Accounting Policies of Hasti Finance Ltd. Company

Mar 31, 2024

2. Material Accounting Policies

The financial statements have been prepared using the significant accounting policies and
measurement bases summarized as below. These policies are applied consistently for all the periods
presented in the financial statements, except where the Company has applied certain accounting
policies and exemptions upon transition to Ind AS.

a) Revenue recognition

Interest income on loans

Interest and processing fee income is recorded on accrual basis using the effective interest rate
(EIR) method in accordance with Ind AS 109. Additional interest/overdue interest/penal
charges, if any, are recognised only when it is reasonably certain that the ultimate collection will
be made.

Other income

All other income is recognized on an accrual basis, when there is no uncertainty in the ultimate
realization/collection.

b) Leasing

The Company as a lessee

At the inception of each lease, the lease arrangement is classified as either a finance lease or an
operating lease, based on the substance of the lease arrangement.

Finance leases

Assets leased by the Company in its capacity as lessee where substantially all the risks and
rewards of ownership vest in the Company are classified as finance leases. A finance lease is
recognized as an asset and a liability at the commencement of the lease, at the lower of the fair
value of the asset and the present value of the minimum lease payments.

Minimum lease payments made under finance leases are apportioned between finance charges
and reduction of the lease liability. The Finance expense is allocated to each period during the
lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable
certainty that the Company will obtain ownership by the end of the lease term, the asset is

depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating leases

Leases in which the lessor does not transfer substantially all the risks and rewards of ownership
of an asset to the lessee are classified as operating leases. Lease rental are charged to statement
of profit and loss.

c) Foreign currencies

Functional and presentation currency

Items included in the financial statement of the Company are measured using the currency of the
primary economic environment in which the entity operates (''the functional currency''). The
financial statements have been prepared and presented in Indian Rupees (INR), which is the
Company''s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency, by applying the
exchange rates on the foreign currency amounts at the date of the transaction. Foreign currency
monetary items outstanding at the balance sheet date are converted to functional currency using
the closing rate. Non-monetary items denominated in a foreign currency which are carried at
historical cost are reported using the exchange rate at the date of the transaction.

Exchange differences arising on monetary items on settlement, or restatement as at reporting
date, at rates different from those at which they were initially recorded, are recognized in the
Statement of Profit and Loss in the year in which they arise.

d) Borrowing costs

Borrowing costs directly attributable to the'' acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

e) Employee benefits
Short-term employee benefits

Short-term employee benefits including salaries, short term compensated absences (such as a
paid annual leave) where the absences are expected to occur within twelve months after the end
of the period in which the employees render the related service, profit sharing and bonuses
payable within twelve months after the end of the period in which the employees render the
related services and non-monetary benefits for current employees are estimated and measured
on an undiscounted basis.

Other long-term employee benefit obligations

Liabilities for leave encashment and compensated absences which are not expected to be settled
wholly within the operating cycle after the end of the period in which the employees render the
related service are measured at the present value of the estimated future cash outflows which is
expected to be paid using the projected unit credit method. The benefits are discounted using
the market yields at the end of the reporting period on Government bonds that have terms
approximating to the terms of the related obligation. Re-measurements as a result of experience
adjustments and changes in actuarial assumptions are recognised in Other Comprehensive
Income.

Post-employment benefit plans are classified into defined contribution plans and defined benefits
plans as under:

Defined contribution plans

The Company has a defined contribution plans namely provident fund, pension fund and
employees state insurance scheme. The contribution made by the Company in respect of these
plans are charged to the Statement of Profit and Loss.

Defined benefit plans

The Company has an obligation towards gratuity, a defined benefit retirement plan covering
eligible employees. Where in the employee will receive on retirement is defined by reference to
employee''s length of service and last drawn salary. Under the defined benefit plans, the
amount that an employee will receive on retirement is defined by reference to the employee''s
length of service and final salary. The legal obligation for any benefits remains with the
Company, even if plan assets for funding the defined benefit plan have been set aside. The
liability recognised in the statement of financial position for defined benefit plans is the present
value of the Defined Benefit Obligation (DBO) at the reporting date less the fair value of plan
assets, if any. Management estimates the DBO annually with the assistance of independent
actuaries. Actuarial gains/losses resulting from re-measurements of the liability/asset are
included in other comprehensive income.

Other long-term employee benefits

The Company also provides the benefit of compensated absences to its employees which are in the
nature of long-term employee benefit plan. Liability in respect of compensated absences
becoming due and expected to availed after one year from the Balance Sheet date is estimated in
the basis of an actuarial valuation performed by an independent actuary using the projected
unit credit method as on the reporting date. Actuarial gains and losses arising from past
experience and changes in actuarial assumptions are charged to Statement of Profit and Loss in
the year in which such gains or losses are determined.

f) Taxation

Tax expense recognized in Statement of Profit and Loss comprises the sum of deferred tax and

current tax except to the extent it recognized in other comprehensive income or directly in
equity.

Current tax comprises the tax payable or receivable on taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect of previous years. Current tax is
computed in accordance with relevant tax regulations. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received after
considering uncertainty related to income taxes, if any. Current income tax relating to items
recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity).

Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or
simultaneously.

Minimum alternate tax (''MAT'') credit entitlement is recognised as an asset only when and to
the extent there is convincing evidence that normal income tax will be paid during the specified
period. In the year in which MAT credit becomes eligible to be recognised as an asset, the said
asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT credit
entitlement. This is reviewed at each balance sheet date and the carrying amount of MAT credit
entitlement is written down to the extent it is not reasonably certain that normal income tax will
be paid during the specified period.

Deferred tax is recognised in respect of temporary differences between carrying amount of assets
and liabilities for financial reporting purposes and corresponding amount used for taxation
purposes. Deferred tax assets are recognised on unused tax loss, unused tax credits and
deductible temporary differences to the extent it is probable that the future taxable profits will
be available against which they can be used. This is assessed based on the Company''s forecast of
future operating results, adjusted for significant non-taxable income and expenses and specific
limits on the use of any unused tax loss. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date. The measurement of deferred
tax reflects the tax consequences that would follow from the manner in which the Company
expects, at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or
simultaneously. Deferred tax relating to items recognised outside statement of profit and loss is
recognised outside statement of profit or loss (either in other comprehensive income or in equity).

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that
are recognised in other comprehensive income or directly in equity, in which case, the current
and deferred tax are also recognised in other comprehensive income or directly in equity
respectively

g) Property, plant and equipment

Recognition and initial measurement

Property, plant and equipment are stated at their cost of acquisition. The cost comprises
purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of
bringing the asset to its working condition for the intended use. Any trade discount and rebates
are deducted in arriving at the purchase price. 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. All other repair and
maintenance costs are recognised in statement of profit or loss as incurred.

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. All other repair
and maintenance costs are recognised in statement of profit or loss as incurred.

Subsequent measurement (depreciation method, useful lives and residual value) Property, plant
and equipment are subsequently measured at cost less accumulated depreciation and
impairment losses. Depreciation on property, plant and equipment is provided on the written-
down method over the useful life of the assets as prescribed under Part ''C'' of Schedule II of the
Companies Act, 2013.

Depreciation is calculated on pro rata basis from the date on which the asset is ready for use or till
the date the asset is sold or disposed. Asset costing less than Rs. 5,000 each are fully depreciated
in the year of capitalization .

The residual values, useful lives and method of depreciation are reviewed at the end of each
financial year.

De-recognition

An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is recognized in the
statement of profit and loss, when the asset is derecognized.

h) Intangible assets

Recognition and initial measurement

Intangible assets are stated at their cost of acquisition. The cost comprises purchase price
including any import duties and other taxes (other than those subsequently recoverable from
taxation authorities), borrowing cost if capitalization criteria are met and directly attributable
cost of bringing the asset to its working condition for the intended use.

Subsequent measurement (amortisation method, useful lives and residual value)

Intangible assets are amortised over a period of 3 years from the date when the assets are
available for use. The estimated useful life (amortisation period) of the intangible assets is
arrived basis the expected pattern of consumption of economic benefits and is reviewed at the
end of each financial year and the amortisation period is revised to reflect the changed pattern,
if any.

i) Impairment of tangible and intangible assets

At each reporting date, the Company assesses whether there is any indication that an asset
may be impaired. If any such indication exists, the Company estimates the recoverable amount
of the asset. Recoverable amount is higher of an asset''s net selling price and its value in use. If
such recoverable amount of the asset or the recoverable amount of the cash generating unit to
which the asset belongs is less than its carrying amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If at the reporting date there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.

j) Financial instruments

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

Date of Initial recognition

Financial assets and liabilities, with the exception of loans, debt securities, deposits and
borrowings are initially recognised on the transaction date, i.e., the date that the Company
becomes a party to the contractual provisions of the instrument. Loans are recognised when
funds are transferred to the customers'' account. The Company recognizes debt securities,
deposits and borrowings when funds reach the Company.

Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual
terms and the business model for managing the instruments. Financial instruments are initially

measured at their fair value, except in the case of financial assets and financial liabilities
recorded at fair value through profit and Loss (''FVTPL''), transaction costs are added to, or
subtracted from, this amount.

Measurement categories of financial assets and liabilities

The Company classifies all of its financial assets based on the business model for managing the
assets and the asset''s contractual terms, measured at either Amortised Cost, FVOCI or FVTPL.

Financial liabilities, other than loan commitments and financial guarantees, are measured at
amortised cost or FVTPL when fair value designation is applied.

k) Non-derivative financial assets and Financial Liabilities

i) Bank balances, Loans, Trade receivables and financial investments at amortised cost The

Company measures Bank balances, Loans, Trade receivables and other financial investments at
amortised cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets
in order to collect contractual cash flows

• The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount outstanding.

The details of these conditions are outlined below.

Business model assessment

The Company determines its business model at the level that best reflects how it manages
groups of financial assets to achieve its business objective.

The Company''s business model is not assessed on an instrument-by-instrument basis, but at a
higher level of aggregated portfolios and is based on observable factors such as:

• How the performance of the business model and the financial assets held within that
business model are evaluated and reported to the entity''s key management personnel

• The risks that affect the performance of the business model (and the financial assets held
within that business model) and, in particular, the way those risks are managed

• How managers of the business are compensated (for example, whether the
compensation is based on the fair value of the assets managed or on the contractual cash
flows collected)

• The expected frequency, value and timing of sales are also important aspects of the
Company''s assessment

The business model assessment is based on reasonably expected scenarios without taking ''worst
case'' or ''stress case'' scenarios into account. If cash flows after initial recognition are realised in a
way that is different from the Company''s original expectations, the Company does not change
the classification of the remaining financial assets held in that business model, but incorporates

such information when assessing newly originated or newly purchased financial assets going
forward.

The SPPI test

As a second step of its classification process the Company assesses the contractual terms of
financial to identify whether they meet the SPPI test.

''Principal'' for the purpose of this test is defined as the fair value of the financial asset at initial
recognition and may change over the life of the financial asset (for example, if there are
repayments of principal or amortisation of the premium/ discount).

The most significant elements of interest within a lending arrangement are typically the
consideration for the time value of money and credit risk. To make the SPPI assessment, the
Company applies judgement and considers relevant factors such as the currency in which the
financial asset is denominated, and the period for which the interest rate is set.

ii) Financial assets or financial liabilities held for trading

The Company classifies financial assets as held for trading when they have been purchased or
issued primarily for short-term profit making through trading activities or form part of a
portfolio of financial instruments that are managed together, for which there evidence of a
recent pattern of short-term profit is taking. Held-for-trading assets and liabilities are recorded
and measured in the balance sheet at fair value. Changes in fair value are recognised in net gain
on fair value changes. Interest and dividend income or expense is recorded in net gain on fair
value changes according to the terms of the contract, or when the right to payment has been
established.

iii) Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at
fair value, the Company may, on initial recognition, irrevocably elect to measure the same either
at FVTOCI or FVTPL. In absence of quoted price, the Fair value of unquoted equity shares has
been calculated as per book value method using latest available audited financial statements of
investee company.

The Company makes such election on an instrument-by-instrument basis. Fair value changes on
an equity instrument is recognised as other income in the Statement of Profit and Loss unless
the Company has elected to measure such instrument at FVTOCI. Fair value changes excluding
dividends, on an equity instrument measured at FVTOCI are recognised in OCI. Amounts
recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss.
Dividend income on the investments in equity instruments are recognised as ''Other Income'' in
the Statement of Profit and Loss.

iv) Financial assets and financial liabilities at fair value through profit or loss

Financial assets and financial liabilities in this category are those that are not held for trading
and have been either designated by management upon initial recognition or are mandatorily
required to be measured at fair value under Ind AS 109.

Financial assets and financial liabilities at FVTPL are recorded in the balance sheet at fair value.
Changes in fair value are recorded in profit and loss with the exception of movements in fair
value of liabilities designated at FVTPL due to changes in the Company''s own credit risk. Such
changes in fair value are recorded in the Own credit reserve through OCI and do not get
recycled to the profit or loss. Interest earned or incurred on instruments designated at FVTPL is
accrued in interest income or finance cost, respectively, using the EIR, taking into account any
discount/ premium and qualifying transaction costs being an integral part of instrument.
Interest earned on assets mandatorily required to be measured at FVTPL is recorded using
contractual interest rate.

Reclassification of financial assets and liabilities

The Company does not reclassify its financial assets subsequent to their initial recognition, apart
from the exceptional circumstances in which the Company acquires, disposes of, or terminates a
business line. Financial liabilities are never reclassified.

Derecognition of financial assets and liabilities

Derecognition of financial assets due to substantial modification of terms and conditions

The Company derecognises a financial asset, such as a loan to a customer, when the terms and
conditions have been renegotiated to the extent that, substantially, it becomes a new loan, with
the difference recognised as a derecognition gain or loss, to the extent that an impairment loss
has not already been recorded. The newly recognised loans are classified as Stage 1 for ECL
measurement purposes.

When assessing whether or not to derecognise a loan to a customer, amongst others, the
Company considers the following factors:

• Change in counterparty

• If the modification is such that the instrument would no longer meet the SPPI criterion

• If the modification does not result in cash flows that are substantially different, the
modification does not result in de recognition. Based on the change in cash flows
discounted at the original EIR, the Company records a modification gain or loss, to the
extent that an impairment loss has not already been recorded.

Derecognition of financial assets other than due to substantial modification

Financial assets

A financial asset is derecognised when the rights to receive cash flows from the financial asset
have expired. The Company also derecognises the financial asset if it has both transferred the

financial asset and the transfer qualifies for derecognition.

A transfer only qualifies for derecognition if either:, the Company has transferred substantially
all the risks and rewards of the asset or has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset. Control is considered to
be transferred if and only if, the transferee has the practical ability to sell the asset in its entirety
to an unrelated third party and is able to exercise that ability unilaterally and without imposing
additional restrictions on the transfer.

When the Company has neither transferred nor retained substantially all the risks and rewards
and has retained control of the asset, the asset continues to be recognised only to the extent of
the Company''s continuing involvement, in which case, the Company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration the Company could be required to pay.

In case when transfer of a part of financial asset qualifies for derecognition, any difference
between the proceeds received on such sale and the carrying value of the transferred asset is
derecognised as a gain or loss on decrease of such financial asset previously under amortised
cost category.

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged,
cancelled or expires. Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability. The difference between the carrying value of the original
financial liability and the consideration paid is recognised in profit or loss.

l) Impairment of financial assets
Loan assets

The Company follows a ''three-stage'' model for impairment based on changes in credit quality
since initial recognition as summarised below:

• Stage 1 includes loan assets that have not had a significant increase in credit risk since initial
recognition or that have low credit risk at the reporting date. Stage 1 loans also include
facilities where the credit risk has improved and the loan has been reclassified from Stage 2.

• Stage 2 includes loan assets that have had a significant increase in credit risk since initial
recognition but that do not have objective evidence of impairment. Stage 2 loans also include

facilities, where the credit risk has improved and the loan has been reclassified from Stage 3.

• Stage 3 includes loan assets that have objective evidence of impairment at the reporting date.

The Expected Credit Loss (ECL) is measured at 12-month ECL for Stage 1 loan assets and at
lifetime ECL for Stage 2 and Stage 3 loan assets. ECL is the product of the Probability of Default,
Exposure at Default and Loss Given Default, defined as follows:

Probability of Default (PD) - The PD represents the likelihood of a borrower defaulting on its
financial obligation (as per "Definition of default and credit-impaired" above), either over the
next 12 months (12 months PD), or over the remaining lifetime (Lifetime PD) of the obligation.

Loss Given Default (LGD) - LGD represents the Company''s expectation of the extent of loss on
a defaulted exposure. LGD varies by type of counterparty, type and preference of claim and
availability of collateral or other credit support.

Exposure at Default (EAD) - EAD is based on the amounts the Company expects to be owed at the
time of default. For a revolving commitment, the Company includes the current drawn balance
plus any further amount that is expected to be drawn up to the current contractual limit by the
time of default, should it occur.

Forward-looking economic information (including management overlay) is included in
determining the 12-month and lifetime PD, EAD and LGD. The assumptions underlying the
expected credit loss are monitored and reviewed on an ongoing basis.

The Company considers various factors while considering the recoverability of credit impaired
advances. These include nature and value of assets, different resolution channels, interest of
potential buyers etc. Considering the typical nature of advances given by the Company, there is
significant uncertainty and variability in timing of resolution of these advances. In reference to
RBI''s prudential norms, the Company does not recognize interest income on these advances on
a conservative basis, and the provisioning is considered using current estimate of realization
which are based on valuation of security/ collateral as at current date.

Trade receivables

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109,
which requires measurement of loss allowance at an amount equal to lifetime expected credit
losses. Lifetime expected credit losses are the expected credit losses that result from all possible
default events over the expected life of trade receivables.

Other financial assets

In respect of its other financial assets, the Company assesses if the credit risk on those financial
assets has increased significantly since initial recognition. If the credit risk has not increased
significantly since initial recognition, the Company measures the loss allowance at an amount
equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit
losses.

When making this assessment, the Company uses the change in the risk of a default occurring
over the expected life of the financial asset. To make that assessment, the Company compares
the risk of a default occurring on the financial asset as at the balance sheet date with the risk of
a default occurring on the financial asset as at the date of initial recognition and considers
reasonable and supportable information, that is available without undue cost or effort, that is
indicative of significant increases in credit risk since initial recognition. The Company assumes
that the credit risk on a financial asset has not increased significantly since initial recognition if
the financial asset is determined to have low credit risk at the balance sheet date.

Write-offs

Financial assets are written off either partially or in their entirety to the extent that there is no
realistic prospect of recovery. Any subsequent recoveries are credited to impairment on financial
instrument on statement of profit and loss.

m) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

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Mar 31, 2015

Corporate Information

Hasti Finance Limited is a Non Banking Finance Company (Non Deposit accepting company) having Registered Office at Chennai. The Company is engaged in financing activities.

1.1 Basis of preparation:

The financial statements of the Company have been prepared under the historical cost convention on a going concern and accrual basis in accordance with the generally accepted accounting principles in India to comply with Accounting Standards notified under rule 7 of the companies (Accounts) Rules, 2014, the provision of Section 133 of the Companies Act, 2013 along with the applicable guidelines issue by Reserve Bank Of India ("RBI") for Non-deposit taking Non-Banking Finance Companies (NBFC-ND). Further, the company follows the prudential norms for income recognition, asset classification and provisioning as prescribed by Reserve Bank of India (RBI) for Non-deposit taking Non-Banking Finance Companies (NBFC-ND).

1.2 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 recognised in the periods in which the results are known / materialise.

1.3 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information. The Company considers all highly liquid financial instruments, which are readily convertible into cash, to be cash equivalents.

1.4 Revenue Recognition:

a. Income on Loan transactions

Interest from interest-bearing assets is recognized on accrual basis. Interest and other dues in the case of nonperforming loans is recognized upon realization, as per the income recognition and asset classification norms prescribed by the RBI. Unrealized interest recognized as income in the previous period is reversed in the month in which the loan is classified as Non Performing.

b. Income from Current and Long-term Investments

Income from dividend on shares of corporate bodies and units of mutual funds is accounted on accrual basis when the Company's right to receive dividend is established.

Interest income on bonds and deposits is recognized on accrual basis.

1.5 Provisions for Standard/Non Performing Assets and Doubtful Debts

The Company provides an allowance for loan receivables based on the prudential norms issued by the RBI relating to income recognition, asset classification and provisioning for non- performing assets. In respect of loans, where interest is not serviced, provision for diminution is made as per the parameter applicable to Non-Performing Advances. Provision on restructured loans and advances is made as per agreement and contract with the party. In addition the Company provides for Standard Assets as required by the directions issued by RBI.

1.6 Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

1.7 Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

1.8 Depreciation

Depreciation on fixed assets is calculated on a straight-line which reflect the management estimate of the useful lives of respective fixed assets and are lesser than or equal to useful life as prescribed in Schedule II of the companies Act, 2013.

1.9 Leases

Leases are classified as operating lease where significant portion of risk and reward of ownership of assets acquired under lease are retained by the lesser.

1.10 Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence.

1.11 Gratuity / Retirement Benefits

The Company's gratuity scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit is calculated by estimating the amount of future benefit that the employees have earned in return for their service in the current and prior periods. This benefit is discounted to determine its present value.

The present value of the obligation under such benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method which recognizes each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at present values of estimated future cash flows. The discounted rates used for determining the present value are based on the market yields on Government Securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the profit and loss account

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statement

1.13 Impairments

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any indications exist, the assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value is use, the estimated future cash flows are discounted to their present value based on average pre-tax borrowing rate of the country where the assets are located, adjusted for risks specific to the asset.

After impairment, depreciation is provided on the assets revised carrying amount over its remaining useful life. A previously recognized impairment loss is increased or decreased depending on changes in circumstances. However, an impairment loss is not decreased to an amount higher than the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in the prior year.

1.14 Earnings per share

Basic and diluted earnings per share are computed in accordance with Accounting Standared-20- Earnings Per Share. Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity share holders by the weighted average number of equity share outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the reporting period. Diluted earnings per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding as at the end of the reporting period.

1.15 Cash flow statement

The cash flow statement is prepared in accordance with indirect method as explained in the Accounting Slandered on cash flow statements (AS) 3 issued by the institute of Chartered Accountants Of India. Cash and Bank Balances that have insignificant risk of change in value including term deposits, which have original durations up to three months, are included in cash and cash equivalents in the cash flow statement.

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Mar 31, 2014

1.1 Basis of preparation

The financial statements of the Company have been prepared under the historical cost convention on a going concern and accrual basis in accordance with the generally accepted accounting principles in India to comply with Accounting Standards notified by under Section 211 (3C) of the Companies Act, 1956 ("the 1956 Act")(which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013Act") in terms of the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable. Further, the company follows the prudential norms for income recognition, asset classification and provisioning as prescribed by Reserve Bank of India (RBI) for Non-deposit taking Non-Banking Finance Companies (NBFC-ND).

1.2 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 recognised in the periods in which the results are known / materialise.

1.3 Cash flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the Company are segregated based on the available information. The Company considers all highly liquid financial instruments, which are readily convertible into cash, to be cash equivalents.

1.4 Revenue Recognition:

a. Income on Loan transactions

Interest income is recognised under the Internal Rate of Return method to provide a constant periodic rate of return on net investment outstanding on the Loan contract. In the case of Non Performing Loans, interest income is recognised upon realisation, as per RBI guidelines. Unrealised interest recognised as income in the previous period is reversed in the month in which the loan is classified as Non Performing.

b. Income from Current and Long-term Investments

Income from dividend on shares of corporate bodies and units of mutual funds is accounted on accrual basis when the Company''s right to receive dividend is established.

Interest income on bonds and deposits is recognised on accrual basis.

1.5 Provisions for Standard/Non Performing Assets and Doubtful Debts

The Company provides an allowance for loan receivables based on the prudential norms issued by the RBI relating to income recognition, asset classification and provisioning for non- performing assets. In addition to the provisioning as per RBI norms, the Company also provides for/writes off the entire receivables, where any of the instalment are overdue for a period exceeding llmonths.

In addition the Company provides for Standard Assets as required by the directions issued by RBI.

1.6 Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

1.7 Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

1.8 Depreciation

Depreciation on fixed assets is provided on Written Down Value at the rates specified in Schedule XIV of the Companies Act, 1956.

1.9 Leases

Leases are classified as operating lease where significant portion of risk and reward of ownership of assets acquired under lease are retained by the lessor.

1.10 Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence.

1.11 Gratuity / Retirement Benefits

The Company''s gratuity scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit is calculated by estimating the amount of future benefit that the employees have earned in return for their service in the current and prior periods. This benefit is discounted to determine its present value.

The present value of the obligation under such benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method which recognizes each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at present values of estimated future cash flows. The discounted rates used for determining the present value are based on the market yields on Government Securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the profit and loss account

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements

1.13 Impairments

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any indications exist, the assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value is use, the estimated future cash flows are discounted to their present value based on average pre-tax borrowing rate of the country where the assets are located, adjusted for risks specific to the asset.

After impairment, depreciation is provided on the assets revised carrying amount over its remaining useful life. A previously recognized impairment loss is increased or decreased depending on changes in circumstances. However, an impairment loss is not decreased to an amount higher than the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in the prior year.

1.14 Earnings per share

The Company reports basic and diluted earning per share in accordance with "Accounting Standard 20 - Earnings per share" prescribed by Companies (Accounting Standards) Rules, 2006. Basic earning per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the reporting period.

Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the reporting period. Diluted earnings per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding as at the end of the reporting period.

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Mar 31, 2013

I. Basis of preparation

The financial statements have been prepared under the historical cost convention on a going concern and accrual basis in accordance with the generally accepted accounting principles in India including Accounting Standards notified by under Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956

The company follows the prudential norms for income recognition, asset classification and provisioning as prescribed by Reserve Bank of India (RBI) for Non-deposit taking Non-Banking Finance Companies (NBFC-ND).

II. 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 recognised in the periods in which the results are known / materialise.

III. Cash and Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into cash, to be cash equivalents.

IV. Revenue Recognition:

Interest income is recognised under the Internal Rate of Return method to provide a constant periodic rate of return on net investment outstanding on the Loan contract. In the case of Non Performing Loans, interest income is recognised upon realisation, as per RBI guidelines. Unrealised interest recognised as income in the previous period is reversed in the month in which the loan is classified as Non Performing.

Interest income on bonds and deposits is recognised on accrual basis.

V. Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence.

VI. Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

VII. Depreciation

Depreciation on fixed assets is provided on Written Down Value at the rates specified in Schedule XIV of the Companies Act, 1956.

VIII. Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

IX. Gratuity / Retirement Benefits

The Company''s gratuity scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit is calculated by estimating the amount of future benefit that the employees have earned in return for their service in the current and prior periods. This benefit is discounted to determine its present value.

The present value of the obligation under such benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method which recognizes each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at present values of estimated future cash flows. The discounted rates used for determining the present value are based on the market yields on Government Securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the profit and loss account

X. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XI. Provisioning under Financing Activity

Provision for Standard Assets is made as per internal estimates, based on past experience, realisation of security, and other relevant factors, on the outstanding amount of Standard Assets for all types of lending subject to minimum provisioning requirements specified by RBI.

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Mar 31, 2012

I. Basis of preparation

The financial statements have been prepared under the historical cost convention on a going concern and accrual basis in accordance with the generally accepted accounting principles in India including Accounting Standards notified by under Section 211 (3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956

The company follows the prudential norms for income recognition, asset classification and provisioning as prescribed by Reserve Bank of India (RBI) for Non-deposit taking Non-Banking Finance Companies (NBFC-ND).

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the method of charging depreciation as more fully described in Note 21.

II. 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 recognised in the periods in which the results are known / materialise.

III. Cash and Cash Equivalents:

The Company considers all highly liquid financial instruments, which are readily convertible into cash, to be cash equivalents.

IV. Revenue Recognition:

Interest income is recognised under the Internal Rate of Return method to provide a constant periodic rate of return on net investment outstanding on the Loan contract. In the case of Non Performing Loans, interest income is recognised upon realisation, as per RBI guidelines. Unrealised interest recognised as income in the previous period is reversed in the month in which the loan is classified as Non Performing.

Interest income on bonds and deposits is recognised on accrual basis.

V Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence.

VI Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

VII Depreciation

Depreciation on fixed assets is provided on Written Down Value at the rates specified in Schedule XIV of the Companies Act, 1956.

VIII Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

IX Gratuity / Retirement Benefits

The Company's gratuity scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit is calculated by estimating the amount of future benefit that the employees have earned in return for their service in the current and prior periods. This benefit is discounted to determine its present value.

The present value of the obligation under such benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method which recognizes each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at present values of estimated future cash flows. The discounted rates used for determining the present value are based on the market yields on Government Securities as at the balance sheet date.

Actuarial gains and losses are recognized immediately in the profit and loss account

X Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XI Provisioning under Financing Activity

Provision for Standard Assets is made as per internal estimates, based on past experience, realisation of security, and other relevant factors, on the outstanding amount of Standard Assets for all types of lending subject to minimum provisioning requirements specified by RBI.

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Mar 31, 2011

I. Accounting Concepts

a. The Accounts have been prepared on historical cost basis.

b. The company generally follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

c. The Company follows Prudential Norms for Income recognition and Provisioning for Non- Performing Assets as prescribed by the Reserve Bank of India for Non Banking Financial Companies.

II. Income Recognition:

Finance charges are accounted under Capital Recovery method. Additional Finance charges are accounted on receipt basis. The interests on Loan amounts given are provided whenever it is receivable. Also in accordance with the guidelines issued by the Reserve Bank of India for Non Banking Financial Companies, Income on Business Assets classified as Non-performing Assets, is recognised on receipt basis.

III. Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence. There being no timing difference during the period, deferred tax provision is not made.

IV. Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

V. Depreciation

Depreciation for the year has been provided for the year at the rate prescribed in Income Tax Act, 1961.

VI. Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

VII. Gratuity / Retirement Benefits

These are accounted for on cash basis

VIII. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

I. Accounting Concepts

a. The Accounts have been prepared on historical cost basis.

b. The company generally follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

II. Income Recognition:

Finance charges are accounted under Capital Recovery method. Additional Finance charges are accounted on receipt basis. The interest on Loan amounts given are provided whichever it is receivable. The interest amount is not provided, where the principle amount in itself is in doubtful. The same shall be provided as and when received.

III. Taxes

Current tax provision has been determined on the basis of relief, deductions etc. available under the Income Tax Act, 1961. Deferred tax is recognized for all timing differences, subject to the consideration of prudence. There being no timing difference during the period, deferred tax provision is not made.

IV. Fixed Assets

Fixed assets are recorded at the cost of acquisition. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location.

V. Depreciation

Depreciation is provided for on Written Down Value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Depreciation on additions deletions to the fixed assets during the year is- provided on pro-rata basis from to the date of such additions deletions as the case may be.

VI. Investments

Long Term investments are valued at cost. Diminution in value if any, which is of a temporary nature, is not provided.

VII. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized not disclosed in the financial statements.