Accounting Policies of Hindustan Auto Finance Ltd. Company

Mar 31, 2014

1) BASIS OF ACCOUNTING

The financial statements have been drawn up under the historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and Accounting Standards (AS) as notified under the Companies (Accounting Standards) Rules, 2006.

2. REVENUE RECOGNITION

a) Additional Hire Charges / Lease Charges are in the nature of compensation charges and Penal Charges are on recognised basis.

b) Hire Purchase Income is apportioned equally over the Hire Period. However, for cases financed after 1-4-1997, income has been computed on the IRR method.

c) The prudential Norms prescribed by the RBI regarding the Non-Performing Assets are being followed by the company and no income is recognised in respect of non- performing Assets.

3. STOCK ON HIRE

Stock on Hire has been valued at cost plus total finance charges as reduced by the installments, which have matured during the relevant period.

4. FIXED ASSETS/DEPRECIATION OWN ASSETS

a) Fixed assets are shown at historical cost less accumulated depreciation.

b) Depreciation on fixed assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956 on prorate basis.

LEASED ASSETS

With effect from 1st April'1997 the lease equalization on leased assets acquired after the date is computed as per the mentioned recommended by the Institute of Chartered Accountants of India (ICAI) by charging the cost of assets over the primary lease period through lease equalization account.

5. INVESTMENTS

a) Investments are classified as long term or short term depending upon the intention to sell the same. Generally, investments which are readily realizable and are intended to be held for not more than one year from the date of investments are leading as short term investments.

b) In term of prudential norms of Reserve Bank of India, the long term investments are valued as cost. The quoted short terms investments are valued at cost market price which ever is lower. The unquoted short-term investments are valued at cost or break up value, whichever is lower.

c) Provision for diminution in the value of current investment is made on an individual scrip basis. No provisions are made for temporary diminution in value of permanent investment.

6. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimation. A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent Assets are neither recognized nor disclosed in the financial statements.

7. EARNING PER SHARE

Earning per share is computed after dividing earnings available for equity shareholders with weighted average number of equity shares outstanding at the year end.

---

Mar 31, 2013

1) BASIS OF ACCOUNTING

The financial statements have been drawn up under the historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and Accounting Standards (AS) as notified under the Companies (Accounting Standards) Rules, 2006.

2. REVENUE RECOGNITION

a) Additional Hire Charges lLease Charges are in the nature of compensation charges and Penal Charges are on recognized basis;

b) Hire Purchase Income is apportioned equally over the Hire Period. However, for cases financed after 1-4-1997, income has been computed on the IRR method.

c) The prudential Norms prescribed by the RBI regarding the Non-Performing Assets are being followed by the company and no income is recognized in respect of non- performing Assets.

d)

3. STOCK ON HIRE

Stock on Hire has been valued at cost plus total finance charges as reduced by the installments, which have matured during the relevant period.

4. FIXED ASSETS/DEPRECIATION OWN ASSETS

a) Fixed assets are shown at historical cost less accumulated depreciation.

b) Depreciation on fixed assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956 on prorate basis.

LEASED ASSETS

With effect from 1st April'1997 the lease equalization on leased assets acquired after the date is computed as per the mentioned recommended by the Institute of Chartered Accountants of

Earnings available for 6,57,667 (74,891) equity shareholders

Weighted average 35,02,800 35,02,800 number of equity share

Earning per share 0.19 (0.02)

3. RELATED PARTY DISCLOSURE

Parties where control exist:

Persons having significant controI- l)Subhash Sapra

2)Neera Sapra

Key managerial person- l)Subhash Sapra

2)Neera Sapra

Nature of transaction-Managerial Remuneration Volume of Transaction-CY: Rs, 5,40,000(Dr.)

PY: Rs. 5,40,000(Dr.)

Closing Balance of Transaction-CY: Rs. 90,100(Cr.)

PY: Rs. 12,82,600(Cr.)

India (ICAI) by charging the cost of assets over the primary lease period through lease equalization account.

5. INVESTMENTS

a) Investments are classified as long term or short term depending upon the intention to sell the same. Generally, investments which are readily realizable and are intended to be held for not more than one year from the date of investments are leading as short term investments.

b) In term of prudential norms of Reserve Bank of India, the long term investments are valued as cost. The quoted short terms investments are valued at cost market price whichever is lower. The unquoted short-term investments are valued at cost or break up value, whichever is lower.

c) Provision for diminution in the value of current investment is made on an individual scrip basis. No provisions are made for temporary diminution in value of permanent investment.

6. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance! sheet date and are adjusted to reflect the current best estimation. A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent Assets are neither recognized nor disclosed in the financial statements.

7. EARNING PER SHARE

Earnings per share is computed after dividing earnings available for equity shareholders with Weighted average number of equity shares outstanding at the year end.

---

Mar 31, 2012

1) BASIS OF ACCOUNTING

The financial statements have been drawn up under the historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India and Accounting Standards (AS) as notified under the Companies (Accounting Standards) Rules, 2006.

2. REVENUE RECOGNITION

a) Additional Hire Charges / Lease Charges are in the nature of compensation charges and Penal Charges are on recognised basis.

b) Hire Purchase Income is apportioned equally over the Hire Period. However, for cases financed after 1-4-1997, income has been computed on the IRR method,

c) The prudential Norms prescribed by the RBI regarding the Non-Performing Assets are being followed by the company and no income is recognised in respect of non-performing Assets.

3. STOCK ON HIRE

Stock on Hire has been valued at cost plus total finance charges as reduced by the installments, which have matured during the relevant period.

4. FIXED ASSETS/DEPRECIATION

OWN ASSETS

a) Fixed assets are shown at historical cost less accumulated depreciation.

b) Depreciation on fixed assets is provided on straight-line method at the rates prescribed under Schedule XIV to the Companies Act, 1956 on prorate basis.

LEASED ASSETS

With effect from 1st April'1997 the lease equalization on leased assets acquired after the date is computed as per the mentioned recommended by the Institute of Chartered Accountants of India (ICAI) by charging the cost of assets over the primary lease period through lease equalization account.

5. INVESTMENTS

a) Investments are classified as long term or short term depending upon the intention to sell the same. Generally, investments which are readily realizable and are intended to be held for not more than one year from the date of investments are leading as short term investments.

b) In term of prudential norms of Reserve Bank of India, the long term investments are valued as cost. The quoted short terms investments are valued at cost market price whichever is lower. The unquoted short-term investments are valued at cost or break up value, whichever is lower.

c) Provision for diminution in the value of current investment is made on an individual scrip basis. No provisions are made for temporary diminution in value of permanent investment.

6. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources would be required to settle the obligation, and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimates required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimation. A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent Assets are neither recognized nor disclosed in the financial statements.

7. EARNING PER SHARE

Earning per share is computed after dividing earnings available for equity shareholders with weighted average number of equity shares outstanding at the year end.