Accounting Policies of Dharani Finance Ltd. Company

Mar 31, 2023

Significant Accounting Policies

a) Current versus non-current classification

The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification.

An asset is treated as current when it is:

i) Expected to be realised or intended to be sold or
consumed in normal operating cycle

ii) Held primarily for the purpose of trading

iii) Expected to be realised within twelve months after
the reporting period, or

iv) Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

i) It is expected to be settled in normal operating
cycle

ii) It is held primarily for the purpose of trading

iii) It is due to be settled within twelve months after the
reporting period, or

iv) There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities.

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified 3
months as its operating cycle.

b) Fair value measurement

The Company has applied the fair value measurement
wherever necessitated at each reporting period.

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. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

i) In the principal market for the asset or liability;

ii) In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must
be accessible by the Company.

The fair value of an asset or liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non - financial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in its
highest and the best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
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 : Quoted (unadjusted) market prices in active
market for identical assets or liabilities;

Level 2 : Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable; and

Level 3 : Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable.

For assets and liabilities that are recognized in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.

The Company has designated the respective team
leads to determine the policies and procedures for both
recurring and non - recurring fair value measurement.
External valuers are involved, wherever necessary
with the approval of Company''s board of directors.
Selection criteria include market knowledge,
reputation, independence and whether professional
standards are maintained.

For the purpose of fair value disclosure, the Company
has determined classes of assets and liabilities on
the basis of the nature, characteristics and risk of the
asset or liability and the level of the fair value hierarchy
as explained above. The component wise fair value
measurement is disclosed in the relevant notes.

c) Revenue Recognition(i) Interest income

Interest income is recognised in Statement of profit
and loss using the effective interest method for all
financial instruments measured at amortised cost, debt
instruments measured at FVTOCI and debt instruments
designated at FVTPL. The ‘effective interest rate'' is
the rate that exactly discounts estimated future cash

payments or receipts through the expected life of the
financial instrument.

(ii) Dividends

Dividends are recognised in Statement of profit
and loss only when the right to receive payment is
established, it is probable that the economic benefits
associated with the dividend will flow to the Company
and the amount of the dividend can be measured
reliably.

(iii) Sale of services (lease income)

Sale of services representing lease income for
vehicles arising out of operating lease is recognised
on a straight line basis over the term of the relevant
lease as per Ind AS 116.

d) Property, plant and equipment and capital work
in progress

Deemed cost option for first time adopter of Ind AS

Under the previous GAAP (Indian GAAP), the property,
plant and equipment were carried in the balance sheet
at cost less accumulated depreciation. The company
has elected to use the previous GAAP carrying
amount as the deemed cost as at the date of transition,
viz.,1 April 2018

Presentation

Property, plant and equipment is stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the
cost of replacing part of the plant and equipment and
borrowing costs of a qualifying asset, if the recognition
criteria are met. When significant parts of plant and
equipment are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives. All other repair and maintenance
costs are recognised in profit or loss as incurred.

Advances paid towards the acquisition of tangible
assets outstanding at each balance sheet date, are
disclosed as capital advances under long term loans
and advances and the cost of the tangible assets not
ready for their intended use before such date, are
disclosed as capital work in progress.

Machinery spares/ insurance spares that can be issued
only in connection with an item of fixed assets and
their issue is expected to be irregular are capitalised.
Replacement of such spares is charged to revenue.
Other spares are charged as revenue expenditure as
and when consumed.

Derecognition

Gains or losses arising from derecognition of
property, plant and equipment are measured as the
difference between the net disposal proceeds and
the carrying amount of the asset and are recognized
in the statement of profit and loss when the asset is
derecognized.

e) Depreciation on property, plant and
equipment

Depreciation is the systematic allocation of the
depreciable amount of an asset over its useful life
on a straight line method. The depreciable amount
for assets is the cost of an asset, or other amount
substituted for cost, less its residual value.

Depreciation is provided on straight line method,
over the useful lives specified in Schedule II to the
Companies Act, 2013.

Depreciation for PPE on additions is calculated on pro¬
rata basis from the date of such additions. For deletion/
disposals, the depreciation is calculated on pro-rata
basis up to the date on which such assets have been
discarded/ sold.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

f) Leases

The Company has elected not to apply the requirements
of Ind AS 116 Leases to short term leases of all assets
that have a lease term of 12 months or less and leases
for which the underlying asset is of low value. The
lease payments associated with these leases are
recognised as an expense on a straight-line basis over
the lease term.

As a lessee

a) Initial measurement

Lease liability is initially recognised and measured
at an amount equal to the present value of minimum
lease payments during the lease term that are not yet
paid. Right-of-use asset is recognized and measured
at cost, consisting of initial measurement of lease
liability plus any lease payments made to the lessor
at or before the commencement date less any lease
incentives received, initial estimate of restoration costs
and any initial direct costs incurred by the lessee.

b) Subsequent measurement

The lease liability is measured in subsequent periods
using the effective interest rate method. Right-of-use
asset is depreciated in accordance with requirements
in Ind AS 16, Property, Plant and equipment.

As a lessor

At the inception of the lease the Company classifies
each of its leases as either an operating lease or
a finance lease. The Company recognises lease
payments received under operating leases as income
on a straight-line basis over the lease term. In case
of a finance lease, finance income is recognised over
the lease term based on a pattern reflecting a constant
periodic rate of return on the lessor''s net investment
in the lease.

g) Financial Instruments

Financial assets and financial liabilities are recognised
when an entity becomes a party to the contractual
provisions of the instruments.

Financial assetsInitial recognition and measurement

All financial assets are recognised initially at fair value.
However, 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 are also added to the cost of the financial asset.
Purchases or sales of financial assets that require
delivery of assets within a time frame established by
regulation or convention in the market place (regular
way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell the
asset.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified on the basis of their contractual
cash flow characteristics and the entity''s business
model of managing them.

Financial assets are classified into the following
categories:

• Financial instruments other than equity instruments
at amortised cost

• Financial instruments other than equity instruments
at fair value through other comprehensive income
(FVTOCI)

• Financial instruments other than equity
instruments, derivatives and equity instruments at
fair value through profit or loss (FVTPL)

• Equity instruments measured at fair value through
other comprehensive income (FVTOCI)

Financial instruments other than equity instruments at
amortised cost

The Company classifies a financial instruments other
than equity instruments as at 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.

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
profit or loss. The losses arising from impairment are
recognised in the profit or loss.

Financial instruments other than equity instruments at
FVTOCI

The Company classifies a financial instrument other
than equity 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.

Financial instruments other than equity instruments
included within the FVTOCI category are measured
as at each reporting date at fair value. Fair value
movements are recognized in the other comprehensive
income (OCI). However, the Company recognizes
finance income, impairment losses and reversals and
foreign exchange gain or loss in the profit and loss
statement. On derecognition of the asset, cumulative
gain or loss previously recognised in OCI is reclassified
from the equity to profit and loss. Interest earned whilst
holding FVTOCI debt instrument is reported as interest
income using the EIR method.

Financial instruments other than equity instruments at
FVTPL

The Company classifies all financial instruments other
than equity instruments, which do not meet the criteria
for categorization as at amortized cost or as FVTOCI,
as at FVTPL.

Financial instruments other than equity instruments
included within the FVTPL category are measured at
fair value with all changes recognized in the profit and
loss.

Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are
held for trading are classified as at FVTPL. Where the
Company makes an irrevocable election of classifying
the equity instruments at FVTOCI, it recognises all
subsequent changes in the fair value in OCI, without
any recycling of the amounts from OCI to profit and
loss, even on sale of such investments.

Equity instruments included within the FVTPL category
are measured at fair value with all changes recognized
in the profit and loss.

Financial assets are measured at FVTPL except for
those financial assets whose contractual terms give
rise to cash flows on specified dates that represents
SPPI, are measured as detailed below depending on
the business model:

Derecognition

A financial asset is primarily derecognised when:

• The rights to receive cash flows from the asset
have expired, or

• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full

without material delay to a third party under 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.

When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Company
continues to recognise the transferred asset to the
extent of the Company''s continuing involvement. In
that case, the Company also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights
and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

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 on the following
financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans,
debt securities, deposits, receivables and bank
balance.

b) Financial assets that are debt instruments and are
measured at FVTOCI

c) Trade receivables or any contractual right to
receive cash or another financial asset that result
from transactions that are within the scope of Ind
AS 115.

The Company follows ‘simplified approach'' for
recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables;
and

• All lease receivables resulting from transactions
within the scope of Ind AS 116

The application of simplified approach does not require
the Company to track changes in credit risk. Rather,
it recognises impairment loss allowance based on
lifetime Expected Credit Loss (ECL) at each reporting
date, right from its initial recognition.

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase in
the credit risk since initial recognition. If credit risk has
not increased significantly, 12 months ECL is used
to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance
based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected
life of a financial instrument. The 12 months ECL is a
portion of the lifetime ECL which results from default
events that are possible within 12 months after the
reporting date.

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 considers all contractual terms of the
financial instrument (including prepayment, extension,
call and similar options) over the expected life of the
financial instrument and Cash flows from the sale of
collateral held or other credit enhancements that are
integral to the contractual terms.

ECL allowance (or reversal) recognized during the
period is recognized as income/ expense in the
statement of profit and loss. This amount is reflected
under the head ‘other expenses'' in the profit and loss.
The balance sheet presentation of ECL for various
financial instruments is described below:

• Financial assets measured as at amortised
cost, contractual revenue receivables and lease
receivables: ECL is presented as an allowance,
which reduces the net carrying amount. Until the
asset meets write-off criteria, the Company does
not reduce impairment allowance from the gross
carrying amount.

• Financial instruments other than equity instruments
measured at FVTOCI: Since financial assets

are already reflected at fair value, impairment
allowance is not further reduced from its value.
Rather, ECL amount is presented as ‘accumulated
impairment amount'' in the OCI.

For assessing increase in credit risk and impairment
loss, the company combines financial instruments on
the basis of shared credit risk characteristics with the
objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be
identified on a timely basis.

For impairment purposes, significant financial assets
are tested on individual basis at each reporting date.
Other financial assets are assessed collectively in
groups that share similar credit risk characteristics.
Accordingly, the impairment testing is done on the
following basis:

Name of the financial asset Impairment Testing

Methodology

Financial liabilitiesInitial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at FVTPL and as at amortised
cost.

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 as finance costs in the
statement of profit and loss.

All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction
costs.

The Company''s financial liabilities include trade and
other payables, loans and borrowings.

The measurement of financial liabilities depends on
their classification, as described below:

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities
held for trading and financial liabilities designated upon
initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading, if
they are incurred for the purpose of repurchasing in
the near term. This category also includes derivative
financial instruments entered into by the Company that
are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109. Separated
embedded derivatives are also classified as held
for trading unless they are designated as effective
hedging instruments.

For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk
are recognized in OCI. These gains/ loss are not
subsequently transferred to profit and loss. However,
the company may transfer the cumulative gain or loss
within equity. All other changes in fair value of such
liability are recognised in the statement of profit or loss.
The company has not designated any financial liability
as at fair value through profit and loss.

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are
derecognised as well as through the EIR amortisation
process.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference in the respective carrying amounts is
recognised in the statement of profit or loss.

Reclassification of financial assets

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments and
financial liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is
a change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent. The Company''s senior management
determines change in the business model as a result
of external or internal changes which are significant to
the Company''s operations. Such changes are evident
to external parties. A change in the business model
occurs when the Company either begins or ceases to
perform an activity that is significant to its operations. If
the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification
date which is the first day of the immediately next
reporting period following the change in business
model. The Company does not restate any previously
recognised gains, losses (including impairment gains
or losses) or interest.

The following table shows various reclassification and
how they are accounted for:

Borrowing cost include interest computed using
Effective Interest Rate method, amortisation of
ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the interest
cost.

Borrowing costs that are directly attributable to the
acquisition, construction, production of a qualifying
asset are capitalised as part of the cost of that asset
which takes substantial period of time to get ready
for its intended use. All other borrowings costs are
expensed in the period in which they occur.

Interest income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation. All other borrowing costs are
recognised in the statement of profit and loss in the
period in which they are incurred.

I. TaxesCurrent income tax

Current income tax assets and liabilities are measured
at the amount expected to be recovered from 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 reporting date
in the countries where the Company operates and
generates taxable income.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Current tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred tax

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

Deferred tax liabilities are recognised for all taxable
temporary differences.

Deferred tax assets are recognised to the extent that it
is probable that taxable profit will be available against
which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax
losses can be utilised. Where there is deferred tax
assets arising from carry forward of unused tax losses
and unused tax created, they are recognised to the
extent of deferred tax liability.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised
to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

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

j. Retirement and other employee benefitsShort-term employee benefits

A liability is recognised for short-term employee benefit
in the period the related service is rendered at the
undiscounted amount of the benefits expected to be
paid in exchange for that service.

Defined contribution plans

Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company has no
obligation, other than the contribution payable to the
provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense,
when an employee renders the related service. If
the contribution payable to the scheme for service
received before the balance sheet date exceeds the
contribution already paid, the deficit payable to the
scheme is recognized as a liability after deducting
the contribution already paid. If the contribution
already paid exceeds the contribution due for services

received before the balance sheet date, then excess
is recognized as an asset to the extent that the pre¬
payment will lead to, for example, a reduction in future
payment or a cash refund.

Defined benefit plans

The Company operates a defined benefit gratuity plan
in India, which requires contributions to be made to a
separately administered fund. The cost of providing
benefits under the defined benefit plan is determined
using the projected unit credit method.

Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined
benefit liability), are recognised immediately in the
balance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.

Compensated absences

The Company has a policy on compensated absences
which are both accumulating and non-accumulating
in nature. The expected cost of accumulating
compensated absences is determined by actuarial
valuation performed by an independent actuary at
each balance sheet date using projected unit credit
method on the additional amount expected to be paid/
availed as a result of the unused entitlement that has
accumulated at the balance sheet date. Expense
on non-accumulating compensated absences is
recognized in the period in which the absences occur.

k. Impairment of non financial assets

The Company assesses, at each reporting date,
whether there is an indication that an asset may be
impaired. If any indication exists, or when annual
impairment testing for an asset is required, the
Company estimates the asset''s recoverable amount.
An asset''s recoverable amount is the higher of an
asset''s or cash-generating unit''s (CGU) fair value less
costs of disposal and its value in use. Recoverable
amount is determined for an individual asset, unless
the asset does not generate cash inflows that are
largely independent of those from other assets or
groups of assets. When the carrying amount of an
asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its
recoverable amount.

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Mar 31, 2014

I. INCOME RECOGNITION:

(a) Income from hire purchase contracts is reckoned on a progressive basis (diminishing return method) over the period of the contract on time basis.

(b) Lease Rental Income is recognized on the basis of implicit rate of return as per the Guidance Note on Accounting for Leases issued by the ICAI.

Income from sale of leased assets, after completion of the lease period, is recognized on Cash basis.

(c) Interest accrued on Investments and Deposits are accounted for on accrual basis.

(d) Delayed payment charges are accounted on receipt basis.

II. FIXED ASSETS:

(a) Fixed Assets are stated at cost.

(b) Fixed Assets are depreciated on straight-line method in accordance with Schedule XIV of the Companies Act, 1956.

Depreciation has been charged proportionately for the period the Assets had been in use.

The cost of all the leased assets are amortized fully during lease period and lease equalization charge is accordingly provided.

III. INVESTMENTS:

Investments are classified as long term investments and are stated at cost. However provision has been made for diminution, wherever the decline in the value is other than temporary, in accordance with Accounting Standard 13

IV. RETIREMENT BENEFITS:

The Company''s Liability towards Gratuity to the employees is provided on the basis of an actuarial valuation at the year end.

V. TAXATION

a) Provision for Income tax for the Current year is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961.

b) Deferred Tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to consideration of prudence.

The Status and Break up as of 31.03.2014 is given below

(Rs.in Lakhs)

DESCRIPTION ASSET

Timing Difference in Depreciable Asset 31.60

Timing difference in Provision against NPA 0.74

Timing Difference in Provision for Bonus 1.36

Timing Difference in Provision for Gratuity & Leave Encashment 4.84

Total 38.54

Net Deferred Tax Asset 38.54

VI. SEGMENT REPORT

The Company has adopted Accounting Standard 17 "Segment Reporting" issued by The Institute of Chartered Accountants of India, which requires disclosure of financial and descriptive information about the Company''s reportable operating segments. The operating segments reported below are the segments of the Company for which separate financial information is available.

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Mar 31, 2012

I. INCOME RECOGNITION:

(a) Income from hire purchase contracts is reckoned on a progressive basis (diminishing return method) over the period of the contract on time basis.

(b) Lease Rental Income is recognized on the basis of implicit rate of return as per the Guidance Note on Accounting for Leases issued by the ICAI.

Income from sale of leased assets, after completion of the lease period, is recognized on Cash basis.

(c) Interest accrued on Investments and Deposits are accounted for on accrual basis.

(d) Delayed payment charges are accounted on receipt basis.

II. FIXED ASSETS:

(a) Fixed Assets are stated at cost.

(b) Fixed Assets are depreciated on straight-line method in accordance with Schedule XIV of the Companies Act, 1956.

Depreciation has been charged proportionately for the period the Assets had been in use.

The cost of all the leased assets are amortized fully during lease period and lease equalization charge is accordingly provided.

III. INVESTMENTS:

Investments are classified as long term investments and are stated at cost. However provision has been made for diminution, wherever the decline in the value is other than temporary, in accordance with Accounting Standard 13.

IV. RETIREMENT BENEFITS:

The Company's Liability towards Gratuity to the employees is provided on the basis of an actuarial valuation at the year end.

V. TAXATION

a) Provision for Income tax for the Current year is made for the amount of tax payable in respect of taxable income for the year under Income Tax Act, 1961.

b) Deferred Tax is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to consideration of prudence.

VI. SEGMENT REPORT

The Company has adopted Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, which requires disclosure of financial and descriptive information about the Company's reportable operating segments. The operating segments reported below are the segments of the Company for which separate financial information is available.

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Mar 31, 2011

I. INCOME RECOGNITION:

(a) Income from hire purchase contracts is reckoned on a progressive basis (diminishing return method) over the period of the contract on time basis.

(b) Lease Rental Income is recognized on the basis of implicit rate of return as per the Guidance Note on Accounting for Leases issued by the ICAI.

Income from sale of leased assets, after completion of the lease period, is recognized on Cash basis.

(c) Interest accrued on Investments and Deposits are accounted for on accrual basis.

(d) Delayed payment charges are accounted on receipt basis.

II.FIXEDASSETS:

(a) Fixed Assets are stated at cost.

(b) Fixed Assets are depreciated on straight-line method in accordance with Schedule XIV of the Companies Act, 1956.

Depreciation has been charged proportionately for the period the Assets had been in use. The cost of all the leased assets are amortized fully during lease period and lease equalization charge is accordingly provided.

III.INVESTMENTS:

Investments are classified as long as term investments and are stated at cost. However provision has been made for diminution, wherever the decline in the value is other than temporary, in accordance with Accounting Standard 13

IV.RETIREMENT BENEFITS:

The Company's Liability towards Gratuity to the employees is provided on the basis of an actuarial valuation at the year end. V. TAXATION

a) Provision for Income tax for the Current year is made for the amount of tax payable in respect of taxable income for the year under I ncome Tax Act, 1961.

b) Deferred Tax is recognized on timing differences being the difference between taxable fncome and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, subject to consideration of prudence.

VI. SEGMENT REPORT

The Company has adopted Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, which requires disclosure of financial and descriptive information about the Company's reportable operating segments. The operating segments reported below are the segments of the Company for which separate financial information is available.

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Mar 31, 2010

I. INCOME RECOGNITION:

(a) Income from hire purchase contracts is reckoned on a progressive basis (diminishing return method) overthe period of the contract on time basis.

(b) Lease Rental Income is recognized on the basis of implicit rate of return as per the Guidance Note on Accounting for Leases issued by the ICAI.

Income from sale of leased assets, after completion of the lease period, is recognized on Cash basis.

(c) Interest accrued on Investments and Deposits are accounted for on accrual basis.

(d) Delayed payment charges are accounted on receipt basis. II.FIXED ASSETS:

(a) Fixed Assets are stated at cost.

(b) Fixed Assets are depreciated on straight-line method in accordance with Schedule XIV of the Companies Act, 1956.

Depreciation has been charged proportionately for the period the Assets had been in use. The cost of all the leased assets are amortized fully during lease period and lease equalization charge is accordingly provided.

III. INVESTMENTS:

Investments are classified as long term investments and are stated at cost. However provision has been made for diminution, wherever the decline in the value is other than temporary, in accordance with Accounting Standard 13 IV.RETIREMENT BENEFITS:

The Companys Liability towards Gratuity to the employees is provided on the basis of an actuarial valuation at the year end.

V. TAXATION

a) Provision for Income tax for the Current year is made for the amount of tax payable in respect of taxable income for the year under Income TaxAct, 1961.

VI. SEGMENT REPORT

The Company has adopted Accounting Standard 17 "Segment Reportingth issued by the Institute of Chartered Accountants of India, which requires disclosure of financial and descriptive information about the Companys reportable operating segments. The operating segments reported below are the segments of the Company for which separate financial information is available.