Accounting Policies of Minolta Finance Ltd. Company

Mar 31, 2024

19.3 Summary of significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

19.3.1 Income

(i) Interest income

The Company recognizes interest income using Effective Interest Rate (EIR) on all financial assets subsequently
measured at amortized cost. EIR is calculated by considering all costs and incomes attributable to acquisition of a
financial asset or assumption of a financial liability and it represents a rate that exactly discounts estimated future
cash payments/receipts through the expected life of the financial asset/financial liability to the gross carrying
amount of a financial asset or to the amortized cost of a financial liability. The Company recognizes interest
income by applying the EIR to the gross carrying amount of financial assets. Delayed payment interest (penal
interest) levied on customers for delay in repayments/non-payment of contractual cash flows is recognized on
realization.

(ii) Dividend income

Dividend income on equity shares is recognized when the Company’s right to receive the payment is established,
which is generally when shareholders approve the dividend.

19.3.2 Expenditures

(i) Finance costs Borrowing costs on financial liabilities are recognized using the EIR

(ii) Fees and commission expenses Fees and commission expenses which are not directly linked to the sourcing
of financial assets, such as commission/incentive incurred on value added services and products distribution,
recovery charges and fees payable for management of portfolio etc., are recognized in the Statement of Profit and
Loss on an accrual basis.

(iii) Taxes Expenses are recognized net of the Goods and Services Tax/Service Tax, except where credit for the
input tax is not statutorily permitted.

19.3.3 Cash and cash equivalents Cash and cash equivalents include cash on hand, other short term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.

19.3.4 Financial instruments A financial instrument is defined as any contract that gives rise to a financial asset
of one entity and a financial liability or equity instrument of another entity. Trade receivables and payables, loan
receivables, investments in securities and subsidiaries, debt securities and other borrowings, preferential and
equity capital etc. are some examples of financial instruments.

All the financial instruments are recognized on the date when the Company becomes party to the contractual
provisions of the financial instruments. For tradable securities, the Company recognizes the financial instruments
on settlement date.

Financial assets:- Financial assets include cash, or an equity instrument of another entity, or a contractual right
to receive cash or another financial asset from another entity. Few examples of financial assets are loan
receivables, investment in equity and debt instruments, trade receivables and cash and cash equivalents.

Initial measurement

All financial assets are recognized initially at fair value including transaction costs that are attributable to the
acquisition of financial assets except in the case of financial assets recorded at FVTPL where the transaction costs
are charged to profit or loss.

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into these categories:

(a) Debt instruments at amortized cost

(b) Equity instruments at FVTPL

(c) Equity instruments designated at FVOCI

(a) Debt instruments at amortized cost The Company measures its financial assets at amortized cost if both the
following conditions are met:

The asset is held within a business model of collecting contractual cash flows;

Contractual terms of the asset give rise on specified dates to cash flows that are Sole Payments of Principal and
Interest (SPPI) on the principal amount outstanding.

To make the SPPI assessment, the Company applies judgment and considers relevant factors such as the nature of
portfolio and the period for which the interest rate is set.

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. If cash flows after initial recognition are realized
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 financial assets going forward.

The business model of the Company for assets subsequently measured at amortized cost category is to hold and
collect contractual cash flows. However, considering the economic viability of carrying the delinquent portfolios
in the books of the Company, it may sell these portfolios to banks and/or asset reconstruction companies After
initial measurement, such financial assets are subsequently measured at amortized cost on effective interest rate
(EIR).

(b) Equity instruments at FVTPL The Company classifies financial assets which are held for trading under
FVTPL category. Held for trading assets are recorded and measured in the Balance Sheet at fair value. Interest
and dividend incomes are recorded in interest income and dividend income, respectively according to the terms of
the contract, or when the right to receive the same has been established. Gain and losses on changes in fair value
of debt instruments are recognized on net basis through profit or loss.

The Company’s inventory of equity shares have been classified under this category.

(c) Equity investments designated under FVOCI All equity investments in scope of Ind AS 109 ‘Financial
Instruments’ are measured at fair value. The Company has strategic investments in equity for which it has elected
to present subsequent changes in the fair value in other comprehensive income. The classification is made on
initial recognition and is irrevocable.

All fair value changes of the equity instruments, excluding dividends, are recognized in OCI and not available
for reclassification to profit or loss, even on sale of investments. Equity instruments at FVOCI are not subject to
an impairment assessment.

Derecognition of Financial Assets

The Company derecognizes a financial asset (or, where applicable, a part of a financial asset) when:

• The right to receive cash flows from the asset have expired; or

• The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under an assignment arrangement
and the Company has transferred substantially all the risks and rewards of the asset. Once the asset is
derecognized, the Company does not have any continuing involvement in the same.

The Company transfers its financial assets through the partial assignment route and accordingly derecognizes the
transferred portion as it neither has any continuing involvement in the same nor does it retain any control. If the
Company retains the right to service the financial asset for a fee, it recognises either a servicing asset or a
servicing liability for that servicing contract. A service liability in respect of a service is recognized at fair value
if the fee to be received is not expected to compensate the Company adequately for performing the service. If the
fees to be received is expected to be more than adequate compensation for the servicing, a service asset is
recognized for the servicing right at an amount determined on the basis of an allocation of the carrying amount of
the larger financial asset.

• On derecognition of a financial asset in its entirety, the difference between: the carrying amount
(measured at the date of derecognition) and

• the consideration received (including any new asset obtained less any new liability assumed) is
recognized in profit or loss.

Financial liabilities:-

Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another financial
assets to another entity, or a contract that may or will be settled in the entities own equity instruments. Few
examples of financial liabilities are trade payables, debt securities and other borrowings and subordinated debts.
Initial measurement All financial liabilities are recognized initially at fair value and, in the case of borrowings
and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade
payables, other payables, debt securities and other borrowings.

Subsequent measurement

After initial recognition, all financial liabilities are subsequently measured at amortized cost using the EIR .Any
gains or losses arising on derecognition of liabilities are recognized in the Statement of Profit and Loss.

Derecognition

The Company derecognizes a financial liability when the obligation under the liability is discharged, cancelled or
expired.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet only if
there is an enforceable legal right to offset the recognized amounts with an intention to settle on a net basis or to
realize the assets and settle the liabilities simultaneously

19.3.5 Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards
(ICDS) prescribed therein. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date. Current tax relating to items recognized outside profit or loss is
recognized in correlation to the underlying transaction either in OCI or directly in other equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized
for deductible temporary differences to the extent that it is probable that taxable profits will be available against
which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax asset to be utilized.

Unrecognized deferred tax assets, if any, are reassessed at each reporting date and are recognized 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 realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized either in OCI or in other equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.

An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset may
be impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined. If the
carrying value of relevant asset is higher than the recoverable amount, the carrying value is written down
accordingly.

(a) Amount of impairment loss recognized in Profit and Loss A/c on loans (Financial assets) - 2023-24: NIL,
2022-23 : NIL

(b) Amount of reversal of impairment loss recognized in Profit and Loss A/c- 2023-24: NIL, 2022-23: NIL

(c) Amount of impairment loss recognized in Other Comprehensive Income - 2023-24: NIL, 2022-23: NIL

(d) Amount of reversal of impairment loss recognized in Other Comprehensive Income- 2023-24: NIL,
2022-23: NIL

(e) The management recognizes 0.25% of the loan amount may not be recovered and accordingly
impairment loss @0.25% of the loan assets on the reporting date is recognized.

---

Mar 31, 2014

1.1 Basis of Accounting

The financial Statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India. The Company has prepared the financial statements to comply in all material respect with the Accounting Standards notified under the Companies ( Accounting Standard ) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956.

The Company follows Mercantile System of Accounting and recognises its Income & Expenditure on accrual basis.

1.2 Fixed Assets

Fixed Assets are stated at cost of acquisition.

1.3 Depreciation

Depreciation on Fixed Assets are provided on written down value basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.4 Earning Per Share

Basic EPS is calculated by dividing the Net Profit for the year attributable to Equity Shareholders by the weighted number of Equity Shares outstanding during the year.

1.5 Impairment Loss

An impairment loss ,if any, is recognised wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e.the higher of the assets''s net selling price and value in use.

1.6 Provision for Current Tax

Provision for Current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates relevant to the respective ''previous year''.

1.7 Investment

Investments, being long term, have been valued at cost less permanent diminution in value, if any. Diminution in value of investment has been considered as temporary in nature.

1.8 Inventories

Inventories are valued at lower of cost or market price.

1.9 Deffered Tax

Deferred Tax Liabilities is recognised on the basis of timing differences being the difference between taxable income that originate in one period and is capable of reversal in one or more subsequent years. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.10 Use of Estimate

The preparation of Financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which results are known/ materialised.

---

Mar 31, 2013

1.1 Basis of Accounting

The financial Statements of the Company have been prepared in accordance with Generally Accepted Account- ing Principles in India. The Company has prepared the financial statements to comply in all material respect with the Accounting Standards notified under the Companies ( Accounting Standard ) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956.

The Company follows Mercantile System of Accounting and recognises its Income & Expenditure on accrual basis.

1.2 Fixed Assets

Fixed Assets are stated at cost of acquisition.

1.3 Depreciation

Depreciation on Fixed Assets are provided on written down value basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.4 Earnings Per Share

Basic EPS is calculated by dividing the Net Profit for the year attributable to Equity Shareholders by the weighted number of Equity Shares outstanding during the year.

1.5 Provision for Current Tax

Provision for Current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates relevant to the respective ''previous year''.

---

Mar 31, 2009

A) Basis of Accounting :

The financial statements have been prepared under the historical cost convention and in accordance with the normally accepted accounting Standards. The Company follows the accrual system of accounting subject to and in consistent with the prudential norms as per NBFCs (RBI) Directions 1998.

b) Revenue Recognition :

Revenue is recognised when there is reason of certainty of its ultimate realisation/collection.

c) Investments:

Investments being long term in nature are valued at cost subject to provision for permanent diminution in the value of on vestments.

d) Inventories :

Inventories are valued at lower of cost or market price, taken on aggregate basis for each

e) Miscellaneous Expenditure :

Share Issue Expenses are amortised over a period of ten years.

f) Retirement Benefits :

Payment of Gratuity Act is not applicable to the Company as number of employees are less than minimum required for applicability of Gratuity Act.

g) Taxation :

Deferred Tax Assets for current year loss has not been recognised as there is no reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.