Accounting Policies of Moongipa Capital Finance Ltd. Company

Mar 31, 2024

Note No.1

1. Corporate Information:

Moongipa Capital Finance Ltd (MCFL) was established in 1987. The Shares of the company are listed on Bombay Stock Exchange Limited. MCFL is registered with Reserve Bank of India as NonBanking Finance Company vide certificate number 14.01051 dated 10/08/1998. Moongipa Capital Finance Ltd is engaged in trading in shares, making investments in shares and provides consumer loans & micro-finance to its client.

The company has its registered office situated at 18/14 W.E.A PUSA LANE KAROL BAGH NEW DELHI 110005.

The financial statements are approved for issue by the Company’s Board of Directors on03.05.2024.

2. Basis of preparation:

Compliance with Ind AS:

These financial statements have been prepared to comply in all material aspects with the Indian Accounting Standard (Ind AS) notified under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act. Any directions issued by the RBI or other regulators are implemented as and when they become applicable.

Presentation of financial statements

The Balance Sheet, the Statement of Changes in Equity and the Statement of Profit and Loss are presented in the format prescribed under Division III of Schedule III of the Act, as amended from time to time, for Non-Banking Financial Companies (‘NBFCs’) that are required to comply with Ind AS. The Statement of Cash Flows has been presented as per the requirements of Ind AS 7, Statement of Cash flows.

Basis of preparation

The financial statements have been prepared on accrual and going concern basis and the historical cost convention, except for the certain financial instruments which have been measured at fair values at the end of each reporting period as explained in the accounting policies below.

All the amounts included in the financial statements are reported in Thousands of Indian Rupees (‘Rupees”) except per share data and unless stated otherwise. The Company’s functional currency is Indian Rupees.

3. Significant Accounting Policies

This Note provides a list of the significant Accounting Policies adopted by the Company in the preparation of these Financial Statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

Inventories

The company is dealing in to trading of shares and the unsold shares are lying as inventory on the reporting date. The valuation of such inventories (being financial instruments) are outside the scope of Ind AS 2, Inventories and covered under Ind AS 109, Financial Instruments. Hence, the principles of recognising and measuring financial instruments held as inventories are governed by Ind AS 109, its presentation is governed by Ind AS 32 and disclosures about them are in Ind AS 107. The Inventories in shares are carried at fair value on the reporting date.

Statement of Cash Flows:

The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. Cash flows from operating activities are reported using the indirect method, whereby profit / (loss) before 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.

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.

Income taxes

The income tax expense comprises of current and deferred tax. Income tax is recognized in the 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 the related income tax is also recognized accordingly.

Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the yearend date. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Any interest, related to accrued liabilities for potential tax assessment are not included in income tax charge or (credit) but are rather recognized within finance cost.

Deferred tax

Deferred tax is recognised using balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying value in the financial statements. However deferred tax is not recognised if it arises from initial recognition of asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. The unrecognised deferred tax assets / carrying amount of deferred tax assets are reviewed at each reporting date for recoverability and adjusted appropriately.

Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets and deferred tax liabilities are off set against each other and the resultant net amount is presented in the balance sheet, if and only when, the Company currently has a legally enforceable right to set off current income tax assets and liabilities and, when it relates to income tax levied by the same taxation authority and where there is an intention to settle the current income tax balance on net basis.

Property, plant and equipment

Recognition and measurement

Property, plant and equipment including Capital work in progress is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price including non refundable taxes, directly attributable cost in relation of such asset and estimated cost of dismantling/ restoration if any.

The cost of replacing part of the Property, plant and equipment and borrowing costs are capitalised if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced in intervals, the company recognizes such parts as separate component of assets with specific useful lives and provides depreciation over their useful life. 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 entity and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on 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 derecognised.

Assets are depreciated to the residual values on a written down value basis over the estimated useful lives prescribed in Schedule II of Companies Act, 2013 on a pro-rata basis from the date the asset is ready to put to use. The assets’ residual values and useful lives are reviewed at each financial year end or

whenever there are indicators for impairment, and adjusted prospectively. The estimated useful lives of assets are as follows:

Assets	Useful Life (Years)
Computers	3
Furniture & Fixtures	10
Motor Vehicles	8
Office Equipments	5

Revenue

Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contribution from equity participants.

Revenue is recognised only when it is probable the economic benefits associated with the transaction will flow to the entity.

Exclusions from the definition of revenue are:

• Amount collected on behalf of third parties, viz, Goods and Services Tax: These are not economic benefits that will flow to the entity and do not result in equity.

• In agency relationship, amounts collected on behalf of principal.

Entity recognizes revenue on accrual basis, except for dividend which is recognized as and when right to receive payment is established.

Revenue from sale of shares has been recognized at a point in time i.e on the trade date when the shares has been sold out.

Interest income on a financial asset at amortised cost is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate

Earnings per Share:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Provision, Contingent Liabilities and Contingent Assets:

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent Assets/Liabilities Contingent liability is disclosed for:

Possible obligations which will be confirmed only by future events not wholly within the control of company. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized. Such asset is disclosed in notes to account to balance sheet.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, the Company is required to consider:

a) All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.

b) Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

Financial Instruments

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

Financial Assets

Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in to following categories:

• a) at amortized cost; or

• b) at fair value through other comprehensive income; or

• c) at fair value through profit or loss.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

(i) Debt Instrument at Amortised Cost

The category applies to the Company’s trade receivables, other bank balances, security deposits etc.

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows and

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

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.

(ii) Debt instrument at FVTOCI

A ‘debt instrument’ is classified as at FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset’s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income. There are no such items of the company in this category.

(iii) Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization at amortized cost or at FVTOCI, is classified at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

(iv) Equity investments

All equity investments held for trading which are in scope of Ind AS 109 are measured at fair value.

A financial asset (or, where applicable, a part of a financial asset) is primarily derecognized (i.e. removed from the Company’s balance sheet) when:

a) The contractual rights to receive cash flows from the asset have expired, or

b) The Company has transferred its contractual rights to receive cash flows from the financial asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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Mar 31, 2014

1. Basis of accounting and preparation of financial statements

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. The company follows the directions prescribed by the Reserve bank of India for Non Banking Financial Companies.

2. Use of estimates

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

3. Non Performing Assets

Income recognition, assets classification, and provisioning in respect of NPA have been done in accordance with RBI directives.

4. Cash and cash equivalents

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.

5. Cash flow statement

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.

6. Depreciation and amortisation

Depreciation has been provided on the written down value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 and are on pro-rata basis with respect to the date of addition/ installation/its put to use

7. Revenue recognition

(a) Income is accounted on accrual basis except for dividend income which is accounted on receipt basis.

(b) Further Interest income on NPA accounts are accounted for on realization basis as per RBI Guideline.

8. Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance

9. Investments

Long-term investments are carried individually at cost. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties. Any permanent diminution in the value in recognized in accounts.

10. Employee benefits

(a) The company has only few employees and the provision for gratuity has been made on estimated basis as per the payment of Gratuity Act 1971 but not on actuarial basis.

11. Segment reporting

The company is involved in the business of financing activity only as such there is only one reportable segment. Further the company is operating in India only. Therefore, the reporting requirements as prescribed under AS-17 are not applicable.

12. Taxes on income

Current tax is determined with respect to the income calculated in accordance with the provisions of the Income Tax Act, 1961 Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

13. Deferred Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

14. Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use.

15. Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

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Mar 31, 2013

1. Basis of accounting and preparation of financial statements

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. The company follows the directions prescribed by the Reserve bank of India for Non Banking Financial Companies.

2. Use of estimates

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

3. Non Performing Assets

Income recognition, assets classification, and provisioning in respect of NPA have been done in accordance with RBI directives.

4. Cash and cash equivalents

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.

5. Cash flow statement

Cash flows are reported using the indirect method, whereby proW(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.

6. Depreciation and amortisation

Depreciation has been provided on the written down value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 and are on pro-rata basis with respect to the date of addition/installation/its put to use

7. Revenue recognition

(a) Income is accounted on accrual basis except for dividend income which is accounted on receipt basis.

(b) Further, inlereslincomeonNPAaccounts are accountedfor on realization basis as per RBI guidelines.

8. Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

9. Investments

Long-term investments are carried individually at cost. Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties. Any permanent diminution in the value in recognized in accounts.

10. Employee benefits

(a) Leave Encashment benefit are charged to Profit and Loss Afc on each year on the basis of actual payment made to employee. There are no rules for carried forward of leaves.

(b) The company has only few employees and the provision for gratuity has been made on estimated basis as per the payment of Gratuity Act 1971 but not on actuarial basis.

11. Segment reporting

The company is involved in the business of financing activity only as such there is only one reportable segment. Further the company is operating in India only. Therefore, the reporting requirements as prescribed under AS-17 are not applicable.

12. Taxes on Income

Current tax is determined with respect to the income calculated in accordance with the provisions of the Income Tax Act, 1961 .Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

13. Deferred Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and cany forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their readability.

14. Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, If the carrying amount of these assets exceeds their recoverable amount The recoverable amount is the greater of the net selling price and their value in use.

15. Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

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Mar 31, 2012

1. The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and they comply the relevant provisions of the Companies Act, 1956 and the Accounting Standards verified under the Companies Act 1956. The Company follows the directions prescribed by the Reserve bank of India for Non Banking Financial Companies.

2. INCOME RECOGNITION

Revenue its being recognized in accordance with the generally accepted ac- counting principles in India on accrual basis. Accordingly, wherever there are uncertainties in the realization of income, the same is not accounted for till such time the uncertainty is resolved. Subject to the above, specific incomes have been accounted for as under

(i) Lease rental are accounted for on accrual basis

(ii) Interest on loans & advances and income from service charges are ac- counted for on accrual basis except on NPA accounts where income has been realized on realization basis as per RBI guidelines,

(iii) Dividends are accounted for as and when received.

3. FIXED ASSETS & DEPRECIATION

(i) Leased out assets are stated at cost less depreciation. Depreciation on plant & machinery is provided as per straight line method and on other leased assets as per written down value method at the rates and In the manner specified in schedule XVI of the Companies Act, 1956.

(ii) Assets other than leased out assets are also stated at cost less depreciation. Depreciation on these assets has been calculated in the same manner as stated above for leased out assets.

(iii) The leased assets whose lease period expired during the year have been written off.

4. INVESTMENTS

Investments are stated at cost. Profit /Loss on sale of long term investments is provided at the time of Sale / transfer of Investments. Any diminution in the value other than temporary Is recognized in the accounts.

5. NON PERFORMING ASSETS

Income recognition, assets classification, and provisioning in respect of non- performing assets have been done in accordance of RBI directives.

6. RETIREMENT BENEFIT

a) Leave encashment benefit are charged to Profit & Loss Account on each year on the basis of actual payment made to employee. There are no rules for carried forward leave.

b) The Company has only few employees and the provision for gratuity has been made on the estimated basis as per the payment of Gratuity Act, 1971 but not on actuarial valuation.

7. ACCOUNTING FOR TAXES ON INCOME

1. Tax expenses comprise Income Tax & Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the Tax authorities in accordance with the provisions of Income Tax Act 1961.

2. The Deferred Tax resulting from timing difference between book and tax- able profit is accounted for using tax rates and tax law that have been enacted or subsequently enacted as at the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent there is reasonable certainty that the asset will be realized in the future.

8. IMPAIRMENT OF ASSETS

The carrying amount of assets is reviewed at each balance sheet date to ascertain Impairment based on internal/ external factors. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the assets' net selling price and value in use.

9. CONTINGENT LIABILITIES

Contingent Liabilities are not provided and are disclosed in notes to the ac- counts

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Mar 31, 2010

1. The financial statements ate prepared and presented under the historical cost convention on the accrual basis of accounting and they comply with the relevant provisions of the Companies Act, 1956 and the Accounting Standards Issued by the Institute of chartered Accountants of India (ICAI), as applicable. The Company follows the directions prescribed by the Reserve bank of India for Non Banking Financial Companies.

2. INCOME RECOGNITION

Revenue is being recognized in accordance with the generally accepted accounting principles in India on accrual basis. Accordingly, wherever there are uncertainties in the realization of income, the same Is not accounted for till such time the uncertainty is resolved. Subject to the above, specific incomes have been accounted for as under

(I) Lease rental are accounted for on accrual basis

(II) Interest on loans & advances and income from service charges are accounted for on accrual basis except on NPA accounts where Income has been realized on realization basis as per RBI guidelines..

(III) Dividends are accounted for as and when received.

3. FIXED ASSETS & DEPRECIATION

(I) Leased out assets are stated at cost less depredation. Depredation on plant & machinery is provided as per straight line method and on other leased assets as per written down value method at the rates and in the manner specified in schedule XIV of the Companies Act, 1956.

(I) Assets other than leased out assets are also stated at cost lest depre- dation. Depreciation on these assets has been calculated in the same manner as stated above for leased out assets.

(iii) The leased assets whose lease period expired during the year have been written off.

4. INVESTMENTS

Investments are stated at cost. Prom /Loss on sale of long term Investments Is provided at the time of Sale / transfer of Investments. Any diminution In the value other than temporary Is recognized in the accounts.

5. NON PERFORMING ASSETS

Income recognition, assets classification, and provisioning In respect of non- performing assets have been done In accordance of RBI directives.

6. RETIREMENT BENEFIT

No provision has been made for the retirement benefits payable to the employees skies no employee has yet put in the qualifying period of services. The same will be provided when it becomes due.

7. ACCOUNTING FOR TAXES ON INCOME

1) Tax expenses comprise Income Tax, Defamed Tax & Fringe Benefit Tax. Current Income Tax and Fringe Benefit Tax is measured at the amount expected to be paid to the Tax authorities in accordance with the provisions of Income Tax Act 1961.

2) The Deferred Tax resulting from timing difference between book and taxable profit is accounted for using tax rates and tax law that have been enacted or substantially enacted as at the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent there is reasonable certainty that the asset will be realized in the future.

8. IMPAIRMENT OF ASSETS

The carrying amount of assets is reviewed at each balance sheet date to ascertain Impairment based on Internal/ external factors. An impairment loss Is recognized when the carrying amount of an asset exceeds Its recoverable amount The recoverable amount is greater of the assets net selling price and value in use.

9. CONTINGENT LIABILITIES

Contingent Liabilities are not provided and are disclosed in notes to the accounts

10. HYPOTHECATED STOCK

Hypothecated stock has been stated at the total amount of Installments recoverable as reduced by the interest element pertaining to the following financial year

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Mar 31, 2003

A) INCOME RECOGNITION

Revenue is being recognised in accordance with the guidance note on accrual basis of accounting issued by The institute of Chartered Accountants of India. Accordingly, wherever there are uncertainties in the realisation of income, the same is not accounted for till such time the uncertainty is resolved. Subject to the above, specific incomes have been accounted for as under:

(i) Lease rentals are accounted for on accrual basis. Please refer to Note No. 2 here under.

(ii) Interest on loans & advances and income from service charges are accounted for on accrual basis.

(iii) Dividends are accounted as and when received.

B) FIXED ASSETS & DEPRECIATION

(i) Leased out assets are stated at cost less depreciation. Depreciation on computers and plant & machinery is provided as per straight line method and on other leased assets as per written down value method at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Assets other than leased out assets are also stated at cost less depreciation. Depreciation on these assets has been calculated in the same manner as stated above for leased out assets.

(iii) No depreciation has been charged during the year on the leased assets purchased on or before 31.03.1998 as the lease period of such assets has been expired and these are pending transfer to the lessee.

(iv) The leased assets whose lease period expired during the year have been written off at the close of the financial year.

C) INVESTMENTS

Investments are stated at cost. Profit /Loss on long term investments is provided at the time of Sale / transfer of Investments.

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Mar 31, 2002

A) INCOME RECOGNITION

Revenue is being recognised in accordance with the guidance note on accrual basis of accounting issued by The Institute of Chartered Accountants of India.Accordingly,wherever there are uncertainties in the realisation of income,the same is not accounted for till such time the uncertainty is resolved. Subject to the above, specific incomes have been accounted for as under:

(i) Lease rentals are accounted for on accrual basis. Please refer to Note No. 2 here under.

(ii) Interest on loans & advances and income from service charges are accounted for on accrual basis.

(iii) Dividends are accounted as and when received.

B) FIXED ASSETS & DEPRECIATION

(i) Leased out assets are stated at cost less depreciation. Depreciation on computers and plant & machinery is provided as per straight line method and on other leased assets as per written down value method at the rates specified in schedule XIV of the Companies Act, 1956.

(ii) Assets other than leased out assets are also stated at cost less depreciation. Depreciation on these assets has been calculated in the same manner as stated above for leased out assets.

(iii) No depreciation has been charged during the year on the leased assets purchased on or before 31.03.1998 as the lease period of such assets has been expired and these are pending transfer to the lessees.

(iv) The leased assets whose lease period expired during the year have been written off at the close of the financial year.

C) INVESTMENTS

Investments are stated at cost. Profit /Loss on long term investments is provided at the time of Saletransfer or Investments.