Accounting Policies of Gilada Finance & Investments Ltd. Company

Mar 31, 2025

A. SIGNIFICANT ACCOUNTING POLICIES

1. Corporate Information :

Gilada Finance & Investments Limited is a public Company incorporated
in India under the provisions of the erstwhile Companies Act, 1956 on
26/07/1994. Its shares are listed on Bombay Stock Exchange. The
Company is Non-Banking Financial Company which is registered with
Reserve Bank of India (RBI). The Company engaged in the business of
lending and primarily deals in vehicle financing, small business loans and
mortgage loans.

Company is registered as Non-Banking Financial Company (NBFC) and is
adhering the regulatory and disclosure standards as applicable to NBFC-
BL (Earlier NBFC-ND-NSIs). The financial statements are prepared in
accordance with Indian Accounting Standards (Ind AS).

2. Accounting Policies :

1. Basis of preparation :

These financial statements of the Company have been prepared in
accordance with the Indian Accounting Standards as per the Companies
Rules 2015 as amended and notified under section 133 of the Companies
Act, 2013 (the Act), in conformity with the accounting principles generally
accepted in India and other relevant provisions of the Act. Any application
guidance / clarifications / directions issued by RBI or other regulators are
implemented as and when they are issued / applicable.

2. Basis of Measurement :

The financial statements have been prepared on the historical cost basis.

3. Use of Estimates :

The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent liabilities on the date of the financial
statements and reported amounts of revenues and expenses during the
period reported. Actual results could differ from those estimates. Any
revision to accounting estimates is recognized in accordance with the
requirements of the respective accounting standard.

The key assumptions concerning the future and other key sources of
estimation of uncertainty at the reporting date, that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below. The Company
based on its assumptions and estimates & on parameters available when the
financial statements were issued, existing circumstances and assumptions
about future developments, however, may change due to circumstances
arising that are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur. Areas that involved a higher
degree of estimate and judgment or complexity in determining the carrying
amount of some assets and liabilities are mentioned below.

a. Effective Interest Rate Method (EIR) :

The Company recognizes interest income / expense using a rate of return
that represents the best estimate of a constant rate of return over the
expected life of the loans given / taken. This estimation, by nature,
requires an element of judgment regarding the expected behavior and life
cycle of the instruments, as well as expected changes to other fee income
/ expense that are integral parts of the instrument.

b. Impairment of Financial Assets :

The measurement of impairment losses on loan assets and commitments,
requires judgment, in estimating the amount and timing of future cash
flows and recoverability of collateral values while determining the
impairment losses and assessing a significant increase in credit risk.

The Company''s Expected Credit Loss (ECL) calculation is the output of a
complex model with a number of underlying assumptions regarding the
choice of variable inputs and their interdependencies. Elements of the
ECL model that are considered accounting judgments and estimates
include :

• The Company''s criteria for assessing if there has been a significant
increase in credit risk.

• The segmentation of financial assets when their ECL is assessed on a
collective basis.

• Development of ECL model, including the various formula and the choice
of inputs.

• It is company''s policy to regularly review its model in the context of actual
loss experience and adjust when necessary.

c. Provisions and other contingent liabilities :

The reliable measure of estimates and judgments pertaining to litigations
and the regulatory proceedings in the ordinary course of the Company''s
business are disclosed as contingent liabilities.

Estimates and judgments are constantly evaluated and are based on
historical experience and other factors, including expectations of future
events, that may have a financial impact on the Company and that are
believed to be reasonable under the circumstances.

4. Revenue Recognition :

a. Interest Income on Loans :

Interest income is recognized in Statement of profit and loss using the
effective interest method for all financial instruments measured at
amortised cost. The ''effective interest rate'' is the rate that exactly

discounts estimated future cash payments or receipts through the
expected life of the financial instrument.

The calculation of the effective interest rate includes transaction costs and
fees that are an integral part of the contract. Transaction costs include
incremental costs that are directly attributable to the acquisition of
financial asset.

The Company calculates interest income by applying the EIR to the gross
carrying amount of financial assets other than credit-impaired assets.
When a financial asset becomes credit-impaired, the Company calculates
interest income by applying the effective interest rate to the net amortised
cost of the financial asset, If the financial asset cures and is no longer
credit-impaired, the Company reverts to calculating interest income on a
gross basis.

b. Fee and Commission Income :

Fee based income are recognized when they become measurable and when it
is probable to expect their ultimate collection. Commission and brokerage
income earned for the services rendered are recognized as and when they
are due.

c. Interest Income on Investments :

Interest income from investments is recognized when it is certain that the
economic benefits will flow to the Company and the amount of Income can
be measured reliably. Interest income is accrued on a time basis, by reference
to the principal outstanding and at the effective interest rate applicable.

d) Investments :

(a) The Company changed its accounting policy in respect of Investment in
property during financial year 2011-12. Investment in Capital Asset (i.e
Land at Kalburagi in Karnataka) revalued and held as stock in trade effective
31^st March, 2012, on the basis of valuation report given by approved valuer.
This change in accounting policy resulted into creation of revaluation
reserve to the extent of Rs.381/58 lakhs in FY 2011-12, which is carried
forward.

Land at Kalburagi is again revalued on 25/03/2024 for Rs.3,85,00,000/- by
general registered valuer.

(b) Long term unquoted investments in shares are stated at cost & provision
for diminution in the value of Long Term Investments is made only if, such
decline is other than temporary, in the opinion of the management.

(c) Investment in Land & Building at Vijayapura in Karnataka, acquired
against partial settlement of dues from commission agent at Vijayapura is
treated as long term investment and stated at cost.

The valuation of Investment in property at Vijaypura is under process by
general registered valuer for Rs.13,37,000/-.

5. Property, Plant & Equipment :

Property, Plant and Equipment are stated at cost of acquisition including
incidental expenses, less accumulated depreciation and accumulated
impairment loss, if any, All costs directly attributable to bringing the asset to
the working condition for its intended use including financing costs are also
capitalized.

Depreciation is provided on WDV method on the basis of useful life given
under Schedule II to the Companies Act, 2013 are as under :

a. Office Equipments : 5

b. Computer Hardware : 3

c. Furniture & Fixtures : 10

d. Vehicles : 10

e. Computer Software : 6

Property, Plant & Equipment is derecognized on disposal or when no future
economic benefits are expected from its use. Any gain or loss arising on
derecognition of the asset is recognized in other income / netted off from

any loss on disposal in the Statement of profit and loss in the year the asset
is derecognized.

6. Intangible Assets :

Intangible Assets are stated at cost less accumulated amortization and
accumulated impairment loss, if any. Intangible assets comprises of
computer software which is amortized over the estimated useful life. The
amortization period is lower of license period or 6 years which is based on
management''s estimates of useful life. Amortisation is calculated using the
written down value method to write down the cost of intangible assets over
their estimated useful lives.

7. Financial Instruments :

a. Recognition and Initial measurement :

Financial assets and financial liabilities are recognized when the
Company becomes a party to the contractual provisions of the
instruments. Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other
than financial assets and financial liabilities of FVTPL) are added to or
deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition, Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at
FVTPL are recognized immediately in Statement of profit and loss.

b. Classification and Subsequent measurement of financial assets :

On initial recognition, a financial asset is classified as measured at

- Amortised cost

- FVOCI - debt instruments

- FVOCI - equity instruments

- FVTPL

Amortised Cost :

The Company''s business model is not assessed on an instrument by
instrument basis, but at a higher level of aggregated portfolios being the level
at which they are managed. The financial asset is held with the objective to
hold financial asset in order to collect contractual cash flows as per the
contractual terms that give rise on specified dates to cash flows that are
solely payment of principal and interest (SPPI) on the principal amount
outstanding. Accordingly, the Company measures Bank balances, Loans,
Trade receivables and other financial instruments at amortised cost.

FVOCI - debt Instruments :

The Company measures its debt instruments at FVOCI when the instrument
is held within a business model, the objective of which is achieved by both
collecting contractual cash flows and selling financial assets; and the
contractual terms of the financial asset meet the SPPI test.

FVOCI - equity Instruments :

The Company subsequently measures all equity investments at fair value
through profit or loss, unless the Company''s management has elected to
classify irrevocably some of its equity instruments at FVOCI, when such
instruments meet the definition of Equity under Ind AS 32 Financial
Instruments and are not held for trading. Financial assets are not reclassified
subsequent to their initial recognition, except if and in the period of the
Company changes its business model for managing financial assets. All
financial assets not classified as measured at amortised cost or FVOCI are
measured at FVTPL. This includes all derivative financial assets.

Subsequent measurement of financial assets :

Financial assets at amortised cost are subsequently measured at amortised
cost using effective interest method. The amortised cost is reduced by
impairment losses. Interest Income, foreign exchange gains and losses and
impairment are recognized in statement of profit and loss. Any gain and loss
on derecognition is recognized in Statement of profit and loss.

Debt investments at FVOCI are subsequently measured at fair value. Interest
income under effective interest method, foreign exchange gains and losses
and impairment are recognized in Statement of profit and loss. Other net
gains and losses are recognized in OCI. On depreciation, gains and losses
accumulated in OCI are reclassified to Statement of profit and loss.

For equity investments, the Company makes an election on an instrument-
by-instrument basis to designate equity investments as measured at FVOCI.
These elected investments are measured at fair value with gains and losses
arising from changes in fair value recognized in other comprehensive income
and accumulated in the reserves. The cumulative gain or loss is not
reclassified to statement of profit and loss on disposal of the investments.
These investments in equity are not held for trading. Instead, they are held
for strategic purpose. Dividend income received on such equity investments
are recognized in Statement of profit and loss.

Equity investments that are not designed as measured at FVOCI are
designated as measured at FVTPL and subsequent changes in fair value are
recognized in Statement of profit and loss.

Financial assets at FVTPL are subsequently measured at fair value. Net gains
and losses, including any interest or dividend income, are recognized in
Statement of profit and loss.

c. Financial liabilities and equity instruments :

Classification as debt or equity :

Debt and equity instruments issued by the Company are classified as either
financial liabilities or as equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an
equity instrument.

Equity Instruments :

An equity instrument is any contract that evidence a residual interest in the
assets of an entity after deducting all of its liabilities. Equity instruments
issued by Company are recognized at the proceeds received. Transaction
costs of an equity transaction are recognized as a deduction from equity.

Financial Liabilities :

Financial Liabilities are classified as measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as held for trading
or it is a derivative or it is designated as such on initial recognition. Other
financial liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange gains and
losses are recognized in Statement of profit and loss. Any gain or loss on
derecognition is also recognized in Statement of profit and loss.

d. De-recognition :

Financial Assets :

The Company derecognizes a financial asset when the contractual rights to
the cash flows from the financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction in which substantially all
of the risks and rewards of ownership of the financial asset are transferred
or in which the Company neither transfers nor retains substantially all of the
risks and rewards of ownership and does not retain control of the financial
asset.

If the Company enters into transactions whereby it transfers assets
recognized on its balancesheet, but retains either all or substantially all of the
risks and rewards of the transferred assets, the transferred assets are not
derecognized.

Financial Liabilities :

A financial liability is derecognized when the obligation in respect of the
liability is discharged, cancelled or expires. The difference between the
carrying value of the financial liability and the consideration paid is
recognized in Statement of profit and loss.

e. Impairment of Financial Instruments :

Equity instruments are not subject to impairment under Ind AS 109, on
financial instruments.

The Company recognizes lifetime expected credit losses (ECL) when there
has been a significant increase in credit risk since initial recognition and
when the financial instrument is credit impaired. If the credit risk on the
financial instrument has not increased significantly since initial recognition,
the Company measures the loss allowance for that financial instrument at an
amount equal to 12 month ECL. The assessment of whether lifetime ECL
should be recognized is based on significant increases in the likelihood or
risk of a default occurring since initial recognition. 12 month ECL represents
the portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting
date.

When determining whether credit risk of a financial asset has increased
significantly since initial recognition and when estimating expected credit
losses, the Company considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, including on historical
experience and forward looking information.

The Company recognizes lifetime ECL for trade and other receivables. The
expected credit losses on these financial assets are estimated using a
provision matrix based on the Company''s historical credit loss expenses,
adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the forecast
direction of conditions at the reporting date, including time value of money
where appropriate. Lifetime ECL represents the expected credit losses that
will result from all possible default events over the expected life of a financial
instrument.

Loss allowances for financial assets measured at amortised cost are deducted
from the gross carrying amount of the assets. For debt securities at FVOCI,
the loss allowance is recognized in OCI and carrying amount of the financial
asset is not reduced in the Balance Sheet.

8. Finance Costs :

Finance Costs include interest expense computed by applying the effective
interest rate on respective financial instruments measured at amortised
cost. Financial instruments include bank term loans, non-convertible
debentures, fixed deposits mobilized, commercial papers, subordinated
debts and exchange differences arising from foreign currency borrowings to
the extent they are regarded as an adjustment to the interest cost. Finance
costs are charged to the Statement of profit and loss.

9. Cash & Cash Equivalents :

Cash and Bank balances include Cash in hand, Bank Balances, Bank Deposits
and Corporate deposits, if any.

10. Cash Flow Statement :

Cash flows are reported using the indirect method, whereby profit before
tax is adjusted for the effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing activities of
the Company are segregated.

11. Taxes on Income :

Tax expenses comprise current tax, deferred taxes and prior period taxes.

Current income tax at the amount expected to be paid to the tax authorities
in accordance with Income Tax Act.

Deferred income taxes reflect the impact of the current year timing
differences between taxable income and accounting income for the year.
Deferred tax is measured based on current tax rates.

---

Mar 31, 2024

A. SIGNIFICANT ACCOUNTING POLICIES

1. Corporate Information :

Gilada Finance & Investments Limited is a public Company incorporated in India
under the provisions of the erstwhile Companies Act, 1956 on 26/07/1994. Its shares
are listed on Bombay Stock Exchange. The Company is Non-Banking Financial
Company which is registered with Reserve Bank of India (RBI). The Company engaged
in the business of lending and primarily deals in vehicle financing, small business
loans and mortgage loans.

Company is registered as Non-Banking Financial Company (NBFC) and is adhering
the regulatory and disclosure standards as applicable to NBFC-BL (Earlier NBFC-ND-
NSIs). The financial statements are prepared in accordance with Indian Accounting
Standards (Ind AS).

2. Accounting Policies :

1. Basis of preparation^

These financial statements of the Company have been prepared in accordance with the
Indian Accounting Standards as per the Companies Rules 2015 as amended and notified
under section 133 of the Companies Act, 2013 (the Act), in conformity with the
accounting principles generally accepted in India and other relevant provisions of the
Act. Any application guidance / clarifications / directions issued by RBI or other
regulators are implemented as and when they are issued / applicable.

2. Basis of Measurement :

The financial statements have been prepared on the historical cost basis.

3. Use of Estimates^

The preparation of the financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of
contingent liabilities on the date of the financial statements and reported amounts of
revenues and expenses during the period reported. Actual results could differ from those
estimates. Any revision to accounting estimates is recognized in accordance with the
requirements of the respective accounting standard.

The key assumptions concerning the future and other key sources of estimation of
uncertainty at the reporting date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based on its assumptions and estimates & on
parameters available when the financial statements were issued, existing circumstances
and assumptions about future developments, however, may change due to
circumstances arising that are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur. Areas that involved a higher degree of
estimate and judgment or complexity in determining the carrying amount of some assets
and liabilities are mentioned below.

a. Effective Interest Rate Method (EIR) :

The Company recognizes interest income / expense using a rate of return that
represents the best estimate of a constant rate of return over the expected life of the
loans given / taken. This estimation, by nature, requires an element of judgment
regarding the expected behavior and life cycle of the instruments, as well as expected
changes to other fee income / expense that are integral parts of the instrument.

b. Impairment of Financial Assets :

The measurement of impairment losses on loan assets and commitments, requires
judgment, in estimating the amount and timing of future cash flows and recoverability
of collateral values while determining the impairment losses and assessing a
significant increase in credit risk.

The Company’s Expected Credit Loss (ECL) calculation is the output of a complex
model with a number of underlying assumptions regarding the choice of variable
inputs and their interdependencies. Elements of the ECL model that are considered
accounting judgments and estimates include :

• The Company’s criteria for assessing if there has been a significant increase in credit
risk.

• The segmentation of financial assets when their ECL is assessed on a collective basis.

• Development of ECL model, including the various formula and the choice of inputs.

• It is company’s policy to regularly review its model in the context of actual loss
experience and adjust when necessary.

The reliable measure of estimates and judgments pertaining to litigations and the
regulatory proceedings in the ordinary course of the Company’s business are
disclosed as contingent liabilities.

Estimates and judgments are constantly evaluated and are based on historical
experience and other factors, including expectations of future events, that may have
a financial impact on the Company and that are believed to be reasonable under the
circumstances.

4. Revenue Recognition :

a. Interest Income on Loans j.

Interest income is recognized in Statement of profit and loss using the effective interest
method for all financial instruments measured at amortised cost. The ‘effective interest
rate’ is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument.

The calculation of the effective interest rate includes transaction costs and fees that
are an integral part of the contract. Transaction costs include incremental costs that
are directly attributable to the acquisition of financial asset.

The Company calculates interest income by applying the EIR to the gross carrying
amount of financial assets other than credit-impaired assets. When a financial asset
becomes credit-impaired, the Company calculates interest income by applying the
effective interest rate to the net amortised cost of the financial asset, If the financial
asset cures and is no longer credit-impaired, the Company reverts to calculating
interest income on a gross basis.

b. Fee and Commission Income^

Fee based income are recognized when they become measurable and when it is
probable to expect their ultimate collection. Commission and brokerage income earned
for the services rendered are recognized as and when they are due.

c. Interest Income on Investments^

Interest income from investments is recognized when it is certain that the economic
benefits will flow to the Company and the amount of Income can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal outstanding
and at the effective interest rate applicable.

d) Investments :

(a) The Company changed its accounting policy in respect of Investment in property
during financial year 2011-12. Investment in Capital Asset (i.e Land at Kalburagi in
Karnataka) revalued and held as stock in trade effective 31^st March, 2012, on the basis
of valuation report given by approved valuer. This change in accounting policy resulted
into creation of revaluation reserve to the extent of Rs.381/58 lakhs in FY 2011-12,
which is carried forward.

Land at Kalburagi is again revalued on 25/03/2024 for Rs.3,85,00,000/- by registered
valuer.

(b) Long term unquoted investments in shares are stated at cost & provision for
diminution in the value of Long Term Investments is made only if, such decline is other
than temporary, in the opinion of the management.

(c) Investment in Land & Building at Vijayapura in Karnataka, acquired against partial
settlement of dues from commission agent at Vijayapura is treated as long term
investment and stated at cost.

The valuation of Investment in property at Vijaypura is carried out by registered valuer
for Rs. 13,37,000/-.

5. Property, Plant & Equipment :

Property, Plant and Equipment are stated at cost of acquisition including incidental
expenses, less accumulated depreciation and accumulated impairment loss, if any, All
costs directly attributable to bringing the asset to the working condition for its intended
use including financing costs are also capitalized.

Depreciation is provided on WDV method on the basis of useful life given under Schedule
II to the Companies Act, 2013 are as under :

a. Office Equipments : 5

b. Computer Hardware : 3

c. Furniture & Fixtures : 10

d. Vehicles : 10

e. Computer Software : 3

Property, Plant & Equipment is derecognized on disposal or when no future economic
benefits are expected from its use. Any gain or loss arising on de recognition of the asset
is recognized in other income / netted off from any loss on disposal in the Statement of
profit and loss in the year the asset is derecognized.

6. Intangible Assets^

Intangible Assets are stated at cost less accumulated amortization and accumulated
impairment loss, if any. Intangible assets comprises of computer software which is
amortized over the estimated useful life. The amortization period is lower of license period
or 5 years which is based on management’s estimates of useful life. Amortisation is
calculated using the straight line method to write down the cost of intangible assets over
their estimated useful lives.

7. Financial Instruments :

a. Recognition and Initial measurement

Financial assets and financial liabilities are recognized when the Company becomes
a party to the contractual provisions of the instruments. Financial assets and
financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities of FVTPL) are added to
or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition, Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at FVTPL are recognized
immediately in Statement of profit and loss.

b. Classification and Subsequent measurement of financial assetsj.

On initial recognition, a financial asset is classified as measured at

- Amortised cost

- FVOCI - debt instruments

- FVOCI - equity instruments

- FVTPL

Amortised Cost :

The Company’s business model is not assessed on an instrument by instrument basis,
but at a higher level of aggregated portfolios being the level at which they are managed.
The financial asset is held with the objective to hold financial asset in order to collect
contractual cash flows as per the contractual terms that give rise on specified dates to
cash flows that are solely payment of principal and interest (SPPI) on the principal amount
outstanding. Accordingly, the Company measures Bank balances, Loans, Trade
receivables and other financial instruments at amortised cost.

FVOCI - debt Instruments :

The Company measures its debt instruments at FVOCI when the instrument is held
within a business model, the objective of which is achieved by both collecting contractual
cash flows and selling financial assets; and the contractual terms of the financial asset
meet the SPPI test.

FVOCI - equity Instruments :

The Company subsequently measures all equity investments at fair value through profit
or loss, unless the Company’s management has elected to classify irrevocably some of its
equity instruments at FVOCI, when such instruments meet the definition of Equity under
Ind AS 32 Financial Instruments and are not held for trading. Financial assets are not
reclassified subsequent to their initial recognition, except if and in the period of the

Company changes its business model for managing financial assets. All financial assets
not classified as measured at amortised cost or FVOCI are measured at FVTPL. This
includes all derivative financial assets.

Subsequent measurement of financial assets :

Financial assets at amortised cost are subsequently measured at amortised cost using
effective interest method. The amortised cost is reduced by impairment losses. Interest
Income, foreign exchange gains and losses and impairment are recognized in statement
of profit and loss. Any gain and loss on de-recognition is recognized in Statement of profit
and loss.

Debt investments at FVOCI are subsequently measured at fair value. Interest income
under effective interest method, foreign exchange gains and losses and impairment are
recognized in Statement of profit and loss. Other net gains and losses are recognized in
OCI. On depreciation, gains and losses accumulated in OCI are reclassified to Statement
of profit and loss.

For equity investments, the Company makes an election on an instrument-by-instrument
basis to designate equity investments as measured at FVOCI. These elected investments
are measured at fair value with gains and losses arising from changes in fair value
recognized in other comprehensive income and accumulated in the reserves. The
cumulative gain or loss is not reclassified to statement of profit and loss on disposal of
the investments. These investments in equity are not held for trading. Instead, they are
held for strategic purpose. Dividend income received on such equity investments are
recognized in Statement of profit and loss.

Equity investments that are not designed as measured at FVOCI are designated as
measured at FVTPL and subsequent changes in fair value are recognized in Statement of
profit and loss.

Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in Statement of profit and loss.

c. Financial liabilities and equity instruments :

Classification as debt or equityj.

Debt and equity instruments issued by the Company are classified as either financial
liabilities or as equity in accordance with the substance of the contractual arrangements
and the definitions of a financial liability and an equity instrument.

Equity Instruments^

An equity instrument is any contract that evidence a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments issued by Company are
recognized at the proceeds received. Transaction costs of an equity transaction are
recognized as a deduction from equity.

Financial Liabilities are classified as measured at amortised cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as held for trading or it is a derivative or
it is designated as such on initial recognition. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognized in Statement of profit and loss. Any gain
or loss on de-recognition is also recognized in Statement of profit and loss.

d. De-recognitionj.

Financial Assets

The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire, or it transfers the rights to receive the contractual cash
flows in a transaction in which substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Company neither transfers nor retains
substantially all of the risks and rewards of ownership and does not retain control of the
financial asset.

If the Company enters into transactions whereby it transfers assets recognized on its
balance sheet, but retains either all or substantially all of the risks and rewards of the
transferred assets, the transferred assets are not derecognized.

Financial Liabilities :

A financial liability is derecognized when the obligation in respect of the liability is
discharged, cancelled or expires. The difference between the carrying value of the financial
liability and the consideration paid is recognized in Statement of profit and loss.

e. Impairment of Financial Instruments :

Equity instruments are not subject to impairment under Ind AS 109, on financial
instruments.

The Company recognizes lifetime expected credit losses (ECL) when there has been a
significant increase in credit risk since initial recognition and when the financial
instrument is credit impaired. If the credit risk on the financial instrument has not
increased significantly since initial recognition, the Company measures the loss allowance
for that financial instrument at an amount equal to 12 month ECL. The assessment of
whether lifetime ECL should be recognized is based on significant increases in the
likelihood or risk of a default occurring since initial recognition. 12 month ECL represents
the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.

When determining whether credit risk of a financial asset has increased significantly since
initial recognition and when estimating expected credit losses, the Company considers
reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis,
including on historical experience and forward looking information.

The Company recognizes lifetime ECL for trade and other receivables. The expected credit
losses on these financial assets are estimated using a provision matrix based on the
Company’s historical credit loss expenses, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as
the forecast direction of conditions at the reporting date, including time value of money
where appropriate. Lifetime ECL represents the expected credit losses that will result from
all possible default events over the expected life of a financial instrument.

Loss allowances for financial assets measured at amortised cost are deducted from the
gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is
recognized in OCI and carrying amount of the financial asset is not reduced in the Balance
Sheet.

8. Finance Costsj

Finance Costs include interest expense computed by applying the effective interest rate
on respective financial instruments measured at amortised cost. Financial instruments
include bank term loans, non-convertible debentures, fixed deposits mobilized,
commercial papers, subordinated debts and exchange differences arising from foreign
currency borrowings to the extent they are regarded as an adjustment to the interest
cost. Finance costs are charged to the Statement of profit and loss.

9. Cash & Cash Equivalents^

Cash and Bank balances include Cash in hand, Bank Balances, Bank Deposits and
Corporate deposits, if any.

10. Cash Flow Statement j.

Cash flows are reported using the indirect method, whereby profit before tax is adjusted
for the effects of transactions of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of income or expenses associated
with investing or financing cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.

11. Taxes on Income _:

Tax expenses comprise current tax, deferred taxes and prior period taxes.

Current income tax at the amount expected to be paid to the tax authorities in
accordance with Income Tax Act.

Deferred income taxes reflect the impact of the current year timing differences between
taxable income and accounting income for the year. Deferred tax is measured based on
current tax rates.

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Mar 31, 2015

1. Basis of Accounting:

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 notified under Sec 211(3C) of the Companies act 1956 which continues to be applicable in respect of Section 133 of the Companies Act, 2013, in terms of General Circular 15/2013 dated Sept 13,2013 of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956/2013 Act, as applicable. 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.

1.1 Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

2. Income Recognition:

Revenue is being recognized in accordance with the Guidance Note on Accrual Basis of Accounting & Accounting Standard on Revenue Recognition issued by the Institute of Chartered Accountants of India and also as per Non Banking Financial Companies, RBI Direction, 1998. Accordingly, wherever there are uncertainties in the realization of income, the same is not accounted for till such time the uncertainty is resolved. The income is also not recognized on Non Performing Assets of the Company, as identified under RBI Directions, 1998.

2.1 Income from Hypothecated Loans:

In respect of Hypothecated Loan agreements, the income is being accounted on accrued basis by applying the implicit rate in the transactions on the amount financed for the period of agreement. Income on Non performing Hypothecated loans (NPA) are not recognized during the year.

2.2 Income from Delayed Payment Charges, Service Charges, Processing charges, Over Due Interest, Penal Interest etc., are accounted on receipt basis.

2.3 Dividend Income if any is accounted for on receipt basis.

2.4 Interest Income from Mortgaged Land Loans / Inter Corporate Loans: Interest Income on loans given is recognized on accrual basis except when there is uncertainties about the recovery exists. Interest income on Non Performing Mortgaged Land Loan Accounts (NPA) is not recognized during the year.

3 Expenses:

The company provides for all expenses on accrual basis.

4 Fixed Assets: (Tangible & Intangible):

All Fixed assets have been valued at historical costs in accordance with the accounting standards issued by I.C.A.I.

5 Depreciation:

Depreciation on Fixed Assets have been provided on the basis of useful life as estimated by the Management on technical advice, in the absence of certain details of each item under different kinds of fixed assets is not readily available.

6 Investments:

(a) The Company changed its accounting policy in respect of Investment in property during financial year 2011 -12. Investment in Capital Asset (i.e Land at Gulbarga) revalued and held as stock in trade effective 31st March, 2012, on the basis of valuation report given by approved value. This change of accounting policy results into creation of revaluation reserve to the extent of Rs.381/58 lakhs.

(b) Long term unquoted / quoted investments in snares are stated at cost & provision for diminution in the value of Long Term Investments is made only if, such decline is other than temporary, in the opinion of the management.

7 Hypothecated Loans:

Hypothecated Loans are stated at net of unmetered / unsacred finance charges.

8 Provision for Taxation:

Provision for taxation has been made after considering disallowances, exemptions and deductions as per the laws laid down and interpreted by various authorities.

9 Contingent Liabilities:

Liabilities though contingent in nature are provided for, if there are reasonable prospects of such liabilities maturing. Other contingent liabilities not acknowledged as debt, are disclosed by way of a note.

10 Stock of Shares: .

The stock of shares held as Long term investments have been valued as per Non Banking Financial companies, RBI Directions, 1998 and Accounting Standard - 13 on Accounting for investments issued by ICAI and the same is as certified by the management.

11 Retirement Benefits:

Since the Company does not provide any kind of retirement benefits to any of its employees, no provision is made for retirement benefits by the Company.

12 Other Accounting Policies:

These are consistent with the generally accepted accounting practices.

13 Repossessed Hypothecated Stock:

The repossessed stock has not been valued & accounted in the books of accounts of the Company. However, the Company maintains separately a Seized Vehicles Register, recording the date of seizure, release and sale of Seized Vehicle in it.

14. Stock in Trade (Investment in Property):

Investment in Land at Gulbarga ii treated as Stock in trade effective from 31st March, 2012, at fair market value! certified by approved value, resulting into creation of revaluation reserve to the extent of Rs.381/58 lakhs.

15. Impairment of Assets:

The carrying values of assets/ cash generating units at each balance sheet date are reviewed for impairment. If |any indication of impairment exists, the recoverable amount of such assets its estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

16. Provisions and Contingencies:

A provision is recognized when the Company has a present obligation as a result of past events and it is profitable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best 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 best estimates. Contingent liabilities are disclosed in Note 6. Contingent assets are not recognized in the financial statements.