax liability of Income Tax and Deferred Tax Liability as it is no longer payable.

The Company has not made provisions for current income tax and deferred tax
liabilities in the financial statements for the year ended 31^st Day of March, 2024.
This is due to the accumulated losses incurred in the previous years, which have
resulted in the availability of unabsorbed depreciation and carry forward of losses
under the income Tax Act, 1961.

Given the significant carried-forward losses and unabsorbed depreciation, theie is
no taxable income for the current financial year. Consequently, the management has
determined that it is not probable that future taxable profits will be available
against which these losses can be utilized. As a result, no provision for income tax
has been made, and the recognition of deferred tax assets has been limited to the
extent of deferred tax liabilities, if any.

The situation will be reassessed in subsequent financial periods based on the
profitability and tax positions of the Company.

(c) Leases

Definition of Lease

A lease is a contract, or part of a contract, that conveys the right to use an asset
(the underlying asset) for a period of time in exchange for consideration.

Lease Classification

Leases are classified as finance leases whenever the terms of the lease transfer
substantially ail the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.

Right-of-Use Assets and Lease Liabilities

The Company recognises a right-of-use asset and a corresponding lease liability
at the lease commencement date. The right-of-use asset is initially measured at
cost, which includes the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date, less any lease
incentives received, and any initial direct costs.

Measurement of Lease Liability

The lease liability is initially measured at the present value of lease payments
that are not paid at the commencement date, discounted using the intetest rate
implicit in the lease or, if that rate cannot be readily determined, the Company''s
incremental borrowing rate i.e. 12% p.a,

Subsequent Measurement

Subsequently, the lease liability is measured at amortised cost using the
effective interest method, it is re-measured when there is a change in future
lease payments arising from a change in an index or rate, or if the Company
changes its assessment of whether it will exercise a purchase, extension, or
termination option.

Depreciation of Right-of-Use Asset

The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term.

Lease Payments

Lease payments are allocated between the lease liability and finance cost. The
finance cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for
each period.

Short-term Leases and Leases of Low-Value Assets

The Company has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of machinery and vehicles that have a lease term
of 12 months or less and leases of low-value assets. The Company recognises
the lease payments associated with these leases as an expense on a straight-line
basis over the lease term,

Subleases

For subleases classified as finance leases, the Company derecognises the right-
of-use asset relating to the head lease and recognises a receivable at an amount
equal to the net investment in the sublease,

(d) Cash and cash equivalents

Cash and Cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short term, highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value. These do not include bank balances earmarked / restricted for specific
purposes.

(e) Investments and other financial assets
(i) Classification

The Company classifies its financial assets in the following measurement
categories:

" ^{those t0 be} measured subsequently at fair value (either through other
comprehensive income, or through profit or loss), and

^p those measured at amortised cost,

The classification depends on the Company''s business model for managing the
financial assets and the contractual terms of the cash flows,

For assets measured at fair value, gains and losses will either be recorded in
profit or loss or other comprehensive income. For investments m debt
instruments, this will depend on the business model in which the investment is
held For investments in equity instruments, this will depend on whether the
Company has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive
income. The Company reclassifies debt investments when and only when its
business model for managing those assets changes.

fin) Measurement . ,

At initial recognition, the Company measures a financial asset at its fan value
plus in the case of a financial asset not at fair value through profit or loss
transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through profit 01
loss are expensed in profit or loss.

Equity investments (other than Investments in subsidiaries)

The Company subsequently measures all equity investments at fair value
Where the Company''s management has elected to present fair value gains and
losses on equity investments in other comprehensive income, there is no
subsequent reclassification of fair value gains and losses to profit or loss.
Dividends from such investments continue to be recognised m profit or loss as
other income when the Company''s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss
are recognised in other gain or loss in the statement of profit and loss.

(iv) Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit losses
associated with its assets carried at amortised cost and FVOCI debt instruments.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk.

[v) Impairment testing - The Company estimates the value in use of the cash
generating unit (CGU) based on future cash flows after considering current
economic conditions and trends, estimated future operating results and
growth rates, and anticipated future economic and regulatory conditions. The
estimated cash flows are developed using internal forecasts

[vi) De-recognition of financial assets

A financial asset is de-recognised only when

" l he Company has transferred the rights to receive cash flows from the financial
asset or

• retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, it evaluates whether it has
transferred substantially all risks and rewards of ownership of the financial asset.
In such cases, the financial asset is de-recognised.

Where the Company has not transferred substantially all risks and rewards of
ownesship of the financial asset, the financial asset is not de-recognised.

Where the Company has neither transferred a financial asset nor retains
substantially all risks and rewards of ownership of the financial asset, the
financial asset is de-recognised if the Company has not retained control of the
financial asset, Where the Company retains control of the financial asset, the

asset is continued to be recognised to the extent of continuing involvement in the
financial asset.

Purchase and sale of investment are accounted at trade date.

During the year under consideration, the company has de-recognised the
4551000 no, of shares in United Breweries Limited amounting to Rs, 90381,50
Lakhs as shares have been transferred to State Bank of India Mutual Fund on the
directions of the Enforcement Directorate (E.D) via Letter No, IRMSL/MIIL/RJL-
029/23 dated 31,07.2023, ''

(0 Dividend Income

Dividends are recognised in profit and loss only when the right to receive
payment is established, it is probable that the economic benefits associated
with the dividend will flow to the Company, and the amount of the dividend can
be reliably measured.

fg) Interest Income . . ,

Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected hie of the
financial asset to that asset''s net carrying amount on initial recognition,

(h''J Financial liabilities

i. Classification as debtor equity

Financial liabilities and equity instruments issued by the Company are
classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability and an equity instrument.

ii. Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the instrument. Financial liabilities are initially
measured at the amortised cost unless at initial recognition, they are classified
as fair value through profit and loss,
ili. Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using e
effective interest rate method, Financial liabilities carried at fair value through
profit or loss are measured at fair value with all changes in fair value recognised
in the statement of profit and loss.

iv. Derecognition

A financial liability is derecognised when the obligation specified m the conti a .
is discharged, cancelled or expires.

(0 Offsetting financial instruments

'' Financial assets and liabilities are offset and the net amount is reported in the
balance sheet where there is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal course of
business and in the event of default, insolvency or bankruptcy of the Company
or the counterparty.

fil Property, plant and equipment (including Capital Work in Progress)

Property, plant and equipment are stated at historical cost less accumulated
depreciation. Historical cost includes expenditure that is directly attributable to
the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.

Property, Plant and Equipment of Business are depreciated under the reducing
balance method as per the useful life and in the manner prescribed in Part "C”
Schedule II to the Act.

Useful life of Property, plant and equipment - The Company reviews the
estimated useful lives of property, plant and equipment and intangible assets at
the end of each reporting period. This reassessment may result in change in
depreciation and amortisation expense in future periods.

Depreciation rate used by the Company are in line with those specified under
Schedule 11 of the Companies Act, 2013.

The i esidual values are not more than.5% of the original cost of the asset. The
asset s residual values and useful lives are reviewed, and adjusted on a
prospective basis if appropriate, at the end of each reporting period.

An assets carrying amount is written clown immediately to its recoverable
amount if the asset''s carrying amount is greater than its estimated recoverable
amount.

Gains and losses on disposals are determined by comparing proceeds with
carrying amount and are included in profit or loss.

Depreciation on assets purchased / disposed off during the year is provided on
pro rata basis with reference to the date of additions / deductions.

Transition to ind-AS

On transition to 1ND AS, the company has elected to continue with the carrying
value of all of its property, plant and equipment recognised as at April 1, 2018
measured as per the previous GAAP and use that carrying value as deemed cost
of the property, plant and equipment.

(k) Trade and other payables

These amounts represent liabilities for goods and services provided to the
Company prior to the end of financial period which are unpaid. They are
recognised initially at their Fair value and subsequently measured at amortised
cost using the effective interest method,

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Mar 31, 2018

1. ACCOUNTING POLICIES

i. Basis for preparation of financial statements :

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with relevant rules issued thereunder.

ii. 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 year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

iv. Fixed Assets :

Fixed Assets are stated at their original cost of acquisition and subsequent improvement thereto including taxes, duties, freight and other incidental expenses relating to acquisition and installation of such assets.

v. Depreciation :

Depreciation is allocated over the useful life of an asset as specified in Schedule II of the Companies Act, 2013 on written down value method.

vi. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company’s right to receive payment is established.

vii. Provision and contingencies :

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

viii. Tax expense :

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

ix. Segmental reporting :

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

x. Employee Benefit

a. Defined-contribution plans

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees’ provident fund maintained by the Promoter Company and Employees’ Pension Scheme with the government. The Company’s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

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Mar 31, 2016

CORPORATE INFORMATION:

In terms of a Composite Scheme of arrangement sanctioned by the Hon’ble High Court of Karnataka, the investment business of McDowell & Company Limited (now known as United Spirits Limited), was demerged into McDowell India Spirits Limited (now known as McDowell Holdings Limited) with retrospective effect from the opening hours of April 1, 2005. As a part of the Scheme, the name of the Company was changed from McDowell India Spirits Limited to McDowell Holdings Limited.

The Company has obtained registration from the Reserve Bank of Indi a, to carry on the business of a Non Banking (Non Deposit accepting) Financial Company. Presently, the company is engaged in the business of investment and financing.

1. ACCOUNTING POLICIES i. Basis for preparation of financial statements:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as prescribed under section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2015 as amended.

ii. 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 year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

iv. Fixed Assets :

Fixed Assets are stated at their original cost of acquisition and subsequent improvement thereto including taxes, duties, freight and other incidental expenses relating to acquisition and installation of such assets.

v. Depreciation:

Depreciation is allocated over the useful life of an asset as specified in Schedule II of the Companies Act, 2013 on written down value method.

vi. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company’s right to receive payment is established.

ii. Security commission and Interest income are recognized on accrual basis.

vii. Provision and contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

viii. Tax expense:

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

ix. Segmental reporting :

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

x. Employee Benefit

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees’ provident fund and Employees’ Pension Scheme with the government. The Company’s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

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Mar 31, 2014

I. Basis for preparation of financial statements:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. 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 year end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

iv. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company''s right to receive payment is established. ii. Security commission and interest income are recognized on accrual basis.

v. Provision and contingencies:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

vi. Tax expense:

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

vii. Segmental reporting :

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

viii. Employee Benefit :

a. Defined-contribution plans

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees'' provident fund and Employees'' Pension Scheme. The Company''s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

b. Terms and rights attached to equity shares

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. The rights of shareholder is governed by the Articles of Association of the Company and the Companies Act, 2013.

a. Nature of security and terms of repayment for secured borrowings

Nature of security Terms of repayment

Loan from ECL Finance Limited amounting to Rs. 500 Repayable on March 30th 2016; Rate of Million (Previous Year Rs. Nil million) is secured by interest @ 19.02% p.a the pledge of 27,36,000 Shares of United Breweries Limited.

Note :-

10,036,000 shares of United Breweries Limited are under pledge to secure the borrowing availed by the company as well as Group Companies. The carrying cost of such investments is 275.18 million and the market value is 8,244.07 million

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Mar 31, 2013

I. Basis for preparation of financial statements:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. 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 year end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

iv. Revenue recognition:

Revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company''s right to receive payment

is established. ii. Security commission and interest income are recognized on accrual basis.

v. Provision and contingencies:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

vi. Tax expense:

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

vii. Segmental reporting :

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

viii. Employee Benefit :

a. Defined-contribution plans

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees'' provident fund and Employees'' Pension Scheme with the government. The Company''s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

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Mar 31, 2012

I. Basis for preparation of financial statements:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006.

ii. 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 year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

iii. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

iv. Revenue recognition:

All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company's right to receive payment is established.

ii. Security commission and interest income is recognized on accrual basis.

v. Provision and contingencies:

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

vi. Tax expense:

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

vii. Segmental reporting :

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

viii. Employee Benefit :

a. Defined-contribution plans

These are plans in which the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the employees' provident fund and Employees' Pension Scheme with the government. The Company's payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that the payment covers.

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Mar 31, 2011

A. Basis for preparation

1. Accounting Convention:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006.

2. 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 year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

1. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

2. Revenue recognition:

All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company’s right to receive payment is established.

ii. Security commission and interest income is recognized on accrual basis.

3. Provision and contingencies:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

4. Tax expense:

Tax expense represents current tax and computed in accordance with the Indian Income Tax Act.

5. Segmental reporting:

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.

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Mar 31, 2010

A. Basis for preparation

1. Accounting Convention:

The financial statements are prepared under the historical cost convention, having due regard to the fundamental accounting assumptions of going concern, consistency, accrual and in compliance with the mandatory accounting standards as specified in the Companies (Accounting Standards) Rules, 2006.

2. 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 year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

1. Investments:

Investments are stated at cost. Permanent decline in the value of long-term investments is recognized. Temporary declines in the value of long-term investments are ignored.

2. Revenue recognition:

All revenues are generally recognized on accrual basis except where there is an uncertainty of ultimate realization.

i. Dividend from investment in shares is recognized as and when the company’s right to receive payment is established.

ii. Security commission and interest income is recognized on accrual basis.

3. Provision and contingencies:

A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refect the current management estimates.

4. Tax expense:

Tax expense comprises of current tax. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

5. Segmental reporting:

The operations of the company are divided into investment and financial services. Accordingly, the primary segment reporting comprises the performance under these segments.