Notes to Accounts of Nicco Uco Alliance Credit Ltd.

Mar 31, 2025

(xiii) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized
when there is a present obligation as a result of past events and it is probable that there
will be an outflow of resources Contingent liabilities are not provided for but disclosed by
way of note in the financial statements.

Contingent assets are neither recognized nor disclosed in the financial statements.

Accounting policies not specifically referred to above are consistent and are in accordance
with generally accepted accounting principles read with Accounting Standards mentioned
under Section 133 of Companies Act, 2013 and in its absence by Indian Accounting
Standard. .

a) The inventory has turned NPA hence the same is treated as Non-Current Asset.

b) Other Assets including some bank balances which are disputed / inaccessible have been treated as non-current.

c) Police has submitted a charge-sheet with the criminal court against fraud perputuated by two employees in 2008-09 involving an
amount of Rs. 140.62 lakhs. However full provisions has been made against the amount.

d) Positive balance lying in the current accounts with the members of the consortium bank, i.e. Rs.162.11 Lacs (P.Y. Rs.162.11
Lacs) in UCO Bank, Rs.0.19 Lacs (P.Y. Rs.0.19 Lacs) in Bank of Baroda, Rs.3.01 Lacs (P.Y. Rs.3.01 Lacs) in Canara Bank,
Rs.0.10 Lacs (P.Y. Rs.0.10 Lacs) in Central Bank of India, Rs.0.01 Lacs (P.Y. Rs.0.01 Lacs) in United Bank of India, Rs.42.53 Lacs
(P.Y. Rs.42.53 Lacs) in Indian Overseas Bank, Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in State Bank of Mysore, Rs.0.20 Lacs (P.Y.
Rs.0.20 Lacs) in State Bank of Travancore amounting in total Rs 208.20 Lacs (P.Y. Rs 208.20 Lacs) remain unconfirmed.

e) Balance of Rs.2.20 Lacs (P.Y Rs 2.20 Lacs) from other Banks also remain unconfirmed.

f) Fixed deposit made by the company with the members of the consortium bank,i.e.Rs.13.46 Lacs (P.Y Rs.13,46 Lacs) with Bank
of Baroda, Rs.0.05 Lacs (P.Y, Rs.O 05 Lacs) in Indian Overseas Bank and with other bank amounting to Rs.0.25 Lac (P.Y. Rs.0.25
Lacs)amounting in total Rs 13.76 Lacs(P Y Rs 13.76 Lacs) remain unconfirmed and accordingly was provided for.

g) The investigation for the fraud committed by two employees in the F.Y. 2008-09 has been completed and charge sheet has been
submitted in the court by Kolkata Police.

as a^SL^Sc^he^rsh^Seet date⁸⁰" ^f°^r ^ ^ °^Pt''^0nS ^ ^C°^{ntraCtS/ Commitments} for the sale of shares/disinvestment

f) No securities convertible into equity/preference shares has been issued by the company during the year.

g) No calls are unpaid by any Director and Officer of the Company during the year,

^b“" ^b“^{9l,t ba}°^{k b>} ''^he “^mpanv dUrin9 ''^{he peri}°^d 5 >ears precedlnf *^{te d}® “

^{include 9}''⁶⁰''⁰⁰⁰ ^^shares °''^{Rs 10}''-^each—<«“"• >°

j i) 4,00,000 Equity Share of Rs.10/- each allotted pursuant to amalgamation of Nicco Investments Ltd.

Hon’bfe CsSfS ^ ^d“ “ ^ ^Sd™ °'' ™^{SSr 8}»^r”^ed

j in) 1 38,66 687 Equity Shares of Rs.10/- each issued to the share holders of Alliance Credit & Investments Limited as _Der schPm_P
of amalgamation approved by Hon''ble Calcutta High Court on 21st April, 1999 ^{P scheme}

j iv) 1 05,00 000 Equity Shares of Rs. 10/- each issued to the shareholders of Overseas Sanmar Financial Limited as Der scheme
01 amalgamation approved by Hon''ble Calcutta High Court on 20th Ap,11,2000 and Hon''ble Chennai High Court » 10,h May"™

ihl ,™!r?n^{n tr0nsferebilit}v of shares - Shares are transferable with the approval of directors. Board may refuse to recoonise

the transfer of shares in any case in which the company has a lien upon ®

““mem Safe) uTst" ^ ^898,65 deSir6d b6 ''''“^{S,6rred d}"^d8id'' ^B“''^d also decline to recognise

IwSrtSSitSf «relates and such other evidence as th^«%asonab,y reguired to

b) The instrument of transfer is in repect of one class of shares only.

c) The disclosure requirements of share capital are to be added by shareholding of promoter as below ^

i) UCO Bank, the leader of the consortium of bankers, moved an application in the Debt Recovery Tribunal on 29.11 .,2005 to
recover the outstanding dues amounting to Rs. 117.23 crores (P.Y. Rs.119.23 crores) pending against the company which the
company has contested. The learned D.R.T has passed an order on 01.12.2005 that till disposal of the prayer for interim relief, the
company will not deal with or transfer or dispose off any of it''s secured properties. However, the company shall carry on it''s business
as usual. However negotiation is under process for out of court settlement at a much lower amount.

iia) Nature of Security: The company executed a joint deed of hypothecation in favour of consortium of bankers headed by UCO
bank whereby the company hypothecated as and by way of first charge on its entire tangible properties and on assets both present
and future including plant and machinery and /or other assets purchased and / or acquired for its hire purchase/leasing
business/operations and all relative lease rentals, hire charges receivables, both present and future.

The company further created equitable mortgage in favour of the applicant banks in respect of the properties by way of deposit of
original title deeds on 20th June, 2001:

a) Office Space at Nicco House, 2nd Floor, 2 Hare Street, Kolkata-700 001;

b) Flat at 718, Dalmal Towers, Nariman Point, Mumbai - 400 021;

c) Flat no. 3 at 9, South North Road, Juhu Ville Parle Development Scheme, Mumbai-400 049;

d) Premises at 93/4, Karaya Road, 4th Floor Kolkata - 700 019;

e) 0.65 acre, 2.92 acres,1.70 acres, 0.95 acre, 0.85 acre & 5.90 acres of land at Poolavadi,Coimbatore,Tamil Nadu;

f) 79 karnal, 18 marlas of land (approx. 10 acres) in khewat nos. 16,37,38,61 & 79, khatoni nos. 21 min, 143min, 44 min, 83 min,
108min respectively at Village-Salhawas, Tehsil-Rewari, District-Rewari, Haryana.

iii) All loans have turned Non-Performing Assets in the books of the lenders and the same have been recalled by them and at
present being contested in Debt Recovery Tribunals. Hence, the clause relating to disclosure of terms of repayment of loans in such
cases has become inapplicable.

iv) Refer Note 17A for explanatory disclosure ,

v) The details of default given below showing dates and amount (Principal and Interest) referring note no. 18 is as furnished by the
management.

ia) Rupee Loans from Banks & Financial Institution consist of loans from: UCO Bank (Mehta Transport), UTI Bank (Axis Bank), IFCI

ib) Nature of Security: For UCO Bank (Mehta Transport) - By an agreement for hypothecation of movable plant and machinery to
secure a term loan by the company on November 17, 2000, the company hypothecated the following vehicles as security for the
repayment of the said term loan facility availed of by it from the applicant bank being the 50 number of Ashok Leyland Tusker Turbo
tractors along with new chasis lent under Hire Purchase to M/s Mehta Transport Services (I) Ltd.

Further the company hypothecated to and charged in favour of the applicant bank as and by way of first charge thereon:

(i) all the goods described in general terms in the schedule written there under being 50 numbers of Trailers to be purchased under
the term loan and is to be lent under hire purchase agreement.

(ii) all the company''s present and future book debts, outstanding monies, receivables, claims, bills, contracts etc.

ic) Nature of Security: For UTI Bank (Axis Bank): The facility is secured against assignment of receivable of the selected pool
together with the entire interest, ownership and clear title and rights to the assets provided in the hire purchase agreements and also
against cash collateral.

id) Nature of Security: For IFCI - The company hypothecated on 29th April, 1999 in favour of the lender by virtue of which the whole
of the specific Industrial Assets, equipments, plant, machinery and other assets together with its spares, tools and other accessories
acquired / to be acquired, were more particularly described below to the application were hypothecated in favour of the applicant as
security for the term loan.

Particulars of the equipments, plant, machinery, and other assets acquired by the company out of loan:

1. TIL make Cranes

2. particles board plant.

All the movable properties and immovable properties of the company wherever lying and wherever situated.

ie) Foreign Currency Loan consists of IFC-Washinqton

if) Nature of Security - For IFC Washington: The company hypothecated and charged as and by way of first fixed and exclusive
charge and lien to and / or in favour of the trustee in for the benefit of the corporation, certain properties and assets given on lease or
hire purchase or acquired by the company out of finances.

iia) All loans have turned Non-Performing Assets in the books of the lenders and the same have been recalled by them and at
present being contested in Debt Recovery Tribunals and High Court at Calcutta. Hence, the clause relating to disclosure of terms of
repayment of loans in such cases has become inapplicable.

iib) Banks and financial institutions have stopped giving confirmation of the balances and statements of accounts.

iii) The details of default given below showing dates and amount (Principal and Interest) referring note no. 2.3vii is as furnished by

the management. 3 '' T'' ;

si V/ \

iva) UCO Bank has filed application in DRT - I to recover Rs.327 Lacs (P.Y. Rs.327 Lacs) on account of term loan, matter is
pending.

ivb ) IFCI has filed an application in DRT -1 to recover Rs.62.91 Lacs (P.Y. Rs.62.91 Lacs), matter is pending.

ivc) Indusind Bank has filed an application in DRT, Chennai to recover Rs.164.46 Lacs (P.Y. Rs.164.46 Lacs) on account of
Securitisation loan which is being contested (This relates to Note 2.5 short term borrowing).

ivd) Axis Bank has filed an application in DRT, Chennai to recover Rs.1368 Lacs (P.Y. Rs.1368 Lacs) which is also being contested.

International Finance Corporation Washington initiated a suit in the Hon''ble High Court at Calcutta for recovery of a sum of US$
26,82,877.73 (P.Y. US$ 26,82,877.73) with further interest against the company. The case is being contested.

UCO Bank has taken measures under section 13(4) of the SARFAESI Act against the company. The company filed an application
under section 17(1) of the said Act.

In the Sarfaesi proceedings against the company by UCO Bank, being aggrieved by DRAT''s Order, company filed a Writ Petition
before Hon''ble High Court, Calcutta and due to some deficiency in the procedure followed by UCO Bank and Others., High Court
Ordered that no coercive steps should be taken by Bank. Bank has appealed against this order. .

v) The entire secured loan accounts of the company except interest accrued and due have become NPA in the books of the lenders.
The banks/financial institution have stopped giving statements & confirmations. Although interest on these accounts have been
provided in the books as per agreed rates, the said accounts remain unconfirmed. No confirmation has been received in respect of
current accounts from most of the banks.

A few cases have been initiated by Serious Fraud Investigation Office against the company relating to Accounting, Securitisation
deals and default in repayment of fixed deposits etc. which are pending before the Chief Metropolitan Magistartes'' Court. However, it
may be noted that the entire fixed deposit liabilities had been settled as per a scheme approved by Hon’ble High Court, Calcutta.

27.1) RBi has cancelled the Certificate of Registration of the Company to carry out Non-Banking Financial activities of the Company vide it''s order dated 31st March,

2005 against which Company has preferred an appeal before appellate authority for NBFC, Joint Secretary, Ministry of Finance, Govt of India, New Delhi which is
also pending. In view of the above, the accounts of the company has been prepared on going concern concept based on the legal opinion obtained.

27 2) The Company has complied with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for income recognition, accounting standards,
provisions/ write-downs of bad and doubtful debts unless mentioned otherwise except for maintaining excess provision against Non Performing Assels-(NPA) to
cover any future eventualities.

27.3a) In view of on going negotiations with consortiuns of bankers and IFC(W) for one time settlement of their respective dues (inclusive of accumulated interest) at a
much lower amount,it has been decided by the Board of Directors to keep in abeyance charging of interest on dues to such institutions with effect from
01.04 2015 resulting in cumulative deductions of loss of Rs 2044 Cr inclusive of Rs 390 Cr. for current period however inters! dues to two banks I e Axis Bank
Indusmd Bank(portion of loan outside consortium of Banks) and IFCI has been duly charged as they are outside the preview of such negotiations.

27.3b) Reconciliation of Income Tax liability between books records and Departmental records is pending for determination of liability / adjustment if any incidental /
contingent / excess calling for write back in this regards

27.3c) Pursuant to the above, the statement showing default in repayment of borrowing together with interest thereon does not take into account the accumulated
interest pertaining to the institutions coming under consortium management and IFCW from 2015-16 onwards.

27 3d) Conformation of balances from the parties are pending for adjustment.

28) Contingent Liabilities, Contingent Assets & Commitment to the extent not provided for.

The company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term
investments that are in line with the obligations under the employee benefit plans. Within this frameowrk, the company''s ALM objective is to match assets to the
pension obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate
currency

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee
benefit obligations The company has not changed the processes used to manage its risks from previous periods The company uses derivatives to manage some
of its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets
33) Related Party Disclosures

33 1) Related parties with whom transactions have taken place during the year and previous year are:

Related party disclosures as required under Accounting Standard (AS) - 18 on ‘related party disclosures'' issued by the Institute of Chartered Accountants of India
are given below

38 2) During the year ended March 31, 2025 and March 31, 2024, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into
'' '' and out of Level 3 fair value measurements.

38.3) Explanation to the fair value hierarchy

38.3.1) The Company measures financial instruments, such as, quoted investments at fair value at each reporting date. 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 All assets and liabilities for which fair
value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:

Level 1 Level 1 hierarchy includes financial instruments measured using quoted prices This includes listed equity instruments, traded bonds and ......

mutual funds that have quoted price The fair value of all equity instruments {including bonds) which are traded in the stock exchanges is
valued using the closing price as at the reporting period The mutual funds are valued using the closing NAV
Level 2 The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is /,",

determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific i _:ri

estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2 ) | iT''•.]

Level 3 If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3 This is the case for \ ¦>..

unlisted equity securities, contingent consideration included in level 3

39.) Financial Risk Management

Financial management of the Company has been receiving attention of the top management of the Company The management considers finance as the lifeline of-
the business and therefore, financial management is carried out meticulously on the basis of detailed management information systems and reports at periodical
intervals extending from daily reports to long-term plans Importance is laid on liquidity and working capital management with a view to reduce over-dependence on
borrowings and reduction in interest cost. Various kinds of financial risks and their mitigation plans are as follows

40) Credit Risk

40.1) The credit risk is the risk of financial loss arising from counter party failing to discharge an obligation. The credit risk is controlled by analysing credit limits and credit
worthiness of customers on continuous basis to whom the credit has been granted,obtaining necessary approvals for credit and taking security deposits from trade
channels

Existing practice is to create allowances for doubtful debts on the basis of outstanding non-government dues for above three years subject to due recognition of
ongoing negotiation for realisation of dues in this regard without creation of provision in respect of parties reflexing on silverline towards recoverability of old
dues.Govenment dues are generally considered recoverable,
a Trade receivables

c The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements (if any). The interest payments on variable interest
rate loans in the tables above reflect market forward interest rates at the respective reporting dates and these amounts may change as market interest rales change The future cash
flows on derivative instruments may be different from the amount in the above tables as exchange rates change Except for these financial liabilities, it is not expected that cash flows
included in the maturity analysis could occur significantly earlier, or at significantly different amounts When the amount payable is not fixed, the amount disclosed has been determined
with reference to conditions existing at the reporting date

40 3) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices Market risk comprises three type of
risks Foreign Exchange Risk. Interest Rate Risk and Other Price Risk

40 3 1) Foreign Exchange Risk

Foreign Exchange Risk is the exposure of the Company to the potential impact of movements in foreign exchange rates The Company imports various raw materials viz
chemicals, drugs, API, packing materials viz granules, items of stores and spares and capital goods as per its requirements from time to time and also borrows funds in foreign
currencies This results in foreign currency risk to the Company Similarly, company''s exports are also exposed to foreign currency risks

For the Foreign Exchange exposures risk management, the Company''s Policy is to adopt a flexible approach in hedging its risk For this, the Company from time to time takes
the view from banks and foreign exchange experts and based upon the same and also considering macro-economic factors, forms a view and whenever deemed necessary,
hedges its foreign exchange risk. The hedging strategies are taken after careful study/ analysis of foreign exchange market to minimize to the extent possible, any effect of the
fluctuation m foreign exchange rates

40 3 3 Other Price Risk

The Company is exposed to equity price risk, in a meagre way with least possiblity of any adverse impact on account of equity or debt instruments in profitability

40.3.4 Reserve Bank of India vide Notification No DNBS. 167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append to its balance sheet prescribed under
the Companies Act 2013, the particulars in the format as set out in the schedule annexed, which has been complied with

40 3.5 The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement

40.3.6 Land & Building (in excess of its own use) & shares (unquoted shares other than of subsidiary companies or company in the same group) held by the company in contravention

of Para 19 of Non Banking Financial ( Deposit accepting or holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007 in regards to Restriction on investment in
land and building and unquoted shares.However since as per DRT court''s order dated 01.12.2005 company cannot sell, alineate or dispose of any of its assets, the company is
unable to take steps to remedy the situation

The accompanying notes are an integral part of the Financial Statements. . * fz?

Mr Uditendu Sarkar (DIN : 10509121) Chairman t_J ciLv''VbhTl^MA.

ForBASUCH^NCH/IP ''Vn ^Mr- Kaustubha Basu (DIN: 10185801) Managing Doctor

CHARTERED ACCOUNTANTS \|

R. NO.-304G49E Mr. Prabir Kumar Nag (DIN :07178929) Director

Ms. Anita Lahiri (DIN: 10520216) Director^^ / Ck

i''laco: KHkata ¦ SWAWATHCffATTOPnDh-i/-, ¦ Mr. S. S Majumder Company Secretary I _T _ --7"-^-

Date: 8th May, 2025 p ^ *

‘ Mr. Mahadev Chatterjee (Pan no. AJUPC4629A) Chief Financial Officer

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Mar 31, 2014

NOTE 1.1 : OTHER ASSETS

a) The inventory has turned NPA hence the same is treated as Non-Current Asset.

b) Other Assets including some bank balances which are disputed / inaccessible have been treated as non-current.

c) Police has submitted a charge-sheet with the criminal court against fraud perputuated by two employees in 2008-09 involving an amount of Rs. 140.62 lakhs. However full provisions has been made against the amount.

d) On recommendation from Registrar of Companies, Kolkata, Ministry of Corporate Affairs, Government of India directed Serious Fraud Investigation Office (SFIO) to carry out investigation against the company under section 235 of the Companies Act, 1956 which has been partially completed and follow up action in respect of them has been initiated.

e) Positive balance lying in the current accounts with the members of the consortium bank, i.e. Rs.162.11 Lacs (P.Y. Rs.162.11 Lacs) in UCO Bank, Rs.0.19 Lacs (P.Y. Rs.0.19 Lacs) in Bank of Baroda, Rs.3.01 Lacs (P.Y. Rs.3.01 Lacs) in Canara Bank, Rs.0.10 Lacs (P.Y. Rs.0.10 Lacs) in Central Bank of India, Rs.0.01 Lacs (P.Y. Rs.0.01 Lacs) in United Bank of India, Rs.42.53 Lacs (P.Y. Rs.42.53 Lacs) in Indian Overseas Bank, Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in State Bank of Mysore, Rs.0.20 Lacs (P.Y. Rs.0.20 Lacs) in State Bank of Travancore amounting in total Rs 208.20 Lacs (P.Y. Rs 208.20 Lacs) remain unconfirmed and inaccessible for the reasons stated in Note 2.3.ix.

f) Balance of Rs.2.20 Lacs (P.Y Rs 2.20 Lacs) from other Banks also remain unconfirmed.

g) Fixed deposit made by the company with the members of the consortium bank, i.e. Rs.13.46 Lacs (P.Y. Rs.13.46 Lacs) with Bank of Baroda, Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in Indian Overseas Bank and with other bank amounting to Rs.0.25 Lacs (P.Y. Rs.0.25 Lacs) amounting in total Rs 13.76 Lacs (P.Y. Rs 13.76 Lacs) remain unconfirmed and accordingly was provided for.

h) Other receivable forming part of other current assets represents dues from Managing Director (Rs. 7.23 Lakhs).

i) Adequate provisions is lying in the books against all doubtful assets.

2.1 : FINANCE COST

a) Subsequent to cessation of SWAP agreement with UCO Bank, foreign currency loan has been valued at the rate prevailing as at close of 31.03.2014 and exchange difference arising from foreign currency borrowing to the extent that they are regarded as an adjustment to interest cost shown above.

2.2 RBI has cancelled the Certificate of Registration of the Company to carry out Non-Banking Financial activities of the Company vide it''s order dated 31st March, 2005 against which Company has preferred an appeal before appellate authority for NBFC, Joint Secretary, Ministry of Finance, Govt. of India, New Delhi which is also pending. In view of the above, the accounts of the company has been prepared on going concern concept based on the legal opinion obtained.

2.3 The Company has complied with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for income recognition, accounting standards, provisions/ write-downs of bad and doubtful debts unless mentioned otherwise except for maintaining excess provision against Non Performing Assets (NPA) to cover any future eventualities.

2.4 Disclosure regarding Contingent Liabilities :

a) Claims/Disputed liabilities not acknowledged as debt

The Company has received the following demands which are disputed by the Company and are not provided for:

Nature of Contingent Status of the As at As at liability case 31st March 31st March 2014 2013 (Rs. in lacs) (Rs. in lacs)

Contingent liability The disputed w.r.t Central demand is pending and State Sales Tax before W.B.Comm (A.Y. 1995-1996 ercial Taxes to 2004-2005) Appellate & Revisional Board. 27.50 27.50

Total 27.50 27.50

b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year Rs.26.53 lacs) was issued in favour of Assistant Commissioner of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Karnakata Appellate Tribunal for Commercial Tax at Bangalore.

c) UTKAL Auto has filed a claim against the company before Arbitrator at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs. 76.90 Lacs) against which the company filed a counter claim of Rs.482.74 lacs against UTKAL Auto before the Arbitrator. An award was passed on 31st December, 2011 and the claim is partly accepted amounting to Rs.2.78 lacs with interest at the rate 12% from 1st September, 2006 and the counter claim was rejected. An appeal has been filed in the Hon''ble High Cort of Calcutta against the said order which was admitted on 15th May, 2012 by the Hon''ble High Court.

2.5 No exercise of impairment was undertaken as authorised under para vi of AS 28.

2.6 Segement Reporting as per Accounting Standard - 17 prescribed under the Act.

The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting" issued by The Companies (Accounting Standards) Rules, 2006.

2.7 Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

2.8 Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits net deferred tax asset arising as at 31.03.2014 has not been recognized in the books of accounts.

2.9 Related Party disclosures

Related party disclosures as required under Accounting Standard (AS) - 18 on ''related party disclosures'' issued by the Institute of Chartered Accountants of India are given below :

Nature of Relationship Name of the Party

1. Subsidiary Company Nicco Insurance Agents & Consultants Ltd.

2. Associates Alliance Management & Fiscal Services Ltd.

3. Key Management personnel L. N. Kaul - Managing Director J. Mukherjee - Chief Financial Officer S. S. Majumdar - Company Secretary

2.10 Other receivable Rs. 7.23 Lacs - Key Management Personnel.

F. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

G. Super Annuation Fund - The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2014 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on date.Upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to the super annuation fund amounting to Rs.1.36 Lacs (P.Y. Rs.1.30 Lacs) was made as per the service rules of the company for the eligible employees and was debited to ''Expenses on Employees''.

H. In respect of Provident funds for eligible employees maintained by a trust, in the nature of defined benefit plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However contribution to those provident funds amounting to Rs.0.95 Lacs during the year (P.Y. Rs. 0.98 Lacs) is recognised as expenses and included in ''Employee Benefit Expenses''. Shortfall of Rs. 0.03 (P.Y. Rs. 0.25 ) in contribution to such provident funds has been provided to the extent of the information available with the company.

2.11 Reserve Bank of India vide Notification No. DNBS.167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append to its balance sheet prescribed under the Companies Act 1956, the particulars in the format as set out in the schedule annexed, which has been complied with.

2.12 A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and insurance claims was received in earlier years in full and final settlement to the satisfaction of the company which was utilised for repair, renovation and rehabilitation work in the office premises.

2.13 The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement.

2.14 Land & Building (in excess of its own use) & shares (unquoted shares other than of subsidiary companies or company in the same group) amounting to Rs. 292.85 lacs & 6.80 lacs respectively held by the company in contravention of Para 19 of Non Banking Financial ( Deposit accepting or holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007 in regards to Restriction on investment in land and building and unquoted shares.

However most of such assets are charged with Bank and Financial Institutions and cannot be liquidated to bring the same within limits of prudential norms as mentioned above.

2.15 A writ petition has been filed by the company before Hon''ble Calcutta High Court against the decision of the MINISTRY OF CORPORATE AFFAIRS inrespect of extension of period of appointment of Mr. L. N. Kaul, Managing Director. Pending further development, as a matter of abundant precaution, the amount paid to him between 15.04.13 and 31.03.14 against his emoluments has been shown under other receivables.

2.16 The previous year figures have been regrouped / restated wherever considered necessary.

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Mar 31, 2013

1.1 Disclosure regarding Contingent Liabilities:

a) Claims/Disputed liabilities not acknowledged as debt

The Company has received the following demands which are disputed by the Company and are not provided for:

Nature of Contingent liability Status of the case

As at 31st March As at 31st March 2013 (Rs. in lacs) 2012 (Rs. in lacs)

Contingent liability w.r.t Central The disputed demand is pending and State Sales Tax before W.B.Commercial Taxes (A.Y. 1995-1996to2004-2005) Appellate & Revisional Board. 27.50 27.50

Total 27.50 27.50

b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year Rs.26.53 lacs) was issued in favour of Assistant Commissioner of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Karnakata Appellate Tribunal for Commercial Tax at Bangalore.

c) UTKAL Auto has filed a claim against the company before Arbitrator at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs. 76.90 Lacs) against which the company filed a counter claim of Rs.482.74 lacs against UTKAL Auto before the Arbitrator. An award was passed on 31st December, 2011 and the claim is partly accepted amounting to Rs.2.78 lacs with interest at the rate 12% from 1st September, 2006 and the counter claim was rejected. An appeal has been filed in the Hon''ble High Cort of Calcutta against the said order which was admitted on 15th May, 2012 by the Hon''ble High Court.

1.2 There being no indication of decline in net realizable market value below it''s carrying cost as per valuation made in the year 2006- 07, impairment of the assets of the company coming under the purview in terms of Accounting Standard 28 has not been considered.

1.3 Segement Reporting as per Accounting Standard -17 prescribed under the Act.

The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting" issued by The Companies (Accounting Standards) Rules, 2006.

1.4 Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

1.5 Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits net deferred tax asset arising as at 31.03.2013 has not been recognized in the books of accounts.

Ml Remuneration to Managing Director was paid in excess by Rs. 0.27 Lacs (P.Y. Rs. 0.27 Lacs) in reference to remuneration approved by Central Government and has been shown under the heading "Employee Benefit Expenses" (P.Y. "Other Current Assets"). However, the same have since been recovered.

Following adjustments relating to employee benefits have been made in these accounts in keeping with the requirements of Accounting Standard 15 (Revised) on "Employee Benefits" issued by The Companies (Accounting Standards) Rules, 2006.

a) Expenses under defined contribution plan with the following break up has been recognised during the year. Details are given below: -

F. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

G. Super Annuation Fund - The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2013 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on date. Upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to the super annuation fund amounting to Rs.1.30 lacs ( P.Y. Rs.1.30 lacs) was made as per the service rules of the company for the eligible employees and was debited to ''Expenses on Employees''.

H. In respect of Provident funds for eligible employees maintained by a trust, in the nature of defined benefit plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However contribution to those provident funds amounting to Rs. 0.98 Lacs during the year ( P.Y. Rs. 0.92 Lacs ) is recognised as expenses and included in ''Employee Benefit Expenses''. Shortfall of Rs. 0.25 ( P.Y. Rs. Nil) in contribution to such provident funds has been provided to the extent of the information available with the company.

1.6 Reserve Bank of India vide Notification No. DNBS.167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append to its balance sheet prescribed under the Companies Act 1956, the particulars in the format as set out in the schedule annexed, which has been complied with.

1.7 A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and insurance claims was received in earlier years in full and final settlement to the satisfaction of the company which was utilised for repair, renovation and rehabilitation work in the office premises.

1.8 The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement.

1.9 Land & Building (in excess of its own use) & shares (unquoted shares other than of subsidiary companies or company in the same group) amounting to Rs.292.85 lacs & 6.80 lacs respectively held by the company in contravention of Para 19 of Non Banking Financial (Deposit accepting or holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007 in regards to Restriction on investment in land and building and unquoted shares.

However most of such assets are charged with Bank and Financial Institutions and cannot be liquidated to bring the same within limits of prudential norms as mentioned above.

1.10 The previous year figures have been regrouped / restated wherever considered necessary.

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Mar 31, 2012

A) The break-up of equity share subscribed and fully paid-up, subscribed but not fully paid-up could not be furnished in absence of proper details regarding Calls in Arrear, available at present

b) The company has one class of issued shares i.e. equity shares having par value of Rs. 10/- per share. Each hoider of ordinary shares is entitled to one vote per share and equal right for dividend.

c) There has been no change/movements in number of shares outstanding at the beginning and at the end of the reporting period.

d) The Company does not have any holding company/ultimate holding company.

e) Details of shareholders holding more than 5% shares in the company:

Notes to Financial Statements for the year ended 31st March, 2012

h) No calls are unpaid by any Director and Officer of the Company during the year.

i) No shares have been alloted or has been bought back by the company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

j.i) Equity shares issued for consideration other than cash include 9,60,000 Equity shares of Rs.10/- each allotted pursuant to amalgamation of Sanpaola Hambro Nicco Finance Ltd.

j.ii) 4,00,000 Equity Shares of Rs.10/- each alloted pursuant to amalgamation of Nicco Investments Ltd.

j.iii) 19,72,560 Equity Shares of Rs.10/- each issued as free share in the ratio 1:7 due as per scheme of merger approved by Hon'ble Calcutta High Court on 21st April, 1999.

j.iv) 1,38,66,687 Equity Shares of Rs. 10/- each issued to the share holders of Alliance Credit & investments Limited as per scheme of amalgamation approved by Hon'ble Calcutta High Court on 21st April, 1999.

j.v) 1,05,00,000 Equity Shares of Rs.10/- each issued to the shareholders of Overseas Sanmar Financial Limited as per scheme of amalgamation approved by Hon'ble Calcutta High Court on 20th April,2000 and Hon'ble Chennai High Court on 10th May, 2000.

i.a) Rupee Loans from Banks consist of loans from: UCO Bank (Mehta Transport), UTI Bank.

j.b) Nature of Secuity: For Uco Bank (Mehta Transport) - By an agreement for hypothecation of movable plant and machinery to secure a term loan by the company on November 17, 2000. the company hypothecated the following vehicles as security for the repayment of the said term loan facility availed of by itfrom the applicant bank being the 50 number of Ashok Leyland Tusker Turbo tractors along with new chasis lent under Hire Purchse to M/s Mehta Transport Services (I) Ltd.

Further the company hypothecated to and charged in favour of the applicant bank as and by way of first charge thereon:

(i) all the goods described in general terms in the schedule written thereunder being 50 numbers of trailers to be purchased under the term loan and is to be lent under hire purchase agreement.

(ii) all the company's present and future book debts, outstanding monies, receivables, claims, bills, contracts etc.

i.c) Nature of Secuity: For UTI Bank: The facility is secured against assignment of receivable of the selected pool together with the entire interest, ownership and clear title and rights to the assets provided in the hire purchase agreements and also against cash collateral.

i.d) Foreign Currency Loan consists of IFC-Washington, IFCI.

i.e) Nature of Security - For IFC Washington: The company hypothecated and charged as and by way of first fixed and exclusie charge and lien to and / or in favour of the trustee in for the benefit of the corporation, certain properties and assets given on lease or hire purchase or acquired by the company out of finances.

if) Nature of Secuity: For IFCI - The company hypothecated on 29th April. 1999 in tavour of the applicant by virture of which the whole of the spcific Industrial Assets, equipments, plant, machinery and other assets together with its spares, tools and other accerrories acquired /to be acquired, were more particularly described below to the application were hypothecated in favour of the applicant as security for the term loan

Particulars of the equipments, plant, machinery, and other assets acquired by the company out of loan :

1. TIL make Cranes

All the movable properties and immovable properties of the company wherever lying and wherever situated.

ii) All loans have turned Non-Performing Assets in the books of the lenders and the same have been recalled by them and at present being contested in Debt Recovery Tribunals and High Court at Calcutta. Hence, the clause relating to disclosure of terms of repayment of loans in such cases has become inapplicable.

iii) The details of default given below showing dates and amount (Principal and Interest) referring note no. 2.3.iii is as furnished by the management.

iv.a) UCO Bank has filed application in DRT -1 to recover Rs.327 lacs (previous year Rs.327 lacs) on account of term loan, matter is pending.

iv.b) IFCI has filed an application in DRT -1 to recover Rs.62.91 lacs ( previous year Rs.62.91 lacs ), matter is pending.

iv.c) Indus Ind Bank has filed an application in DRT, Chennai to recover Rs. 164.46 lacs (previous year Rs. 164.46 lacs) on account of Securitisation loan which is being contested.

iv.d) Axis Bank has filed an application in DRT, Chennai to recover Rs.1368 lacs (previous year Rs.1368 lacs) which is also being contested.

iv.e) International Finance Corporation Washington initiated a suit in the Hon'ble High Court at Calcutta for recovery of a sum of US$ 26,82,877.73 ( previous year US$ 26,82,877.73) with further interest against the company. The case is being contested.

iv.f) UCO Bank has taken measures under section 13(4) of the SARFAESI Act against the company. The company filed an application under section 17(1) of the said Act.

In the Sarfaesi proceedings against the company by UCO Bank, being aggrieved by DRAT's Order, company filed a Writ Petition before Hon'ble High Court, Calcutta and due to some deficiency in the procedure followed by UCO Bank and Others., High Court Ordered that no coercive steps should be taken by Bank. Bank has appealed against this order.

v) Persuant to an application dated 17.03.2008 made by the company u/s 391 and 394 of the Companies Act, 1956 before the Hon'ble High Court, Calcutta to reduce the paid up equity share capital from Rs. 10 to Rs.2 each and issue new equity shares of Rs.2 each to the fixed deposit holders to the extent of their pricipal amount due in the company as on 01.04.2007 at a price in conformity with SEBI ( Disclosure and Investor Protection Guidelines 2000).Seperate meetings of shareholders and fixed deposit holders were convened as per the order of the Hon'ble High Court, Calcutta under the chairmanship of seperate court appointed chairperson and the scheme was duly approved with requisite majority in both the meetings. The matter is pending before the Hon'ble High Court, Calcutta.

vi) Company has obtained an interim stay order from Hon'ble High Court Calcutta vide order dated 15th February, 2008 restraining deposit holders from initiating any proceedings against the company and stayed the proceedings already initiated till disposal of the application made by the company u/s 391 and 394 of the Companies Act, 1956 pending before Hon'ble High Court, Calcutta.

vii) Networth of the company has completely been eroded due to large provisioning and huge loss suffered and consequently outstanding balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank of India.

viii) The Company has paid to a number of depositors on hardship cases on settlement basis based on principal amount outstanding.

ix) The entire secured loan accounts of the company amounting to Rs.121.35 crores (previous year Rs.120.14 crores) except interest accrued and due, has become NPA in the books of the lenders. The banks/Financial Institutions have stopped giving statements and confirmations. Interest on these accounts have been provided as per the last agreed rates. However, the said accounts remain unconfirmed.

x) Honorable Company Law Board Eastern Region Bench had passed an order vide it's order dated 22nd March, 2005 against ... Company's petition No. 641(58AA)/ERB/2004 for rescheduling the repayment of Company's Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act. The company had filed an application before CLB in the month of February, 2007 to extend the period of payment of these dues and CLB has modified the order dated 22nd March, 2005 vide their order dated 28.06.2007 granting an extension of six months on payment of deposit from the date of maturity of deposits from March, 2007 and onwards. The said order also stipulates that no interest need to be paid along with the last instalement as directed in the original scheme and the question of payment of interest shall be deceided later and accordingly interest provided at contracted rate and as per CLB order on outstanding Fixed Deposit liability has been shown as 'interest accrued but not due' under Other Current Liability. Refer note 2.7 - Interest Accrued and not due.

xi) Entire amount of Fixed Deposits amounting to Rs 1205.07 lacs (previous Year 1982.04 Lacs) has matured and is due for payment.

i) UCO Bank, the leader of the consortium of bankers, moved an application in the Debt Recovery Tribunal on 29.11.2005 to recover the outstanding dues amounting to Rs. 119.23 crores ( previous year Rs. 119.23 crores ) pending against the company which the company has contested. The learned D.R.T has passed an order on 01.12.2005 that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose off any of it's secured properties. However, the company shall carry on it's business as usual.

ii.A) Nature of Security: The company extended a joint deed of hypothecation in favour of consortium of bankers headed by UCO bank whereby the company hypothecated as and by way of first charge its entire tangible properties and assets both present and future including plant and machinery and /or other assets purchased and / or acquired for its hire pirchase/leasing business/operations and all relative lease rentals, hire charges receivables, both present and future.

ii.B) The company further created equitable mortgage in favour of the applicant banks in respect of the properties by way of deposit of / original title deeds on June 20, 2001:

a) Office Space at Nicco House, 2nd Floor, 2 Hare Street, Kolkata-700 001;

b) Flat at 718, Dalmal Towers, Nariman Point, Mumbai - 400 021;

c) Flat no. 3 at 9, South North nRoad, Juhu Ville Parle Development Scheme, Mumbai-400 049;

d) Premises at 93/4, Karaya Road, 4th Floor Kolkata - 700 019;

e) 0.65 acre, 2.92 acres, 1.70 acres, 0.95 acre, 0.85 acre and 5.90 acres of land at Poolavadi, Coimbatore, Tamil Nadu;

f) 142kenels, 17marlasoflandinkhewatnos. 16,37,38,61 &79, khatonlnos. 21 mln, 143min,44min,83min, 108min respectively at Village-Salhawas, Tehsil-Rewari, District-Rewari, Haryana.

iii) All loans have turned Non-Performing Assets in the books of the lenders and the same have been recalled by them and at present being contested in Debt Recovery Tribunals. Hence, the clause relating to disclosure of terms of repayment of loans in such cases has become inapplicable.

iv) Refer Note 2.3.ix

v) The details of default given below showing dates and amount (Principal and Interest) referring note no. 2.5.V is as furnished by the

a) The unclaimed deposit has been arrived at based on such depositor who had not claimed their deposit amount by surrendering the deposit receipt with the Company though they have matured and also payable as per CLB Order. Many depositors amongst them are traceable but despite request not surrendering their deposit receipt becuase they are treating FDR as basic proof of deposit of money and willing to part with it only if deposit amount is paid in one lump sum. Company is unable to pay to deposoitor due to the precarious financial condition but settling with such depositors who are approaching the company under hardship condition. Besides, a Scheme of Compromise with fixed depositors under Section 391 and 394 of the Comapnies Act, 1956 is pending before Hon'ble High Court, Calcutta which covers these depositors also.

b) In the view of the critical financial conditions which the company is facing, it could not transfer an amount of Rs. 6,31,535/- (previous year Rs. 1,647,712 ) to 'Investors Education and Protection Fund'.

b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year Rs.26.53 lacs) was issued in favour of Assistant Commissioner«'"/* of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Kamakata Appellate Tribunal for Commercial Tax at Bangalore.

c) UTKALAuto has filed a claim against the company before Arbitrator at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs 76.90 .. v Lacs) against which the company filed a counter claim of Rs.482.74 lacs against UTKAL Auto before the Arbitrator. An award was passed on 31st December,2011 and the claim is partly accepted amounting to Rs.2.78 lacs with interest at the rate 12% from 1st September, 2006 and the counter claim was rejected. An appeal has been filed in the Hon'ble High Cort of Calcutta against the said order which was admitted on 15th May,2012 by the Hon'ble High Court.

1.1 There being no indication of decline in net realizable market value below it's carrying cost as per valuation made in the year 2006- 07, impairment of the assets of the company coming under the purview in terms of Accounting Standard 28 has not been considered.

1.2 Segement Reporting as per Accounting Standard -17 prescribed under the Act.

The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting' issued by the Institute of Chartered Accountants of India.

1.3 Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

1.4 Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits for reasons stated in note no 2.23, 2.5 (a) and 2.3.iv.(a) to 2.3.iv.(f), net deferred tax asset arising as at 31.03.2012 has not been recognized in the books of accounts.

b) Basic/diluted earning per share.as required by Accounting Standard (AS-20)" Earning per share", of Rs. -9.94 (previous year Rs.- 10.04) has been calculated by dividing the net loss after taxation for the year as per the accounts which is attributable to equity shareholder by 4,01,46,773 being the weighted average number of equity shares outstanding during the year.

1.5 Employee Benefits:

Following adjustments relating to employee benefits have been made in these accounts in keeping with the requirements of Accounting Standard 15 (Revised) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

A. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

B. Super Annuation Fund - The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2012 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on date.Upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to the super annuation fund amounting to Rs.1.30 lacs ( previous year Rs:1.30 lacs ) was made as per the service rules of the company for the eligible employees and was debited to 'Expenses on Employees'.

C. In respect of Provident funds for eligible employees maintained by a trust, in the nature of defined benefit plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However contribution to those provident funds amounting to Rs.0.98 lacs during the year (previous year Rs.1.07 lacs) is recognised as expenses and included in 'Expenses on Employees'. Shortfall of Rs. Nil ( previous year Rs.0.09 lacs ) in contribution to such provident funds has been provided to the extent of the informatiorf available with the company.

1.7 Reserve Bank of India vide Notification No. DNBS. 167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall d yv append to its balance sheet prescribed under the Companies Act 1956, the particulars in the format as set out in the schedule annexed, which has been complied with.

1.8 A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and insurance claims was received in earlier years in full and final settlement to the satisfaction of the company which was utilised for repair, renovation and rehabilitation work in the office premises.

1.9 The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement.

1.10 The previous year figures have been regrouped / restated wherever considered necessary to conform to the current year's classification.

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Mar 31, 2011

1. The Company has complied with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for income recognition, accounting standards, provisions/ write-downs of bad and doubtful debts.

2. Contingent Liabilities

a) Claims/Disputed liabilities not acknowledged as debt.

The Company has received the following demands which are disputed by the Company and are not provided for:

Nature of Status of the case As at As at Contingent 31st March 31st March liability 2011 (Rs. 2010 in lacs) (Rs. in lacs)

Contingent liability w.r.t Central The disputed demand is pending and State Sales Tax before W.B. Commercial Taxes (A.Y. 1995-1996 to 2004-2005) Appellate & Revisional Board. 27.50 27.50 Total 27.50 27.50

b) Advance paid / Bank Guarantee of Rs. 26.53 lacs (Previous Year Rs. 26.53 lacs) was issued in favour of Assistant Commissioner of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Karnakata Appellate Tribunal for Commercial Tax at Bangalore.

3. (b) Remuneration paid to Managing Director in the financial year 2007-08 was in excess by Rs. 2.72 lacs in reference to the remuneration approved by the Central Government. An appeal was made to the Central Government to approve this payment.

The Managing Director of the Company was reappointed for a period of two years i.e. from 15th April' 2008 to 14th April' 2010 and again reappointed for a period of three years i.e from 15th April' 2010 to 14th April' 2013.

Further for the F/Y 2008-09,2009-10 and 2010-11 company has received approval from the Central Government for paying him Rs. 8.26 lacs p.a. Actual payment crossed the above limit fixed by the Central Government in the above mentioned four years by Rs. 3.75 lacs. However the entire amount of such excess remuneration paid to him has since been refunded back to the Company.

4. Subsequent to cessation of SWAP agreement with UCO Bank, foreign currency loan has been valued at the rate prevailing as at close of 31.03.2011 and Rs. 9.04 lacs ( previous year foreign currency fluctuation gain of Rs. 107.51 lacs, refer Schedule 11) has been taken into profit & loss account as foreign currency fluctuation gain (refer Schedule 11).

5. Related Party disclosures

Related party disclosures as required under Accounting Standard (AS) -18 on 'related party disclosures' issued by the Institute of Chartered Accountants of India are given below :

Name of the Party Nature of Relationship

1. Subsidiary Company Nicco Insurance Agents & Consultants Ltd.

2. Associates Alliance Management & Fiscal Services Ltd.

3. Key Management personnel Hon'ble Justice N K Bhattacharyya (Retired) Chairman (upto 30th May '2010)

D. D. Saila - Chiarman (from 31st May '2010)

L. N. Kaul - Managing Director & Company Secretary

J. Mukherjee - Chief Financial Officer

S. K. Saha - Deputy General Manager upto 31.12.10

6. Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

7. Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits for reasons stated in note no. 10 and 11 of Schedule 15B, net deferred tax asset arising as at 31.03.2011 has not been recognized in the books of accounts.

8. The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India.

9. There being no indication of decline in net realizable market value below it's carrying cost as per valuation made in the year 2006- 07, impairment of the assets of the company coming under the purview in terms of Accounting Standard 28 has not been considered.

10. RBI has cancelled the Certificate of Registration of the Company to carry out Non-Banking Financial activities of the Company vide it's order dated 31st March, 2005 against which Company has preferred an appeal before appellate authority for NBFC, Joint Secretary, Ministry of Finance, Govt, of India, New Delhi which is also pending. In view of the above, the accounts of the company has been prepared on going concern concept based on the legal opinion obtained.

11. a) UCO Bank, the leader of the consortium of bankers, moved an application in the Debt Recovery Tribunal on 29.11.2005 to recover the outstanding dues amounting to Rs. 119.23 crores (previous year Rs. 119.23 crores) pending against the company which the company has contested. The learned D.R.T has passed an order on 01.12.2005 that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose off any of it's secured properties. However, the company shall carry on it's business as usual.

b) UCO Bank has filed another application in DRT -1 to recover Rs. 327 lacs ( previous year Rs. 327 lacs ) on account of term loan, matter is pending.

c) IFCI has filed an application in DRT -1 to recover Rs. 62.91 lacs ( previous year Rs. 62.91 lacs ), matter is pending.

d) Indus Ind Bank has filed an application in DRT, Chennai to recover Rs. 164.46 lacs ( previous year Rs. 164.46 lacs ) on account of Securitisation loan which is being contested.

e) Axis Bank has filed an application in DRT, Chennai to recover Rs. 1368 lacs ( previous year Rs. 1368 lacs) which is also being contested.

f) International Finance Corporation initiated a suit in the Hon'ble High Court at Calcutta for recovery of a sum of US$ 26,82,877.73 ( previous year US$ 26,82,877.73) with further interest against the company. The case is being contested.

g) UCO Bank has taken measure under section 13(4) of the SARFESI Act against the company. The company filed an application under section 17(1) of the said Act.

In the Sarfesi proceedings against the company by UCO Bank, being aggrieved by DRAT's Order, company filed a Writ Petition before Hon'ble High Court, Calcutta and due to some deficiency in the procedure followed by UCO Bank and Others., High Court Ordered that no coercive steps should be taken by Bank. Bank has appealed against this order.

h) UTKAL Auto has filed a claim of Rs. 76.90 lacs (previous year 76.90 lacs) against the company before Arbitrator at Cuttack. The company has filed a counter claim of Rs. 482.74 lacs ( previous year Rs. 482.74 lacs ) against UTKAL Auto before the Arbitrator, which is pending. Necessary action, if any, will be taken on disposal of the arbitration proceedings.

12. (a) The entire secured loan accounts of the company ( except interest accrued and due (amounting to Rs. 120.14 crores ( previous year Rs. 120.23 crores) has become NPA in the books of the lenders. The banks/Financial Institutions have stopped giving statements and confirmations. Interest on these accounts have been provided as per the last agreed rates. However, the said accounts remain unconfirmed.

(b) Positive balance lying in the current accounts with the members of the consortium bank, i.e. Rs. 162.11 lacs ( previous year Rs. 162.11 lacs ) in UCO Bank, Rs. 0.19 lacs ( previous year Rs. 0.19 lacs ) in Bank of Baroda, Rs. 3.01 lacs ( previous year Rs. 3.01 lacs ) in Canara Bank, Rs. 0.10 lacs ( previous year Rs. 0.10 lacs ) in Central Bank of India, Rs. 0.01 lacs ( previous year Rs. 0.01 lacs ) in United Bank of India, Rs. 42.53 lacs ( previous year Rs. 42.53 lacs ) in Indian Overseas Bank, Rs. 0.05 lacs ( previous year Rs. 0.05 lacs ) in State Bank of Mysore, Rs. 0.20 lacs ( previous year Rs. 0.20 lacs ) in State Bank of Travancore remain unconfirmed and inaccessable for the reasons stated in point no. 12(a) above.

(c) Balance of Rs. 1.05 lacs from other Banks also remain unconfirmed.

(d) Fixed deposit made by the company with the members of the consortium bank, i.e. Rs.13.46 lacs ( previous year Rs.13.46 lacs) with Bank of Baroda, Rs. 0.05 lacs ( previous year Rs. 0.05 lacs ) in Indian Overseas Bank and with other bank amounting to Rs. 0.25 lacs ( previous year Rs. 0.25 lacs ) remain unconfirmed and accordingly was provided for.

13. Employee Benefits :

b) Particulars in respect of post retirement benefit under defined benefit plans are as follows :

F. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

G. Implementation of revised AS-15 has resulted change in treatment of defined benefit plan which has contributed to increase in defined benefit obligation by Rs. 1.00 lac (previous year decrease of Rs. 1.91 lacs) with corresponding increase in loss by Rs. 1.00 lac (previous year decrease of Rs. 1.91 lacs).

H. The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2011 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on date. Upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to the super annuation fund amounting to Rs. 1.30 lacs ( previous year Rs. 1.51 lacs ) was made as per the service rules of the company for the eligible employees and was debited to 'Expenses on Employees'.

I. In respect of Provident funds for eligible employees maintained by a trust, in the nature of defined benefit plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However contribution to those provident funds amounting to Rs. 1.07 lacs during the year ( previous year Rs. 1.11 lacs ) is recognised as expenses and included in 'Expenses on Employees'. Shortfall of Rs. 0.09 lacs ( previous year Rs. 0.64 lacs ) in contribution to such provident funds has been provided to the extent of the information available with the company.

14. (a) Honourable Company Law Board Eastern Region Bench had passed an order vide it's order dated 22nd March, 2005 against Company's petition No. 641(58AA)/ERB/2004 for rescheduling the repayment of Company's Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act. The company had filed an application before CLB in the month of February, 2007 to extend the period of payment of these dues and CLB has modified the order dated 22nd March, 2005 vide their order dated 28.06.2007 granting an extension of six months on payment of deposit from the date of maturity of deposits from March, 2007 and onwards. The said order also stipulates that no interest need to be paid along with the last instalement as directed in the original scheme and the question of payment of interest shall be decided later and accordingly interest provided at contracted rate and as per CLB order on outstanding Fixed Deposit liability has been shown as 'interest accrued but not due' under current liability.

(b) Pursuant to an application dated 17.03.2008 made by the company u/s 391 and 394 of the Companies Act, 1956 before the Hon'ble High Court, Calcutta to reduce the paid up equity share capital from Rs. 10 to Rs. 2 each and issue new equity shares of Rs. 2 each to the fixed deposit holders to the extent of their principal amount due in the company as on 01.04.2007 at a price in conformity with SEBI ( Disclosure and Investor Protection Guidelines 2000). Separate meetings of shareholders and fixed deposit holders were convened as per the order of the Hon'ble High Court, Calcutta under the chairmanship of separate court appointed chairperson and the scheme was duly approved with requisite majority in both the meetings. The matter is pending before the Hon'ble High Court, Calcutta.

(c) Company has obtained an interim stay order from Hon'ble High Court Calcutta vide order dated 15th February, 2008 restraining deposit holders from initiating any proceedings against the company and stayed the proceedings already initiated till disposal of the application made by the company u/s 391 and 394 of the Companies Act, 1956 pending before Hon'ble High Court, Calcutta.

(d) Entire amount of Fixed Deposits ( principal value excluding interest ) amounting to Rs. 1982.04 lacs (previous year Rs. 2363.60 lacs) has matured and is due for payment as on 31st March, 2011.

15. (a) Networth of the company has completely been eroded due to large provisioning and huge loss suffered and consequently outstanding balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank of India.

(b) The unclaimed deposit has been arrived at based on such depositor who had not claimed their deposit amount by surrendering the deposit receipt with the Company though they have matured and also payable as per CLB Order. Many depositors amongst them are traceable but despite request not surrendering their deposit receipt because they are treating FDR as basic proof of deposit of money and willing to part with it only if deposit amount is paid in one lump sum. Company is unable to pay to depositor due to the precarious financial condition but settling with such depositors who are approaching the company under hardship condition. Besides, a Scheme of Compromise with fixed depositors under Section 391 and 394 of the Companies Act, 1956 is pending before Hon'ble High Court, Calcutta which covers these depositors also.

In the view of the critical financial conditions which the company is facing , it could not transfer an amount of Rs 1,647,712 ( previous year Rs. 1,370,384 ) to 'Investors Education and Protection Fund'.

16. Basic/diluted earning per share, as required by Accounting Standard (AS-20)" Earning per share", of Rs. -10.04 ( previous year Rs. -8.77 has been calculated by dividing the net loss after taxation for the year as per the accounts which is attributable to equity shareholder by 40146773 being the weighted average number of equity shares outstanding during the year.

17. Disclosure as per Accounting Standard - 29 regarding Provisions, Contingent Liabilities and Contingent Assets :

Interim stay has been vacated by the Hon'ble High Court of Madras which was granted earlier against the applicability of Service Tax on Lease and Hire Purchase transaction and the matter is pending before Supreme Court. Based on the interim stay, Service Tax on financial transaction amounted to Rs. Nil (previous year(s) Rs. 29.33 lacs which has already been provided for).

18. Reserve Bank of India vide Notification No. DNBS.167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append to its balance sheet prescribed under the Companies Act 1956, the particulars in the format as set out in the schedule annexed, which has been complied with.

19. A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and 'on account' payment of Rs. 10 lacs was received in the previous year which was utilised for repair, renovation and rehabilitation work in the office premises. The said amount was received against claim under relevant policies which was lodged with the Insurance Company and a further payment of Rs. 6.19 lacs was received during the year as full and final settlement amount, which was also utilised for the said purpose.

20. It has been observed by the management that a fraud had been perpetrated by a few employees of the company during the F.Y 2008 - 09 and 2009-10. The matter was referred to Deputy Commissioner ( Detective Department) Kolkata Police, Lalbazar for further investigation. Two employees were identified as perpetrator of fraud against whom necessary action was taken by police. Investigation is still in progress, impact of which could be ascertained on completion of the investigation. However, based on the prima facie investigation made by the management a sum of Rs. 140.62 lacs has appeared to have been misappropriated by the employees which has been shown under the head " Accounts Receivable - Others " in Schedule 7(c) and has been provided for.

21. On recommendation from Registrar of Companies, Kolkata, Ministry of Corporate Affairs, Government of India directed Serious Fraud Investigation Office to carry out investigation against the company under section 235 of the Companies Act, 1956 which is under progress.

22. (i) Interest cost includes provision of Rs. 2.08 lacs ( previous year Rs. 1.57 lacs ) towards penal interest levied by RBI for shortfall in maintenance of SLR.

(ii) Interest expense is net of Rs. 37.76 lacs ( Previous year Rs. 87.78 lacs ) being interest earned on deposit and others.

23. Other receipts include Rs. 1.25 lacs (previous year Rs. 1.25 lacs) from rent HP income includes Rs. Nil (previous year Rs. 3.63 lacs) recovered from NPA parties.

24. Based on the informations available with the company, there are no dues towards Micro, Small and Medium Enterprises as on 31.03.2011.

25. The Company has paid to a number of depositors on hardship cases on settlement basis based on principal amount outstanding.

26. The process of preparation of Fixed Asset register destroyed in the fire has been initiated. However, the W.D.V of assets (i.e furniture, computers etc.) destroyed in fire is not significant.

27. All assets financed through Hire Purchase / Lease have turned Non Performing Assets (N.P.A) in the books of the Company and have been provided for. List of such inventories are available excepting a few cases where financing were made through dealer which is not substantial.

28. The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement.

29. The initiation has been taken to complete the process of transfer of shares where ever possible and to update the records.

30. The investigation for the fraud committed by two employees in the FY. 2008-09 and thereafter is on the verge of completion and amount will be finally ascertained on receipt of final report from Kolkata Police.

31. The previous year figures have been regrouped / restated wherever considered necessary to conform to the current year's classification.

---

Mar 31, 2010

1. The Company has complied with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for income recognition, accounting standards, provisions/ write-downs of bad and doubtful debts.

2. Contingent Liabilities

a) Claims/Disputed liabilities not acknowledged as debt.

The Company has received the following demands which are disputed by the Company and are not provided for:

Nature of Contingent liability Status of the case As at 31st March As at 31st March 2010 (Rs. lacs) 2009 (Rs. lacs)

Contingent liability w.r.t Central The disputed demand is pending and State Sales Tax before W.B.Comme- rcial Taxes

(A.Y. 1995-1996 to 2004-2005) Appellate & Revisi- onal Board. 27.50 27.50

Contingent liability w.r.t Income The disputed demand was pending

Tax (A.Y. 2000-01, 2001-02 & before Commissioner 2003-04) (Appeals)-VI - 114.01

Total 27.50 141.51



b) Advance paid / Bank Guarantee of Rs. 26.53 lacs (Previous Year Rs. 26.53 lacs) was issued in favour of Assistant Commissioner of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Karnakata Appellate Tribunal for Commercial Tax at Bangalore.

c) In respect of certain future hire purchase instalments of Rs. nil lacs (Previous Year Rs. 2.27 lacs) against securitisation with bank and financial institution.

3. (a) Wholetime Directors including Managing Directors Remuneration (Minimum)

(b) The Managing Director was paid overall remuneration within the sanctioned scale of pay approved by the shareholders at the Annual General meeting held on 28th September, 2005 and subsequently approved by Central Government on 7th August, 2006. However payments made during the FY 2007-08 in terms of the scale approved for the first year crossed the permissible limit by Rs. 2.72 lacs under section 198(4) of the Companies Act, 1956 for which the company has sought the required approval of the Central "Government.

The Managing Director of the Company was re appointed for a period of two years, i.e. from 15th April 2008 to 14th April, 2010. His reappointment alongwith salary and perquisites amounting to Rs. 9.00 lacs per annum were approved by the Board of Directors in its meeting held on 12th April, 2008 and subsequently by the shareholders of the company on 26th September, 2008 in the Annual General Meeting of the company. Approval from Central Government vide letter dated 14th May, 2010 has- been received reducing the remuneration to Rs. 8.26 lacs per annum. Board has decided to appeal to Central Government to reconsider the decision and to follow up the pending approval for the excess remuneration paid in the year 2007-08.

4. Subsequent to cessation of SWAP agreement with UCO Bank, foreign currency loan has been valued at the rate prevailing as at close of 31.03.2010 and Rs. 107.51 Lacs (previous year foreign currency fluctuation loss of Rs. 205.79 Lacs, refer Schedule 13) has been taken into profit & loss account as foreign currency fluctuation gain (refer Schedule 11).

6. Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

7. Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits for reasons stated in note no. 10 and 11 of Schedule 15B, net deferred tax asset arising as at 3.1.03.2010 has not been recognized in the books of accounts.

8. The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India.

9. There being no indication of decline in net realizable market value below its carrying cost as per valuers report obtained by the company, impairment of the assets of the company coming under the purview in terms of Accounting Standard 28 has not been considered.

10. RBI has cancelled the Certificate of Registration of the Company to carry out Non-Banking Financial activities of the Company vide its order dated 31st March, 2005 against which Company has preferred an appeal before appellate authority for NBFC, Joint Secretary, Ministry of Finance, Govt, of India, New Delhi which is also pending. In view of the above, the accounts of the company has been prepared on going concern concept based on the legal opinion obtained.

11. a) Uco Bank, the leader of the consortium of bankers, moved an application in the Debt Recovery Tribunal on 29.11.2005 to recover the outstanding dues amounting to Rs. 119.23 crores (previous year Rs. 119.23 crores) pending against the company which the company has contested. The learned D.R.T has passed an order on 01.12.2005 that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose of any of its secured properties. However, the company shall carry on its business as usual.

b) Uco Bank has filed another application in DRT -1 to recover Rs. 327 lacs (previous year Rs. 327 lacs) on account of term loan, matter is pending.

c) IFCI has filed an application in DRT - I to recover Rs. 62.91 lacs (previous year Rs. 62.91 lacs), matter is pending.

d) Indus Ind Bank has filed an application in DRT, Chennai to recover Rs. 164.46 lacs (previous year Rs. 164.46 lacs) on account of Securitisation loan which is being contested.

e) Axis Bank has filed an application in DRT, Chennai to recover Rs. 1368 lacs (previous year Rs. Nil) which is also being contested.

f) International Finance Corporation initiated a suit in the Honble High Court at Calcutta for recovery of a sum of US$ 26,82,877.73 (previous year US$ 26,82,877.73) with further interest against the company. The case is being contested.

g) UCO Bank has taken measure under section 13(4) of the SARFESI Act against the company. The company filed an application under section 17(1) of the said.Act.

In the Sarfesi proceedings against the company by UCO Bank, being aggrieved by DRATs Order, company filed a Writ Petition before Honble High Court, Calcutta and due to some deficiency in the procedure followed by UCO Bank and Ors., High Court Ordered that no coercive steps should be taken by Bank. Bank has appealed against this order.

h) UTKAL Auto has filed a claim of Rs. 76.90 lacs against the company before Arbitrator at Cuttack. The company has filed a counter claim of Rs. 482.74 lacs against UTKAL Auto before the Arbitrator, which is pending. Necessary action, if any, will be taken on disposal of the arbitration proceedings.

12. (a) The loan accounts of the company amounting to Rs. 120.23 crores (previous year Rs. 121.30 crores) has become NPA in the books of the lenders. The banks/ Financial Institutions have stopped giving statements and confirmations. Interest on these accounts have been provided as per the last agreed rates. However, the said accounts remain unconfirmed.

(b) Positive balance lying in the current accounts with the members of the consortium bank, i.e, Rs. 162.11 lac (previous year Rs. 162.11 lacs) in UCO Bank, Rs. 0.19 lac (previous year Rs. 0:19 lacs) in Bank of Baroda, Rs. 3.01 lac (previous year Rs. 3.01 lacs) in Canara Bank, Rs. 0.10 lac (previous year Rs. 0.10 lacs) in Central Bank of India, Rs. 0.01 lac (previous year Rs. 0.01 lacs) in United Bank of India, Rs. 42.53 lac (previous year Rs. 42.53 lacs) in Indian Overseas Bank, Rs. 0.05 lac (previous year Rs. 0.05 lacs) in State Bank of Mysore and Rs. 0.20 lac (previous year Rs. 0.20 lacs) in State Bank of Travancore remain unconfirmed and unaccessable for the reasons stated in point no. 12(a) above. -

(c) Balance of Rs. 1.07 lac (previous year Rs. 0.95 lac) from other Banks also remain unconfirmed.

(d) Fixed deposit made by the company with the members of the consortium bank, i.e, Rs. 13.46 lac (previous year Rs. 13.46 lacs) with Bank of Baroda, Rs. 0.05 lac (previous year Rs. 0.05 lac) in Indian Overseas Bank and with other bank amounting to Rs. 0.25 lac (previous year Rs. 0.25 lac) remain unconfirmed and accordingly was provided for.

13. Employee Benefits :

Following adjustments relating to employee benefits have been made in these accounts in keeping with Accounting Standard 15 (Revised) issued by the Institute of Chartered Accountants of India.

F. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

G. Implementation of revised AS-15 has resulted change in treatment of defined benefit plan which has contributed to decrease in defined benefit obligation by Rs. 1.91 lacs with corresponding decrease in loss by Rs. 1.91 lacs.

H. The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2010 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on that date and hence accrued pension as at 31.03.2010 was not valued during actuarial valuation of superannuation fund. However, contribution to the super annuation fund amounting to Rs. 1.51 lacs (previous year Rs. 1.27 lacs) was made as per the service rules of the company for the eligible employees and was debited to Expenses on Employees.

I. In respect of Provident funds in the matter of defined benefit plan, in the absence of issuance of Guidance Note from the Actuarial Society of India, it is difficult to get it reliably measured. Therefore, contribution to those provident funds amounting to Rs. 1.11 lacs (previous year Rs. 1.06 lacs) during the year is recognised as expenses and included in Expenses on Employees. Shortfall of Rs. 0.64 lacs (previous year Rs. nil) in contribution to. the provident funds in the nature of defined benefit plans is provided to the extent of the information available with the company.

4. Honorable Company Law Board Eastern Region Bench had passed an order vide its order dated 22nd March, 2005 against Companys petition No. 641 (58AA)/ERB/2004 for rescheduling the repayment of Companys Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act. The company had filed an application before CLB in the month of February 2007 to extend the period of payment of these dues and CLB has modified the order dated 22nd March, 2005 vide their order dated 28.06.2007 granting an extension of six months on payment of deposit from the date of maturity of deposits from March 2007 and onwards. The said order also stipulates that no interest need to be paid alongwith the last instalment as directed in the original scheme and the ¦ question of payment of interest shall be deceided later and accordingly interest provided at contracted rate and as per CLB order on outstanding fixed Deposit liability has been shown as interest accrued but not due under current liability.

Persuant to an application made by the company u/s 391 and 394 of the Companies Act, 1956 before the Honble High Court, Calcutta to reduce the share capital of the company and issue equity share to the fixed deposit holders in lieu of their outstanding principal as at 01.04.2007, seperate meetings of shareholders and fixed deposit holders were convened as per the order of the Honble High Court, Calcutta under the chairmanship of seperate court appointed chairperson and the scheme was duly approved with requisite majority in both the meetings. The matter is pending before the Honble High Court, Calcutta.

Company has obtained an interim stay order from Honble High Court Calcutta vide order dated 15th February, 2008 restraining deposit holders from initiating any proceedings against the company and stayed the proceedings already initiated till disposal of the application made by the company u/s 391 and 394 of the Companies Act, 1956 pending before Honble High Court, Calcutta.

As against the outstanding dues of Rs. 2547.91 lacs payable upto 31.03.2010 as per CLB order, the company has paid / adjusted Rs. 532.06 lacs towards Fixed Deposit.

15. Networth of the company has completely been eroded due to large provisioning and huge loss suffered and consequently outstanding balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank of India.

16. Basic/diluted earning per shares.as required by Accounting Standard (AS-20)" Earning per share", of Rs. -8.77 (previous year Rs. -10.14) has been calculated by dividing the net loss after taxation for the year as per the accounts which is attributable to equity shareholder by 40146773 being the weighted average number of equity shares outstanding during the year.

17. Disclosure as per Accounting Standard - 29 regarding Provisions, Contingent Liabilities and Contingent Assets :

Interim stay has been vacated by the Honble High Court of Madras which was granted earlier against the applicability of Service Tax on Lease and Hire Purchase transaction and the matter is pending before Supreme Court. Based on the interim stay, Service Tax on financial transaction amounting to Rs.29.33 lacs which was not paid earlier at Southern Division of the comapny has now being provided for.

18. Reserve Bank of India vide Notification No. DNBS.167/CGN (OPA)-2003 dt. March 29, 2003 has directed that every NBFC shall append to its balance sheet prescribed under the Companies Act, 1956, the particulars in the format as set out in the schedule annexed, is complied with.

19. A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and on account payment of Rs. 10 lacs was received which was utilised for repair, renovation and rehabilitation work in the office premises. The said amount was received against claim under relevant policies which was lodged with the Insurance Company awaiting settlememt and the amount of settlement will be adjusted in the year of settlement as the amount is unascertained.

20. It has been observed by the management that a fraud had been perpetrated by a few employees of the company during the FY. 2008-09 and thereafter. The matter was referred to Deputy Commissioner ( Detective Department) Kolkata Police, Lalbazar for further investigation. Two employees were identified as perpetrator of fraud against whom necessary action was taken by police. Investigation is still in progress, impact of which could be ascertained on completion of the investigation. However, based on the prima facie investigation made by the management a sum of Rs. 140.62 lacs has appeared to have been misappropriated by the employees which has been shown under the head " Accounts Receivable - Others " in Schedule 7(c) and has been provided for.

Further an amount of Rs. 4.33 lacs and Rs. 2.60 lacs, debited and credited respectively by bank has not been responded in the absence of proper details.

21. On recommendation from Registrar of Companies, Kolkata, Ministry of Corporate Affairs, Government of India directed Serious Fraud Investigation Office to carry out investigation againt the company under section 235 of the Companies Act, 1956 which is under progress.

22. (i) Interest cost includes provision of Rs. 1.57 lacs (previous year Rs. 29.39 lacs) towards penal interest levied by RBI for shortfall in maintenance of SLFi.

(ii) Interest is net of Rs. 87.78 lacs (previous year Rs. 24.05 lacs) being interest earned on deposit and others.

23. Other receipts include Rs. 1.25 lacs from rent. HP income includes Rs. 3.63 lacs recovered from NPA parties.

24. Based on the informations available with the company, there are no dues towards Micro and Small Enterprises as on 31.03.2010.

25. The previous year figures have been recast / restated wherever necessary to conform to the current years classification.