Accounting Policies of GDL Leasing & Finance Ltd. Company

Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION

a) Compliance with Indian Accounting Standards (Ind - AS):

The financial statements have been prepared in accordance with the Indian Accounting
Standards (‘Ind AS’) notified under Companies (India Accounting Standards) Rules, 2015.

The company follows the prudential norms issued by the Reserve Bank of India for Assets
classification, Income recognition and provisioning for non-performing assets. Besides
additional amount is written/off provided for when the management, on a review, considers
it necessary.

The financial statements have been prepared on accrual and going concern basis. The
accounting policies are applied consistently to all the periods presented in the financial
statements, All the assets and liabilities have been classified as current and non-current as
per the Company’s normal operating cycle and other criteria as set out in Division II of
Schedule III to the Companies Act, 2013.

b) Historical Cost Convention

The financial statements have been prepared on a historical cost basis, except for the
followings:

- Certain financial assets and liabilities that are measured at fair value.

c) Functional and presentation currency

The financial statements are prepared in Indian Rupees (‘Rs.’), which is the Company’s
functional and presentation currency.

d) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non¬
current classification.

An asset is classified as current when it is: -

- expected to be realized, or intended to be sold or consumed in normal operating cycle;

- held primarily for the purpose of trading;

- expected to be realized within 12 months after the reporting period; or

- cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it is:

- expected to be settled in the normal operating cycle;

- held primarily for the purpose of trading;

- due to be settled within 12 months after the reporting date; or

- there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting date.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities:

Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Operating Cycle:

The operating cycle is the time between acquisition of assets for processing and their
realization in cash and cash equivalent. The Company has identified twelve months as its
operating cycle.

e) Use of estimates and judgments

The preparation of the financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosure and the disclosure of contingent liabilities.
Uncertainty about these estimates and assumptions could result in outcomes that requires
material adjustments to the carrying amount of the assets and liabilities in future period/s.

These estimates and assumptions are based on the facts and events that existed as at the
date of Balance Sheet, or that occurred after that date but provide additional evidence
about conditions existing as at the Balance Sheet date.

The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying values of assets and liabilities within the next financial year are
discussed below.

i Useful lives of Property Plant and Equipment

The Property, Plant and Equipment are depreciated on a written down value basis over
their respective useful lives. Management estimates the useful lives of these assets,
changes in the expected level of usage, technological developments, level of wear and
tear could impact the economic useful lives and the residual values of these assets,
therefore, future depreciation charges could be revised and could have an impact on the
profit in future years.

ii Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes
in tax laws, and the amount and timing of future taxable income. Given the wide range
of business relationships and the long term nature and complexity of existing
contractual agreements, differences arising between the actual results and the
assumptions made, or future changes to such assumptions, could necessitate future
adjustments to tax income and expense already recorded. The Company establishes
provisions, based on reasonable estimates. The amount of such provisions is based on
various factors, such as experience of previous tax audits and differing interpretations of
tax regulations by the taxable entity and the responsible tax authority. Such differences
of interpretation may arise on a wide variety of issues depending on the conditions
prevailing in the respective domicile of the companies.

iii Impairment of Financial assets

The impairment provisions of financial assets are based on assumptions about risk of
default and expected loss rates. The Company uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on

Company’s past history, existing market conditions as well as forward looking estimates
at the end of each reporting period.

iv Impairment of non-Financial assets

The Company assesses at each reporting date whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset’s recoverable amount. An assets
recoverable amount is the higher of an assets’s fair value less cost of disposal and its
value in use. It is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or Companies of
assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, or other fair value indicators.

v Estimation uncertainty relating to COVID-19 outbreak

The Company has considered internal and certain external sources of information
including credit reports, economic forecasts and industry reports up to the date of
approval of the financial statements in determining the impact on various elements of its
financial statements. The Company has used the principles of prudence in applying
judgments, estimates and assumptions including sensitivity analysis and based on the
current estimates, the Company expects to fully recover the carrying amount of trade
receivables including unbilled receivables, goodwill, intangible assets and investments.
The eventual outcome of impact of the global health pandemic may be different from
those estimated as on the date of approval of these financial statements.

Property, Plant & Equipment

Property, Plant & Equipment are accounted for on historical cost basis (inclusive of the cost of
installation and other incidental costs till commencement of commercial production) net of
recoverable taxes, less accumulated depreciation and impairment loss, if any. It also includes
the initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located.

Subsequent costs are added to the existing asset’s carrying amount or recognized 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. All other repairs and maintenance are charged to the Statement of Profit and Loss
during the period in which they are incurred.

Cost of leasehold land is amortized over the period of lease.

Depreciation on property, plant & equipment is provided on a pro-rate basis on written down
value basis, over the useful life of the assets estimated by the management, in the manner
prescribed in Schedule II of the Companies Act, 2013. The asset’s residual values, useful lives
and method of depreciation are reviewed at the end of each reporting period and necessary
adjustments are made accordingly, wherever required. The useful lives in the following cases
are different from those prescribed in Schedule II of the Companies Act, 2013-:

Based on usage pattern, internal assessment and technical evaluation carried out by the
technicians, the management believes that the useful lives as given above best represent the
period over which the management expects to use these assets. Hence the useful lives of these
assets is different from the lives as prescribed in Schedule II of the Companies Act, 2013.

Gains or losses arising on retirement or disposal of property, plant and equipment are
recognized in the Statement of Profit and Loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance
Sheet are disclosed as “Capital work-in-progress”.

Investment

Investments that are readily realizable and intended to be held for not more than a year are
classified as current investments. All other investments are classified as long-term
investments. Current investments are carried at lower of cost and fair value determined on an
individual investment basis. Long-term investments are carried at cost. However, provision for
diminution in value is made to recognise a decline other than temporary in the value of the
investments.

Financial Instruments

A financial instrument is a contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

Cash and Cash Equivalents

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

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Mar 31, 2014

I. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities for future periods.

II. Cash Flow Statement

Cash flow are reported using the indirect method where by cash flow from operating, investing and financing activities of the Group are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash or receipts.

III. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must be fulfilled before revenue is recognized.

a. Interest and other dues are accounted on accrual basis except in the case of non- performing loans where it is recognized upon realization, as per the income recognition and assets classification norms prescribed by the RBI.

b. Income or discounted instruments are recognized over the tenure of the investment on a straight line method.

c. Dividend is accounted when the right to receive is established.

d. Front end fees on processing of loans are recognized upfront as income

e. Profit/loss on sale of Investments is recognized on trade data basis. Profit/loss on sale of Investment is determined based on 'weighted average' cost for Investment.

f. All other fees are recognized when reasonable right to recovery is established, revenue can be reliably measured as and when they become due

g. Other revenue is recognized on accrual basis and no significant uncertainty exists as to its realization or collection.

IV. Fixed Assets

Fixed cost is stated at cost, net of accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

Subsequent expenditure related to an item of fixed assets is added to book value only if it increases the future benefits from the existing assets beyond its previously assessed standard of performance. All other expenses of existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from the de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of fixed asset and are recognized in the statement of profit and loss when the asset is de-recognized.

V. Depreciation

Depreciation of fixed assets is provided using the Straight Line Basis based on or at the rate prescribed under schedule XIV of the Companies Act, 1956.

VI. Taxes on Income

Tax expenses comprise Current and Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

VII. Retirement and Other Employee Benefits

Provident Fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The company has not deducted or deposited any provident fund on behalf of employee so there is no obligation of company towards provident fund.

Gratuity

The company has not made any provision for the gratuity and will be charged to the Profit & Loss Account in the year in which it is paid.

VIII. Earnings Per Share

Basic Earnings per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting all attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholder and the weighted average no of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

IX. Cash and Cash Equivalent

Cash and cash equivalent for the purpose of cash flow statement comprise cash at bank and cash on hand, fixed deposit and interest accrued on deposits upto 31.03.2014.

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Mar 31, 2013

1. Income Recognition and Basis of Accounting

The Company prepares its financial statement in according with generally accepted accounting principals and also in accordance with the requirement of the Companies Act, 1956. Specific Income has been recognized as under.

a) Interest on Loans & Advances on accrual basis.

b) Dividends .are acxountedifoEsas& when received.

2. Treatment of expenses

All expenses are accounted for on accrual basis

3. Depreciation

The Company has charged depreciation on straight-line method as per schedule XIV of the Companies Act, 1956 on pro-rata basis with reference to period of use.

4. Treatment of miscellaneous expenditure

Expenditure related to share issue and preliminary expenses are to be written off in ten yearly equal installments.

5. Valuation of Stock In Trade

Stock-in trade is valued at lower of cost or market price. Cost is computed on the basis of weighted average cost method.

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Mar 31, 2010

1. Income Recognition and Basis of Accounting

The Company prepares its financial statement in according with generally accepted accounting principals and also in accordance with the requirement of the Companies Act, 1956. Specific Income has been recognized as under.

a) Interest on Loans & Advances on accrual basis.

b) Dividends are accounted for as & when received.

2. Treatment of expenses

All expenses are accounted for on accrual basis

3. Depreciation

The Company has charged depreciation on straight-line method as per schedule XIV of the Companies Act, 1956 on pro-rata basis with reference to period of use.

4. Treatment of miscellaneous expenditure

Expenditure related to share issue and preliminary expenses are to be written off in ten yearly equal installments.

5. Valuation of Stock In Trade

Stock-in trade is valued at lower of cost or market price. Cost is computed on the basis of weighted average cost method.