Accounting Policies of Manipal Finance Corporation Ltd. Company

Mar 31, 2024

a. Basis of Preparation and Presentation of Financial Statements - Statement of Compliance

The financial statements of the Company have been prepared to comply with the Indian Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant
provisions of the Companies Act, 2013. The Indian Accounting Standards are prescribed under Section 133 of the Act read
with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2016.

The Company''s financial statements are presented in Indian Rupees, which is also its functional currency. All the values are
rounded off to the nearest thousand.

These financial statements have been prepared on accrual basis under the historical cost convention except for (a) certain
Financial Assets and Liabilities and (b) Defined Employee Benefit Plan Assets, which have been measured at their fair values.
Further, the carrying value of all the items of Property, Plant and Equipment and Investment Property as on the date of
transition has been considered at deemed cost as provided under Ind AS 101 ''First-Time Adoption of Indian Accounting
Standards''.

These financial statements have been approved for issue by the Board of Directors at their meeting held on May 30, 2024 at
Manipal, Karnataka.

The Balance Sheet, the Statement of Changes in Equity and the Statement of Profit and Loss have been prepared and
presented in the format prescribed in Division III of Schedule III to Companies Act, 2013. The Statement of Cash Flows has
been prepared as per the requirements of Ind AS 7 ''Statement of Cash Flows''. The disclosures as prescribed in Division III of
Schedule III to the Companies Act, 2013 have been presented by way of notes forming part of the financial statements along
with other disclosures required under Ind AS. Disclosures as per Ind AS and Division III of Schedule III to the Companies Act,
2013 have been made in this Financial Statement to the extent applicable.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these
estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these
estimates. Differences between the actual results and estimates are recognized in the period in which the results are known /
materialized.

Critical Accounting Estimates

Depreciation and Useful Lives of Property, Plant and Equipment and Investment Property and Decommissioning Liability

Property, Plant and Equipment and Investment Property are depreciated over their estimated useful lives, after taking into
account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in
order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values
are based on Company''s historical experience with similar assets and after taking into account the anticipated technological
changes. In case of significant changes in the estimates in future, the depreciation shall be revised accordingly. The Company
has not made any policy with regard to decommissioning liability for the reasons specified in clause (d) below.

Allowance for Doubtful Debts on Trade Receivables/Loans

When determining the lifetime expected credit losses for trade receivables, 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, based on the Company’s historical experience and credit assessment and including forward-looking
information. Judgements are required in assessing the recoverability of other advances including other receivables and
determining whether a provision against those Loans/receivables is required. Factors considered include relations with the
counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the
risk of non-payment.

Provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds
resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition
and quantification of the liability requires the application of judgement to existing facts and circumstances and these
judgements are subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take
into account changing facts and circumstances.

Employee Benefit Obligations

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of the discount rate,
future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature,
employee benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date.

Deferred Tax Assets

Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based
upon the likely timing and the level of future taxable profits. The amount of total deferred tax assets could change if estimates
of projected future taxable income or tax regulations undergo a change.

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on
intemal/extemal factors. An impairment loss is recognised 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 in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and risks specific to the asset. In determining net selling price, recent market
transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is
used. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The
Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation based on
Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

c. Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date under current market conditions.

The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to
observe inputs employed in their measurement which are described as follows:

ⁱ. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

ii. Level 2 inputs are inputs that are observable, either directly or indirectly, other than quoted prices included within level 1
for the asset or liability.

iii. Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related
market data or Company’s assumptions about pricing by market participants.

d. Property, Plant and Equipment

Freehold land is carried at historical cost. All other items of ''Property, Plant and Equipment'' are stated at historical cost less
accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable
to the acquisition of the items such as purchase price, freight, duties and levies. Such cost includes the cost of replacing parts
of the ''Property, Plant and Equipment'' and the borrowing cost if any, till the date of installation of qualifying asset and any
attributable cost of bringing the asset to its working condition for its intended use. Expenses incurred on start-up,
commissioning of the project including expenditure incurred on test runs and experimental production in respect of new unit if
any, are also capitalized.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
All other repairs and maintenance are charged to Statement of Profit and Loss during the reporting period in which they are
incurred.

An item of ''Property, Plant and Equipment'' and any significant part initially recognized is derecognized upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
Statement of Profit and Loss when the asset is derecognized. Further, when each major inspection is performed, its cost is
recognized in the carrying amount of the item of ''Property, Plant and Equipment'' as a replacement if the recognition criteria
are satisfied. Machinery spare if any which are specific to a particular item of ''Property, Plant and Equipment'' and whose use
is expected to be irregular are capitalized as ''Property, Plant and Equipment''.

Spare parts if any are capitalized when they meet the definition of ''Property, Plant and Equipment'' i.e. when the Company
intends to use these for more than a period of 12 months. The management is of the opinion that, the Property, Plant and
Equipment held by the Company does not involve decommissioning cost and the cost of removal of such assets is not material
considering the size of the Company. Considering this aspect, the Company has not made any policies for capitalizing the
decommissioning cost.

Depreciation on ''Property, Plant and Equipment'' generally is provided on the Straight Line Method over the useful lives of the
assets and residual value in terms of Schedule II to the Companies Act, 2013. Depreciation for the assets purchased/sold
during the period is proportionately charged. Building constructed on the lease hold land is depreciated over the period of
lease or the useful life in terms of Schedule II of the Companies Act 2013, whichever expires earlier. Leasehold land if any, is
amortized over the period of the lease. Improvements to buildings are amortized over the period of remaining useful life of the
building. No further depreciation is charged on assets, where the assets have completed their useful life. The residual values,
useful lives and methods of depreciation of ''Property, Plant and Equipment'' are reviewed at each financial year end and
adjusted prospectively, if appropriate and under such circumstances the appropriate disclosure is being made in the notes to
accounts.

For transition to Ind AS, the Company has elected to continue with carrying value of its Property, Plant and Equipment
recognized as on April 01, 2018 (transition date) measured as per the previous GAAP as the deemed cost of the Property,
Plant and Equipment on the date of transition to Ind AS.

e. Investment Property

Properties, held to earn rentals and/or capital appreciation are classified as investment property and measured and reported at
cost, including transaction costs. It consists of Freehold Buildings that are not intended to be occupied substantially for use by,
or in the operations of, the Company. An investment property is derecognised upon disposal or when the investment property
is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising
on derecognition of property is recognised in the Statement of Profit and Loss in the same period. Investment Properties are
carried at cost less accumulated depreciation. Depreciation is provided in the manner as stated in clause (d) above.

For transition to Ind AS, the Company has elected to continue with carrying value of its Investment Property recognized as on
April 01, 2018 (transition date) measured as per the previous GAAP as the deemed cost of the Investment Property on the date
of transition to Ind AS.

f. Financial Instruments

1. Initial Recognition and Measurement

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the
instrument. All financial assets and liabilities are recognized at Fair Value on initial recognition, except for trade receivable
which is initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities that are not at fair value through profit or loss, are added to the fair value on initial
recognition. Regular way purchase and sale of financial assets are accounted for at trade date, i.e. the date that the Company
commits to purchase or sell the asset.

2. Subsequent Measurement - Non Derivative Financial Instruments
Financial Assets carried at Amortized Cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the
asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on principal amount outstanding.

Financial Assets at Fair Value Through Other Comprehensive Income (FVTOCI)

A financial asset other than equity investment is subsequently measured at fair value through other comprehensive income if it
is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on principal amount outstanding. Where the Company makes an irrevocable election based on its
business model, for its investments which are classified as equity investments, the subsequent changes in the fair value will be
recognized in other comprehensive income.

Financial Assets at Fair Value Through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.
Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs
recognised in the statement of profit and loss as incurred. Subsequently, they are measured at fair value and any gains or losses
are recognised in the statement of profit and loss as they arise.

Financial Liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables
maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity
of these instruments.

3. Derecognition of Financial Instruments

The Company derecognizes a financial asset when the contractual rights to cash flows from the financial asset expires or it
transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized
from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

4. Fair Value of Financial Instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are
based on market conditions and risks existing at each reporting date. The methods used to determine fair value include
discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in
general approximation of value and such value may never be actually realized.

For financial assets and liabilities maturing within one year from the reporting date and which are not carried at fair value, the
carrying amounts approximate fair value due to short maturity of these instruments.

g. Taxes on Income

Income tax expense for the period comprises of current and deferred income tax if any. Income tax expense if any, is
recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity, in which case tax is also recognized in other comprehensive income or in equity, as appropriate.
Current income tax for current and prior periods is recognized in the Statement of Profit and Loss at the amount expected to be
paid to or recovered from the tax authorities, using tax rates and tax laws that have been enacted or substantively enacted by
the Balance Sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences between the carrying amounts of assets
and liabilities in the financial statements and their corresponding tax bases used in the computation of taxable profit. The
Company recognizes a deferred tax asset arising from unused tax losses or tax credit only to the extent that it is probable that
sufficient future taxable profits will be available against which unused tax losses or tax credits can be utilised by the entity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
Deferred tax assets and liabilities are presented in the Balance Sheet after setting off the same against each other.

Deferred tax assets are assessed in accordance with the tax laws in India, which is likely to give future economic benefits in
the form of availability of set off against future income tax liability.

Income tax paid (including tax deducted at source, tax paid on self-assessment or otherwise) and provision for current income
tax if any is presented in the Balance Sheet after setting off the same against each other.

h. Revenue Recognition
Revenue from Operations

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection in accordance
with the provisions of Ind AS 115.

The Company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non¬
Banking Financial Companies. The principal write back pertaining to deposits & debentures (as stated in note 18) has been
directly taken to the credit of Capital Reserve in the Balance Sheet, since the same is in the nature of capital receipt for the
reasons as stated in sub-clause (m) below.

Interest Income

Interest income is recognised by applying the Effective Interest Rate (EIR) to the gross carrying amount of financial assets
other than credit-impaired assets and financial assets classified as measured at FVTPL. Interest income on credit impaired
assets if any, is recognised by applying the effective interest rate to the net amortised cost (net of provision) of the financial
asset.

Dividend Income

Dividend income is recognized when the Company''s right to receive the payment has been established, it is probable that the
economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured
reliably.

Rental Income

Rental income from operating leases is recognized in the Statement of Profit and Loss on straight line basis over the lease term
unless there is another systematic basis which is more representative of the time pattern of the lease. Revenue from lease rental
is disclosed net of indirect taxes, if any.

Rendering of Services

Revenue from rendering services if any is disclosed net of GST and recognized when the outcome of a transaction can be
estimated reliably by reference to the stage of completion of the transaction. The outcome of the transaction can be estimated
reliably when all the following conditions are satisfied:

i) The amount of revenue can be reliably measured,

ii) It is probable that the economic benefits associated with the transaction will flow to the Company,

iii) The stage of completion of the transaction at the end of the reporting period can be reliably measured, and

iv) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Other Income:

Interest on refund of Income Tax is accounted in the year of receipt and Miscellaneous income is accounted as and when
received.

i. Employee Benefits

Short-term Employee Benefits

Employee benefits such as salaries, wages, short-term compensated absences, expected cost of bonus, ex-gratia and
performance linked rewards such as annual variable pay falling due wholly within twelve months of rendering the service are
classified as short-term benefits and are expensed in the period in which the employee renders the related service.

Post Employment Benefits
Defined Contribution Plans

Provident fund scheme and employee state insurance scheme are the Company''s defined contribution plans in which both the
employee and the Company contribute monthly at a stipulated rate. The contribution paid or payable under the scheme is
recognized during the period in which the employee renders the related service. The Company has no liability for future
benefits other than its annual contribution and recognises such contributions as an expense in the period in which employee
renders the related service.

Defined Benefit Plans

The Company provides for gratuity, a defined benefit plan covering eligible employees. The gratuity plan provides a lump-sum
payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the
respective employee''s salary and tenure of employment with the Company.

The Company''s contribution towards gratuity is invested in a Group Gratuity Policy with the Life Insurance Corporation of
India. Deficit/surplus of present value of obligations (under gratuity policy) over the fair value of gratuity plan assets is
recognized in the Balance Sheet as an asset or liability. The same is determined based on an independent actuarial valuation
using the Projected Unit Credit Method. Gains and losses through remeasurement of the net gratuity liability/asset are
recognized in other comprehensive income and is reflected in other equity and the same is not eligible to be reclassified
subsequently to profit or loss. Premium expense incurred to keep in effect such a group gratuity policy is recognized in the
Statement of Profit and Loss as employee benefit expense in the year such premium falls due.

Other Long Term Employment Benefits

The company has recognised liability in respect of leave encashment i.e. the provision for compensated absences as a long
term employee benefit. The same has been made on an estimated basis, considering the fact that the amount involved therein is
not material.

j. Share Capital, Share Premium and Dividend Distribution

Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares if any, are shown in
equity as a deduction (net of tax) from the proceeds. Par value of the equity share is recorded as share capital and the amount
received in excess of the par value is classified as share premium.

The Company recognizes a liability to make cash distributions to equity holders when the distribution is authorized and the
distribution is no longer at the discretion of the Company. A distribution is authorized when it is approved by the shareholders.
A corresponding amount is recognized directly in other equity along with any tax thereon.

Preference shares are classified as shares entitled for preferential right over dividend (before the equity shareholders). A
preference share that provides for redemption a specific date or at the option of holder contains a financial liability.
Accordingly the same will be recognised as financial liabilities and any payment of dividend in relation to these shares shall be
considered as Finance cost in accordance with provisions of Ind AS 109.

k. Exceptional Items

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their
disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items
are disclosed separately as exceptional items.

l. Lease Transactions
As a Lessee:

Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.

The Company has adopted Ind AS 116 effective 1st April, 2019, using the modified retrospective method, without giving
effect to opening balance of retained earnings.

The Company’s lease asset (taken on short term) classes wholly consist of operating leases for Buildings. The Company
assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether
a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the
period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU”) and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term
leases) and leases of low value assets if any. For these short-term and leases of low value assets if any, the Company
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are
depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the
underlying asset

The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted
using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease
liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the
carrying amount to reflect the lease payments made.

A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index
or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets

Right of Use asset (ROU Asset) have been separately presented in the Balance Sheet as a part of Property, Plant and
Equipment. Corresponding lease liabilities are being disclosed as other financial liabilities either as current or non current
depending on the period of reversal. and lease payments have been classified as financing cash flows.

As Lessor:

Leases are classified as Finance Lease or Operating Lease, in the manner stated above.

Lease income is recognised in the Statement of Profit and Loss on straight-line basis over the lease term unless there is another
systematic basis which is more representative of the time pattern of the lease. Revenue from lease rental is disclosed net of
indirect taxes, if any.

| m. Capital Reserve |

The principal write back pertaining to deposits, debentures and Subordinated debts as stated in Note no. 18.01, is in the nature
of capital receipt. The stand taken by the Company is also duly supported by the decision of Jurisdictional High Court
i.e.Honorable High Court of Karnataka, as reported in 285 ITR 310 (2006) (CIT Vs ICDS Limited) wherein it is held that
surplus on purchase of own debentures is a Capital Receipt, not subject to tax and 249 CTR 214 (2011) (CIT Vs Compaq
Electric Limited) wherein it was held that the waiver of the loan is a Capital receipt. In the case of the Company viz. CIT Vs
Manipal Finance Corporation Limited (ITA No. 795 & 794/2008) the Hon. High Court of Karnataka has dismissed the appeal
filed by the department on the similar grounds.Considering the above, the same has been directly taken to the credit of Capital
Reserve in the Balance Sheet

n. Borrowing Cost

Borrowing cost if any, includes interest expense calculated using the effective interest method and finance expenses in respect
of assets acquired on finance lease if any.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset, are capitalized/
inventoried as a part of cost of such asset till such time the asset is ready for its intended use. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its intended use.

All other borrowing costs are recognized as expenses in the period in which they are incurred.

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Mar 31, 2015

A. 1) The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting

Principles in India to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements are prepared under the historic cost convention in accordance with the provisions of the Companies Act, 2013 as adopted consistently by the Company. All significant items of income & expenditure are accounted on accrual system of accounting. 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 accounting policy for depreciation on Fixed Assets, as more fully described under para G below.

2) The company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non-Banking Financial Companies. Lease Equalization is computed as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India, since the Company has not entered into any new lease transactions, after the date on which the Accounting Standard 19 became applicable.

3) Income by way of "Interest" & "Rent" is recognized on the time proportionate method. "Dividend income" is recognized when the unconditional right to receive the income is established.

Interest on Income Tax refund and miscellaneous income are accounted as and when received, since the same are considered to be due on the date of receipt.

B. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

C. Investments held as long term, if any, are valued at cost. Provision for diminution in the value of the investments is made wherever the management is of the opinion that such decline is other than temporary.

D. Investments held as other than long term investments, if any, are valued at cost or net realizable value which ever is lower.

E. Stock in trade is valued at cost or net realizable value whichever is lower except for unquoted shares, which are valued at cost or breakup value, whichever is lower.

F. Fixed Assets are shown at cost or revalued amount as the case may be, less Depreciation. The lease hold land shown at revalued amount. The revalued amount on land has not been amortized to revaluation reserve. The Company has framed the policy of amortizing such value, on termination of lease. The Depreciation on the revalued portion of Buildings (both lease hold and free hold) (i.e. excess of value after revaluation over the actual cost) has been adjusted to the revaluation reserve till 31st March, 2014. Such depreciation fully charged to statement of profit and loss since 1st April, 2014, in the manner provided under Schedule II to the Companies Act, 2013.

G. Depreciation:

Till 31st March, 2014:

1) In respect of assets acquired prior to 1st October, 1987 depreciation is charged at the rates already arrived at after taking into consideration the effective life of the asset.

2) In respect of assets acquired on or after 1st October, 1987, other than those given on lease, the depreciation is charged under straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956.

3) Depreciation on leased movable assets is accounted on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Lease Equalization represents the excess of Principal balance recovery over statutory depreciation.

4) Depreciation on buildings constructed on leasehold lands, is accounted by a method under which the asset is written off over the lease period.

With effect from 1st April, 2014

The depreciation for the current year has been provided, by reworking the useful life of the asset and considering the residual value in accordance with the Schedule II to the Companies Act, 2013. Accordingly the depreciable value (viz. Cost of the Asset minus residual value) of all assets (other than lease hold building) are being depreciated under straight line method prorata, over the useful life/remaining useful life as the case may be. The depreciation on lease hold buildings provided on straight line basis prorata, in such a manner that the asset is fully written off over the period/remaining period of the lease or over the useful life/ remaining useful life, where such useful life/remaining useful life is less than the period of the lease/remaining period of the lease, as the case may be. Lease equalization written back fully in the case of leases, since the useful life of such assets expired.

In the cases where the remaining useful life has expired before 1st April, 2014, the whole of the depreciable amount (viz. Cost of the Asset minus residual value) has been charged off to the statement of profit and loss, by exercising the option given under Schedule II to the Companies Act, 2013.

H. Employee Benefit:

The Company's "Retirement Benefit Plan" and "Other Benefit Plans" comprises of Contribution to Provident Fund, Employee State Insurance and Gratuity. Contribution to Provident Fund and Employee State Insurance is being made at pre-determined rates and are charged to the Statement of Profit & Loss. The Company's liability towards gratuity to employees is covered by group gratuity policy with LIC of India and accordingly the premium paid, charged to the Statement of profit & loss. Deficit of present value of obligations (under Gratuity policy) over the fair value of Gratuity plan assets, duly charged to the Statement of profit and loss, on year to year basis. Provision for leave encashment made on estimated basis.

There are no other retirement benefits/other benefits are being provided by the Company.

I. Taxes on Income:

The Company has charged off the Current Income Tax to the Statement of Profit and Loss. Deferred Tax Assets/Liabilities recognised/provided in accordance with the Accounting Standard 22. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date, on the timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax Asset is recognised, subject to the considerations of prudence. Deferred tax asset so recognised, is being netted off to deferred tax liability or vice versa. Advance Income Tax Paid (including Tax deducted at source, tax paid on self assessment or otherwise) and provision for current Income Tax (if any) are presented in the Balance Sheet after setting off the same against each other.

J. The principal write back pertaining to deposits, debentures and Subordinated debts as stated in note no. 2.01, is in the nature of capital receipt. The stand taken by the Company is also duly supported by the decision of Jurisdictional High Court i.e. Honourable High Court of Karnataka, as reported in 285 ITR 310 (2006) (CIT Vs ICDS Limited) wherein it is held that surplus on purchase of own debentures is a Capital Receipt, not subject to tax and 249 CTR 214 (2011) (CIT Vs Compaq Electric Limited) wherein it was held that the waiver of the loan is a Capital receipt. In the case of the Company viz. CIT Vs Manipal Finance Corporation Limited (ITA No. 795 & 794/2008) the Hon. High Court of Karnataka has dismissed the appeal filed by the department on the similar grounds. Considering the above, the same has been directly taken to the credit of Capital Reserve in the Balance Sheet.

K. Borrowing cost are recognized as an expense in the year in which they are incurred except those which are directly attributable to acquisition/construction of qualifying fixed assets, (as defined under Accounting Standard 16), till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of the asset.

L. Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. The Company has framed the policy of impairing the asset, when the carrying value of the assets exceeds its recoverable amount, under the circumstances when the Company is having the sources of information (whether internal or external) that an impairment loss may have occurred. Accordingly, impairment losses will be charged to profit and loss account in the year in which an asset is identified as impaired. The impairment losses recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

N. 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. Provisions not made in the account (which otherwise should have been made) are disclosed by way of appropriate note. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

O. Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

P. Lease rent on cancellable operating lease is recognised as Income in the Statement of Profit and Loss.

Q. Based on the nature of activities of the Company, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

23.02: The company has been incurring substantial losses over the last few years and major portion of its funds are blocked in non-

performing assets. In view of the same there is considerable uncertainty that the company will continue as a going concern and meet its commitments to its creditors. The accounts however have been prepared on the going concern basis in view of management's efforts to settle the liabilities with the debenture holders and subordinated debt holders by exploring the possibility of submitting a new scheme and or settlement at discounted rates etc. as detailed in Note No. 5.01 and the management is being hopeful of recovery of dues from borrowers so that dues of creditors can be settled. Accordingly the management is of the opinion that the losses as aforesaid and also the circumstances as stated in note 5.01 of the financials statement will not adversely affect the financial position of the Company.

23.03: The company has not recognised the net deferred tax asset which constitutes mainly of carry forward losses, excess depreciation

claimed in Income Tax and Provisions for doubtful debts, as a matter of prudence.

23.04: Disclosures in respect of related parties with whom transactions have taken place during the year:

A. Key Management Personnel and his relatives Sri T. Narayana M. Pai, Managing Director

Sri T. Sanjay Pai, Chief Financial Officer

B. Other related Companies

Vedachala Electronics and Financial Services Pvt. Limited Manipal Housing Finance Syndicate Limited

23.05: Contingent & other Liabilities:

A. Liability on debentures assigned to Vedachala Electronics and Financial Services Private Limited inclusive of interest accrued is Rs. 17,99 thousand. (P.Y. Rs. 17,99 thousand), without considering interest due on or after 1st day of July, 2002.

B. Liability in respect of damages and others in respect of suits against the Company before various Courts, Consumer Courts etc. (in respect of repayment of deposits/debentures/debts with interest & other costs) has not been quantified and provided, due to lack of information with the company and also considering the fact that many of such customers have approached the Company for settlement at discounted rates. The collection of information is under process.

C. No provision made for disputed income tax liability for various years wherever department has preferred an appeal before the Tribunal, High Court. The question of quantification of liability thereon, does not arise, for the reason that the cases were allowed in favour of the Company, by the lower appellate authorities.

23.06: The Management of the Company is of the opinion that the directors of the Company are not disqualified u/s 164(2) of Companies Act, 2013,

[in spite of the fact that the Company has stopped repaying matured Debentures/debts/deposits and interest thereon as detailed in note no. 5.01], for the reason that the Company is exploring the possibility of presenting a new scheme of arrangement, as detailed in the aforesaid note.

The Director of the Company Sri Chandappa R. Sherigar is the director of another Company. As evident from the records/documents produced before the Company, the another company has also stopped payment of matured deposits/debentures and interest thereon after 30th June, 2002. The Company has received a letter from him that he is not disqualified u/s 164(2) of Companies Act, 2013 for the reason that the another Company is exploring the possibility of making an application before the Hon'ble High Court of Karnataka u/s 391 of the Companies Act, 1956 for restructuring of its debts.

23.07: The assets of the Company are not valued, considering the cost involved therein. However the management is of the opinion that the carrying

cost of the asset (including that of leased assets after considering the Lease equalization Charge) does not exceed its recoverable value. Further the Company does not have any information whether internal or external, that indicates that "impairment loss may have occurred". Accordingly the question of impairment of assets does not arise.

23.08: The Company has not carried on any non banking business other than repayment of liability out of recoveries. All the payments have been

centralized in head office. Powers are not given to the Branches to incur the expenses. However to have the effective control and as required by the provisions of Companies Act, 2013, the Company has appointed the concern of Chartered Accountant as Internal Auditors of the Company.

23.09: Employee Benefits:

Brief description of the Plans:

a) The Company has two schemes for long-term benefits such as provident fund and gratuity. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through trustees/appropriate authorities. The Company's defined contribution plan is employees' provident fund (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) wherein the Company has no further obligation beyond making the contributions.

The Company is also contributing towards Employee State Insurance Plan, as per statutory requirements, wherein the Company has no further obligation beyond making the contributions.

The Company is also providing employee benefit by way of encashment of earned leave. The provision for the same has been made on estimated basis. The amount involved therein is not material, considering the size of the Company. The Company has not opted for actuarial valuation, considering the cost involved and also the concept of materiality.

The Company's defined benefit plan is gratuity.

b) Charge to the Profit and Loss Account based on contributions:

The Company's contribution to Provident Fund charged to Statement of Profit and Loss during the year is Rs. 58 thousands. (P.Y. Rs. 58 thousands).

The Company's Contribution to Employee State Insurance Plan charged to Statement of Profit and Loss during the year is Rs. 19 thousands (P.Y. Rs. 20 thousands).

The Companies liability towards gratuity to employees covered by group gratuity policy with LIC of India. Premium paid on this account is Rs. 60 thousands (P.Y. Rs. 36 thousands).

The detail of provision for leave encashment is as under: Provision as on 1st April, 2014 Rs. 88 thousands (P.Y. Rs. 88 thousands) Amount charged to the Statement of profit & loss during the year Rs. Nil (P.Y. Rs. Nil). Actual payment during the year is Nil (P.Y. Rs. Nil). provision as on 31st March, 2015 Rs. 88 thousands (P.Y. Rs. 88 thousands).

c) Disclosures for defined gratuity benefit plans based on actuarial reports obtained from Life Insurance Corporation of India as on 31st March, 2015:

Valuation Method: Projected Unit Credit Method.

23.10: In the opinion of the Board of Directors, the assets listed under the head Non Current Assets & Current Assets (other than Fixed Assets and

Non Current Investments) in the Balance Sheet (viz: assets covered under Note No. 7 to 12), have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

23.11: The Company has earned Profit during the year and also during immediate previous financial year i.e. year ending 31st March, 2014, due to

Exceptional Income as stated in Note 20 and Extraordinary Income as stated in Note 21.

23.12: The Company is operating under one Geographical and Business segment. Therefore the question of making disclosures as required under

Accounting Standard 17 does not arise.

23.13: The nature of pending litigations have been disclosed in note 23.05. However the impact on the financial position of the Company is not

ascertainable for the present, for the reasons as mentioned therein.

23.14: The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

23.15: The Company is not required to transfer any amount to the investor education and protection fund for the reason that there are no unclaimed

deposits/debentures/subordinated debts as on 31st March, 2015 and also for the reasons as given in note 5.01.

23.16: Previous Year's amounts are regrouped/reclassified/rearranged, wherever necessary.

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Mar 31, 2014

A. 1) The Financial statements are prepared to comply in all material aspects with applicable accounting principles in India, the relevant provisions of Companies Act, 1956 and mandatory Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 (hereinafter referred to as "Accounting Standard" in this Schedule). The financial statements are prepared under the historic cost convention in accordance with the provisions of the Companies Act, 1956 as adopted consistently by the Company.

2) The company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non-Banking Financial Companies. Lease Equalization is computed as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India, since the Company has not entered into any new lease transactions, after the date on which the Accounting Standard 19 became applicable.

3) Income byway of "Interest" & "Rent" is recognized on the time proportionate method. "Dividend income" is recognized when the unconditional right to receive the income is established.

Interest on Income Tax refund and miscellaneous income are accounted as and when received.

B. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

C. Investments held as long term are valued at cost. Provision for diminution in the value of the investments is made wherever the management is of the opinion that such decline is other than temporary.

D. Investments held as other than long term investments if any, are valued at cost or net realizable value

whichever is lower. .

E. Stock in trade is valued at cost or net realizable value whichever is lower except for unquoted shares, which are valued at cost or breakup value, whichever is lower.

F. Fixed Assets are shown at cost or revalued amount as the case may be, less Depreciation. The lease hold land shown at revalued amount. The revalued amount has not been amortized to revaluation reserve. The Company has framed the policy of amortizing such value, on termination of lease.

G. Depreciation: .

1.) In respect of assets acquired prior to 1st October, 1987 depreciation is charged at the rates already arrived at after taking into consideration the effective life of the asset.

2) In respect of assets acquired on or after 1st October, 1987, other than those given on lease, the depreciation is charged under straight-line method at the'' rates specified in Schedule XIV to the Companies Act, 1956.

3) Depreciation on leased assets is accounted bn straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Lease Equalization represents the excess of Principal balance recovery over statutory depreciation.

4) Depreciation on buildings constructed on leasehold lands, is accounted by a method under which the asset is written off over the lease period.

H. Employee Benefit:

The Company''s "Retirement Benefit Plan" and "Other Benefit Plans" comprises of Contribution to Provident Fund, Employee State Insurance and Gratuity. Contribution to Provident Fund and Employee State Insurance is being made at pre-determined rates and are charged to the Statement of Profit & Loss. The Company''s liability towards gratuity to employees is covered by group gratuity policy with LIC of India and accordingly the premium paid, charged to the Statement of profit & loss. Deficit of present value of obligations (under Gratuity policy) over the fair value of Gratuity plan assets, duly charged to the Statement of profit and loss, on year to year basis. Provision for leave encashment made on estimated basis.

There are no other retirement benefits/other benefits are being provided by the Company.

I. Taxes on Income:

The Company has charged off the Current Income Tax to the Statement of Profit and Loss. Deferred Tax Assets/Liabilities recognised/provided in accordance with the Accounting Standard 22. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet ¦ date, on the timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax Asset is recognised, subject to the considerations of prudence. Deferred tax asset so recognised, is being netted off to deferred tax liability or vice versa. Advance Income Tax Paid (including Tax deducted at source, tax paid on self assessment or otherwise) and provision for current Income Tax (if any) are presented in the Balance Sheet after setting off the same against each other.

J. The principal write back pertaining to deposits, debentures and Subordinated debts as stated in Note No. 2.01, is in the nature of capital receipt. The stand taken by the Company is also duly supported by the decision of Jurisdictional High Court i.e. Honourable High Court of Karnataka, as reported in 285 ITR 310 (2006) (CIT Vs ICDS Limited) wherein it is held that surplus on purchase of own debentures is a Capital Receipt, not subject to tax and 249 CTR 214 (2011) (CIT Vs Compaq Electric Limited) wherein it was held that the waiver of the loan is a Capital recejpt. Further the Board has passed the resolution long back, not to withdraw any amount from the aforesaid reserve at any time for declaration of dividend. Considering all above the same has been directly taken to the credit of Capital Reserve in the Balance Sheet.

K. Borrowing cost are recognized as an expense in the year in which they are incurred except which are directly attributable to acquisition/construction of qualifying fixed assets, (as defined under Accounting Standard 16), till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of the asset.

L. Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. The Company has framed the policy of impairing the asset, when carrying value of the assets exceeds its recoverable amount, under the circumstances when the Company is having the sources of information (whether internal or external) that an impairment loss may have occurred. Accordingly, impairment losses will be charged to profit and loss account in the year in which an asset is identified as impaired. The impairment losses recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

N. 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 outflow of resources. Provisions not made in the account (which otherwise should have been made) are disclosed by way of appropriate note. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

O. Cash Flow Statement prepared under Indirect Method, as prescribed by Accounting Standard 3. Term Deposit with maturity period exceeding 3 months, earmarked bank balances and Deposits kept as margin money/security etc. are not considered as "cash and cash equivalent", in the Cash Flow Statement.

P. Lease rent on cancellable operating lease recognised as Income in the Statement of Profit and Loss.

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Mar 31, 2013

A. 1) The Financial statements are prepared to comply in all material aspects with applicable accounting principles in India, the relevant provisions of Companies Act, 1956 and mandatory Accounting Standards notified by the Companies (Accounting Standard) Rule, 2006 (hereinafter referred to as "Accounting Standard" in this Schedule). The financial statements are prepared under the historic cost convention in accordance with the provisions of the Companies Act, 1956 as adopted consistently by the Company.

2) The company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non-Banking Financial Companies. Lease Equalization is computed as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India, since the Company has not entered into any new lease transactions, after the date on which the Accounting Standard 19 became applicable.

3) Income by way of "Interest" & "Rent" is recognized on the time proportionate method. "Dividend income" is recognized when the unconditional right to receive the income is established.

Interest on Income Tax refund and miscellaneous income are accounted as and when received.

B. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

C. Investments held as long-term are valued at cost. Provision for diminution in the value of the investments is made wherever the management is of the opinion that such decline is other than temporary.

D. Investments held as other than long term investments if any, are valued at cost or net realizable value which ever is lower.

E. Stock in trade is valued at cost or net realizable value whichever is lower except for unquoted shares, which are valued at cost or breakup value, whichever is lower.

F. Fixed Assets are shown at cost or revalued amount as the case may be, less Depreciation. The lease hold land shown at revalued amount. The revalued amount has not been amortized to revaluation reserve. The Company has framed the policy of amortizing such value, on termination of lease.

G. Depreciation:

1) In respect of assets acquired prior to 1st October, 1987 depreciation is charged at the rates already arrived at after taking into consideration the effective life of the asset.

2) In respect of assets acquired on or after 1st October, 1987, other than those given on lease, the depreciation is charged under straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956.

3) Depreciation on leased assets is accounted on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Lease Equalization represents the excess of Principal balance recovery over statutory depreciation.

4) Depreciation on buildings constructed on leasehold lands, is accounted by a method under which the asset is written off over the lease period.

H. Employee Benefit:

The Company''s "Retirement Benefit Plan" and "Other Benefit Plans" comprises of Contribution to Provident Fund, Employee State Insurance and Gratuity. Contribution to Provident Fund and Employee State Insurance is being made at pre-determined rates and are charged to the Statement of Profit & Loss. The Company''s liability towards gratuity to employees is covered by group gratuity policy with LIC of India and accordingly the premium paid, charged to the Statement of profit & loss. Deficit of present value of obligations (under Gratuity policy) over the fair value of Gratuity plan assets, duly charged to the Statement of profit and loss, on year to year basis. Provision for leave encashment made on estimated basis.

There are no other retirement benefits/other benefits are being provided by the Company.

I. Taxes on Income:

The Company has charged off the Current Income Tax to the Statement of Profit and Loss. Deferred Tax Assets/Liabilities recognised/provided in accordance with the Accounting Standard 22. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date, on the timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax Asset is recognised, subject to the considerations of prudence. Deferred tax asset so recognised, is being netted off to deferred tax liability or vice versa. Advance Income Tax Paid (including Tax deducted at source, tax paid on self assessment or otherwise) and provision for current Income Tax (if any) are presented in the Balance Sheet after setting off the same against each other.

J. The principal write back pertaining to deposits, debentures and Subordinated debts as stated in Note No. 2.01, is in the nature of capital receipt. The stand taken by the Company is also duly supported by the decision of Jurisdictional High Court i.e. Honourable High Court of Kamataka, as reported in 285 ITR 310 (2006) (CIT Vs ICDS Limited) wherein it is held that surplus on purchase of own debentures is a Capital Receipt, not subject to tax and 249 CTR 214 (2011) (CITVs Compaq Electric Limited) wherein it was held that the waiver of the loan is a Capital receipt. Further the Board has passed the resolution long back, not to withdraw any amount from the aforesaid reserve at any time for declaration of dividend. Considering all above the same has be^n directly taken to the credit of Capital Reserve in the Balance Sheet.

K. Borrowing cost are recognized as an expense in the year in which they are incurred except which are directly attributable to acquisition/construction of qualifying fixed assets, (as defined under Accounting Standard 16), till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of the asset.

L. Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. The Company has framed the policy of impairing the asset, when carrying value of the assets exceeds its recoverable amount, under the circumstances when the Company is having the sources of information (whether internal or external) that an impairment loss may have occurred. Accordingly, impairment losses will be charged to profit and loss account in the year in which an asset is identified as impaired. The impairment losses recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

N. 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 outflow of resources. Provisions not made in the account (which otherwise should have been made) are disclosed by way of appropriate note. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

O. Cash Flow Statement prepared under Indirect Method, as prescribed by Accounting Standard 3. Term Deposit with maturity period exceeding 3 months, earmarked bank balances and Deposits kept as margin money/security etc. are not considered as "cash and cash equivalent", in the Cash Flow Statement.

P. Lease rent on cancellable operating lease recognised as Income in the Statement of Profit and Loss.

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Mar 31, 2012

A. 1) The Financial statements are prepared to comply in all material aspects with applicable accounting principles in India, the relevant provisions of Companies Act, 1956 and mandatory Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 (hereinafter referred to as "Accounting Standard" in this Schedule). The financial statements are prepared under the historic cost convention in accordance with the provisions of the Companies Act,

2) The company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non-Banking Financial Companies. Lease Equalization is computed as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India, since the Company has not entered into any new lease transactions, after the date on which the Accounting Standard 19 became applicable.

3) Income by way of "Interest" & "Rent" is recognized on the time proportionate method. "Dividend income" is recognized when the unconditional right to receive the income is established. Interest on Income Tax refund and miscellaneous income are accounted as and when

B. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period

C. Investments held as long term are valued at cost. Provision for diminution in the value of the investments is made wherever the management is of the opinion that such decline is other than temporary.

D. Investments held as other than long term investments if any, are valued at cost or net realizable value whichever is lower.

E. Stock in trade is valued at cost or net realizable value whichever is lower except for unquoted shares, which are valued at cost or breakup value, whichever is lower.

F. Fixed Assets are shown at cost or revalued amount as the case may be, less Depreciation. The leasehold land shown at revalued amount. The revalued amount has not been amortized to revaluation reserve. The Company has framed the policy of amortizing such value, on termination of lease.

G. Depreciation:

1) In respect of assets acquired prior to 1st October 1987, depreciation is charged at the rates already arrived at after taking into consideration the effective life of the asset.

2) In respect of assets acquired on or after 1!t October 1987, other than those given on lease, the depreciation is charged under straight-line method at the rates specified in Schedule XIV to the

3) Depreciation on leased assets is accounted on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Lease Equalization represents the excess of principal balance recovery over statutory depreciation.

4) Depreciation on buildings constructed on leasehold lands, is accounted by a method under which the asset is written off over the lease period.

H. Employee Benefit:

The Company's "Retirement Benefit Plan" and "Other Benefit Plans" comprises of Contribution to Provident Fund, Employee State Insurance and Gratuity. Contribution to Provident Fund and Employee State Insurance is being made at pre-determined rates and are charged to the Statement of Profit & Loss. The Company's liability towards gratuity to employees is covered by group gratuity policy with LIC of India, and accordingly the premium paid, charged to the Statement of profit & loss. Deficit of present value of obligations (under Gratuity policy) over the fair value of Gratuity plan assets, duly charged to the Statement of profit and loss, on year to year basis. Provision for leave encashment made on estimated basis.

There are no other retirement benefits/other benefits are being provided by the Company.

The Company has charged off the Current Income Tax to the Statement of Profit and Loss. Deferred Tax Assets/Liabilities recognized/provided in accordance with the Accounting Standard 22. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date, on the timing differences being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Asset is recognized, subject to the considerations of prudence. Deferred tax asset so recognized, is being netted off to deferred tax liability or vice versa. Advance Income Tax Paid (including Tax deducted at source, tax paid on self assessment or otherwise) and provision for current Income Tax (if any) are presented in the Balance Sheet after setting off the same against each other.

j. The principal write back pertaining to deposits, debentures and Subordinated debts as stated in note no. 2.01, is in the nature of capital receipt. Therefore the same has been directly taken to the credit of Capital Reserve in the Balance Sheet.

K. Borrowing cost are recognized as an expense in the year in which they are incurred except which are directly attributable to acquisition/construction of qualifying fixed assets (as defined under Accounting Standard 16), till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of the asset.

L. Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. The Company has framed the policy of impairing the asset, when carrying value of the assets exceeds its recoverable amount, under the circumstances when the Company is having the sources of information (whether internal or external) that an impairment loss may have occurred. Accordingly, impairment losses will be charged to profit and loss account in the year in which an asset is identified as impaired. The impairment losses recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

N. 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 outflow of resources. Provisions not made in the account (which otherwise should have been made) are disclosed by way of appropriate note. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

O. Cash Flow Statement prepared under Indirect Method, as prescribed by Accounting Standard 3. Term Deposit with maturity period exceeding 3 months, earmarked bank balances and Deposits kept as margin money/security etc. are not considered as "cash and cash equivalent", in the Cash Flow Statement.

P. Lease rent on cancellable operating lease recognized as Income in the Statement of Profit and Loss.

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Mar 31, 2010

A) 1) The Financial statements are prepared to comply in all material aspects with applicable accounting principles in India, the relevant provisions of Companies Act, 1956 and mandatory Accounting Standards notified by the Companies (Accounting Standard) Rule 2006 (hereinafter referred to as "Accounting Standard" in this Schedule). The financial statements are prepared under the historic cost convention in accordance with the provisions of the Companies Act, 1956 as adopted consistently by the Company.

2) The company has followed the Prudential Norms for Income Recognition as prescribed by Reserve Bank of India for Non-Banking Financial Companies. Lease Equalization is computed as per the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India, since the Company has not entered into any new lease transactions, after the date on which the Accounting Standard 19 became applicable.

3) "Interest" is recognised on the time proportionate method. "Dividend income" is recognised when the unconditional right to receive the income is established.

Interest on Income Tax refund and miscellaneous income are accounted as and when received.

b) The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

c) Investments are held as longterm and are valued at cost. Provision for dimunition in the value of the investments is made wherever the management is of the opinion that such decline is other than temporary.

d) Investments held as other than longterm investments are valued at cost or net realizable value whichever is lower.

e) Stock in trade is valued at cost or net realizable value whichever is lower except for unquoted shares, which are valued at cost or breakup value, whichever is lower.

f) Fixed Assets are shown at cost or revalued amount as the case may be, less Depreciation. The lease hold land shown at revalued amount. The revalued amount has not been amortized to revaluation reserve. The Company has framed the policy of amortizing such value, on termination of lease.

g) Depreciation:

1) In respect of assets acquired prior to 1st October, 1987 depreciation is charged at the rates already arrived at after taking into consideration the effective life of the asset.

2) In respect of assets acquired on or after 1st October, 1987, other than those given on lease, the depreciation is charged under straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956.

3) Depreciation on leased assets is accounted on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. Lease Equalization represents the excess of Principal balance recovery over statutory depreciation.

4) Depreciation on buildings constructed on leasehold lands, is accounted by a method under which the asset is written off over the lease period.

h) Employee Benefit:

The Companys "Retirement Benefit Plan" and "Other Benefit Plans" comprises of Contribution to Provident Fund, Employee State Insurance and Gratuity. Contribution to Provident Fund and Employee State Insurance is being made at pre-determined rates and are charged to the Profit & Loss Account. The Companys liability towards gratuity to employees is covered by group gratuity policy with LIC of India and accordingly the premium paid, charged to the profit & loss account. Deficit of present value of obligations (under Gratuity policy) over the fair

value of Gratuity plan assets, duly charged to the profit and loss account, on year to year basis. Provision for leave encashment made on estimated basis.

There are no other retirement benefits/other benefits are being provided by the Company.

i) Taxes on Income

Tax on Income for the current period is determined on the basis of taxable income computed by the Company. Deferred Tax Liability (Net of Asset) reflects the impact of current year timing differences between the taxable income/losses and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax asset (if any) is being recognized, subject to the consideration of prudence.

j) The principal write back pertaining to deposits, debentures and Subordinated debts as stated in Note No. Il( 5) of this Schedule, is in the nature of capital receipt. Therefore the same has been directly taken to the credit of Capital Reserve in the Balance Sheet.

k) Borrowing cost are recognized as an expense in the year in which they are incurred except which are directly attributable to acquisition/construction of qualifying fixed assets, (as defined under Accounting Standard 16), till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of the asset.

l) Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

m) The Company has framed the policy of imparing the asset, when carrying cost of assets exceeds its recoverable amount. Accordingly an impairment loss will be charged to profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

n) 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 outflow of resources. Provisions not made in the account (which otherwise should have been made) are disclosed by way of appropriate note. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

o) Cash Flow Statement is being prepared under "Indirect Method" as laid down under Accounting Standard 3 of Companies (Accounting Standards) Rules 2006.