Accounting Policies of Divine Entertainment Ltd. Company

Mar 31, 2011

Principle of Consolidation

The Consolidated Financial Statements relate to Divine entertainment Limited ("The Company") and its wholly owned subsidiary company Sonpal Infotech Private Limited ("The subsidiary company"). The consolidated financial statements have been prepared on the following basis:-

The financial statements of the company and its subsidiary company have been combined on line-by-line basis by adding together the book values of like items of assets, liabilities, Income and expenses, after fully eliminating intra group balances and intra group transactions resulting in unrealized profits or losses.

The Financial statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the parent company i.e 31st March, 2011.

Investment in associate company has been accounted as per Accounting Standard-13, Accounting for Investments issued by I.C.A.I.

The excess of cost of the company of its investment in the subsidiary company over the Company's portion of equity fund of the subsidiary is recognized in the financial statements as Goodwill.

The excess of company's portion of equity fund of the subsidiary as at the date of investment is treated as Capital Reserve.

Figures pertaining to the subsidiary company have been reclassified wherever necessary to bring them with the parent company's financial statements.

Basis of Accounting

These financial statements are prepared under historical cost convention or on accrual basis and are in accordance with requirements of the Companies Act, 1956.

Accounting policies not specifically referred to are otherwise consistent and in consonance with generally accepted principles.

Fixed Assets

Fixed assets are stated at cost of acquisition less depreciation and the same have not been revalued during the year.

Depreciation

Depreciation on assets used during the period has been provided on Straight Line method at the rates specified in Schedule XIV of the Companies act,1956 on pro rata basis.

Revenue Recognition

Expenses and income considered payable and receivable respectively are accounted on accrual basis. However the interest on late payment of tax is to be accounted on payment basis only.

Provision for Taxation

Provision for Taxation has been made on the basis of tax computed as per provisions of Income Tax Act,1961.

Provision for Gratuity

No provision has been made in the books for gratuity as the Act is not applicable to the company.