Accounting Policies of Fynx Capital Ltd. Company

Mar 31, 2025

1 Corporate information

Rajath Finance Limited, was incorporated or. August 17. 2000 with the Registrar o( Companies (RoC), Niaharaslttra. Mumbai. Subsequently, as on December 13, 1984 The Company was registered as a Non-Banking Financial Company without accepting public deposits, as defined under Section 45-IA of the Reserve Bank of fitdia Act, 19.31. The Company is principally engaged in lending activities and provides loans to small and medium enterprises for working capital and growth, [wo wheelers loans, loans against property, personal loans and financing of various micro enterprises.

The registered office o£ the Company is located ai 208-215, Slat Plaza, PhukhhabChowk, RAjkol 380001. The Company is a public limited company.

2 Significant accounting policies and critical accounting estimate and judgments

2.1 Basis of preparation, measurement and significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1.1 Basis of Preparation of financial Statements:

(i) Compliance with Ind AS

The financial statements have been prepared in accordance with Indian Accounting Standards (hid AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under Section 133 of the Companies Act, 2013 (the Act) along with other relevant provisions of the Act and the Master Direction - NonBunking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (''die NBFC Master Directions ) issued by Reserve Bank of India (RBI). The financial statements have been prepared on a going concern basis. The Company uses accrual basis of accounting except in case of significant uncertainties.

For all periods up to and including the year ended March 31, 2018, die Company had prepared its financial statements in accordance with accounting standards notified under Section 133 of die Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016 and the NBFC Master Directions (hereinafter referred as ''Previous GAAP) These financial statements for the year ended March 31, 2019 are the first financial statements of the Company, which has been prepared in accordance with Ind AS.

(ii) Historical cost convention

The financial statements have been prepared under die historical cost convention, as modified by

(i) certain financial assets and financial liabilities at fair value,

(ii) assets held for sale measured at fair value less cost to sell, and (iil) defined benefit plans - plan assets that are measured at fair value

(iii) Order of liquidity

The Company is covered in the definition of Non-Banking Financial Company as defined in Companies (Indian Accounting Standards) (Amendment} Rules, 2016. Pursuant to Ind AS \ -¹ Presentation of Financial Statements'' and amendment to Division HI of Schedule III to die Companies Act, 2013 dated October 11, 2018, die Company presents its balance sheet in the order of liquidity. A maturity analysis of recovery or settlement of assets and liabilities within 12 months alter the reporting date and more than 12 mondis after the reporting date is presented in Note No. 48 (i).

(iv) Compliance with RBI Master Direction ... ,

The Company complies in all material respects, with the prudential norms relating to income recognition, asset classification and provisioning for bad and doubdul debts and other matters, specified in the master directions issued by the Reserve Bank of India (‘RBF) in terms of Disclosures as required by the Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 issued by tire Reserve Bank of India ("RBI") vide their Notification No. RBI/DoR/2023 24/106 DoR.FIN.REC.No.45/0310.119/2023-24 dated October 19, 2023 (the "Notification") updated on timely basis (the "RBI Directions") as applicable to the Company. Indian Accounting Standards and Guidance Notes issued by the Institute of Chartered Accountants of India (referred to in these Directions as ICAI ) shall be followed insofar as they are not inconsistent with any of these Directions.

(v) Use of Estimates ... . ,

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

Revenue Recognition: _§ .

Revenue is measured at fair value of the consideration received or receivable Revenue is recognized when (or as) the Company satisfies a performance obligation by transferring a promised service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. When (or as) a performance obligation is satisfied, the Company recognizes as revenue the amount of the service rendered (excluding estimates of variable consideration) that is allocated to that performance obligation.

The Company applies the five-step approach (oi recognition of revenue .

1. Identification of contract(s) with customers;

2. Identification of die separate performance obligations in the contract;

3. Determination of transaction pnee;

4. Allocation of transaction pnee to the separate performance obligations, and 3. Recognition of revenue when (or as) each performance obligation is satisfied.

(i) Interest income

The Company recognizes interest income using Effective Interest Rate (EIR) on all financial assets subsequently measured at fair value through profit or loss (F TPLj is recognized at the contractual rate of interest. EIR is calculated by considering all costs and incomes attributable to acquisition of a financial asset or assumption of a financial liability and it represents a rate that exactly discounts estimated future cash payments/receipts through the expected life of the financial asset/financial liability to the gioss carry ing amount of a financial asset or to the amortized cost of a financial liability.

The Company recognizes interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. In case of credit-impaired financial assets regarded as ''stage 3'', the Company recognizes interest income on the amortized cost net of impairment loss of the financial asset at EIR. If the financial asset is no longer credit-unpaired, the Company reverts to calculating interest income on a gross basis.

Delayed payment interest (penal interest) levied on customers for delay in repayments/non payment of contractual cashflows is recognized on realization.

Interest income on fixed deposits is recognized as it accrues on a time proportion basis taking into account the amount outstanding

(ii) Loan processing fees and other operating income

Fees and commission incomes and expenses Lhat are integral to the effective interest rate on a financial asset or liability are included in the effective interest rate. Fees and commission that are not integral to the effective interest rate are recognized on accrual basis over the life of the loan. Other operating income i.e. Foreclosure, Bounce Charges and Loan Re-schedulement Charges are accounted on cash basis.

(Hi) Income from investments

Profit / (Loss) earned from sale of investments is recognized on traded^gfaw*6tf off expenses incurred on sale. The cost of investment is computed based on weighted average

basis.

(iv) Dividend income

Dividend income is recognized in the statement of profit or loss on the date that the Company''s right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of dividend can be reliably measured. This is generally when the shareholders approve the dividend.

Foreign currency translation:

(i) Functional and presentation currency''

1 terns included in financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (INR), which is functional and presentation currency of the Company.

(ii) Translation and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement oi such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates ate generally recognized in profit or loss.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the tair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equity instruments held at fair value through profit or loss are recognized in profit or loss as part of the fair value gam or loss and translation differences on non-monetary assets such as equity investments classified as FVOCI are recognized in other comprehensive income.

Financial instruments:

Initial recognition and measurement

Financial assets and financial liabilities ate recognized when the entity becomes a party to the contractual provisions of the instrument. Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Company commits to purchase or sell the asset.

At initial recognition, the Company measures a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in profit or loss. Immediately after initial recognition, an expected credit loss allowance (ECL) is recognized for financial assets measured at amortized cost and investments in debt instruments measured at FVOCI, which results in an accounting loss being recognized in profit or loss when an asset is newly originated.

When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, the entity recognizes the difference as follows:

a) When the fair value is evidenced by a quoted price in an active market tor an identical asset or (lability (be. a Level 1 input) or based on a valuation technique that uses only data from observable markets, the difference is recognized as a gain or loss.

b) In all other cases, the difference is deferred and the timing of recognition of deferred day one profit or loss is determined individually. It is either amortized over the life of the instrument, deferred until the instrument''s fair value can be determined using market observable inputs, or realized through settlement.

When the Company revises the estimates of future cash flows, the carrying amount of the respective financial assets or financial liability is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are recognized in profit or loss.

Financial assets:

(i) Classification and subsequent measurement

The Company has applied Ind AS 109 - "Financial Instruments" and classifies its financial assets in the following measurement categories:

- Fair value through profit or loss (FVTPL);

-Fair value through other comprehensive income (FVOCI); or

- Amortized cost.

The classification requirements for debt and equity instruments are described below:

Debt instruments

Debt instruments are those instruments that meet the definition of a financial liability from the issuer''s perspective, such as loans, government and corporate bonds and trade receivables.

Classification and subsequent measurement of debt instruments depend on:

(1) the Company''s business model for managing the asset; and

(ii) the cash flow characteristics of the asset.

Based on these factors, the Company classifies its debt instruments into one of the following three measurement categories:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest (''SPPI''), and that are not designated at FVPL, are measured at amortized cost. The carrying amount of these assets is adjusted by any expected credit loss allowance recognized and measured. Interest income from these financial assets is recognized using the effective interest rate method.

Fair value through other comprehensive income: Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets'' cash flows represent solely payments of principal and interest, and that are not designated at FVPL, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through CXH, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses on the instrument''s amortized Cost which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss. Interest income from these financial assets is included in ''Interest income'' using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOQ are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss in the period in which it arises, unless it arises from debt instruments that were designated at fair value or which are not held for trading. Interest income from these financial assets is included in ''Interest income'' using the effective interest rate method.

Fan value option for financial assets: Die Company may also irrevocably designate financial assets at fair value through profit or loss if doing so significantly reduces or eliminates an accounting mismatch created by assets and liabilities being measured on different bases.

Business model: The business model reflects hem- the Company manages the assets in order fo generate cash flows That is, whether the Company''s objective is solelv to collect the conn-actual cash flows from the assets or is to coUect both the contractual cash flows and cash flows arising from tire sale of assets. If neither of these is applicable (e g. financial assets are held for trading purposes), then the financial assets are classified as part of ''other'' business model and measured at FVPL Factors considered by the Company in determining the business model for a Company of assets include past experience on how the cash flows for these assets were collected, how the asset’s performance is evaluated and reported to key management personnel, how risks are assessed and managed and how managers are compensated. Securities held for trading are held principally for the purpose of selling mlthe near term or are part of a portfolio of financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking. These securities are classified in the ''other'' business model and measured at FVPL.

SPPI: Where the business model Is to hold assets to collect contractual cash flows or to collect contractual Cash flows and sell, the Company assesses whether the financial instruments cash flows represent solely payments of principal and interest (the SPPI test''). In making this assessment, the Company considers whether the contractual cash flows are consistent with a basic lending arrangement se. mterest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit marvin that a consistent with a baste lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement the

related financial asset is classified and measured at fair value through profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Re-classification: The Company reclassifies debt investments when and only when its business model for managing those assets changes- The reclassification takes place from the start of the first reporting period following the change. Such changes are expected to be very infrequent and none occurred during the period.

Equity instruments:

Equity instruments are instruments that meet the definition of equity from the issuer''s perspective; that is, instruments that do not contain a contractual obligation to pav and that evidence a residual interest in the issuer''s net assets. ^{r 1}

The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments m other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Changes m the fair value of financial assets at fair value through profit or loss are recognized in net gain/loss on fair value changes in the statement of profit or loss. Impairment

losses (and reversal of impairment losses) on equity investments measured at FVOC1 are not reported separately from other changes in fair value.

Gains and losses on equity investments at FVPL are included in the statement of profit or loss.

(lij Impairment

ECL are recognized for financial assets held under amortized cost, The Company follows ''simplified approach'' for recognition of impairment loss allowance on loans which contain a financing component The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss cillowance based on lifetime ECls at each reporting date, right from its initial recognition.

(d) Measurement of ECL

The assessment of credit risk and estimation of ECL are unbiased and probability weighted. It incorporates all information that is relevant including information about past events, current conditions and reasonable forecasts of future events and economic conditions at the reporting date. In addition, tire estimation of ECL takes into account the time value ot money. Forward looking economic scenarios determined with reference to external forecasts of economic parameters that have demonstrated a linkage to the performance of our portfolios over a period of time have been applied to determine impact of macro economic factors.

The Company has calculated ECL using three main components: a probability of default (PD), a loss given default (LGD) and the exposure at default (EAD). ECL is calculated by

multipit mg the PD, LCD and EAD and adjusted for time value of money using a rate which is a reasonable approximation of EIR.

- Determination of PD is covered above for each stages of ECL.

- EAD represents the expected balance at default, taking into account the repayment of principal and interest from the Balance Sheet date to the date of default together with am-

expected drawdowns of committed facilities. ° ’

- LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realized and the time value of money.

(iii) Modification of loans

The Company sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Company assesses whether or not die new terms are substantially different to the original terms. The Company does this by considering, among others, the following factors:

-If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay.

-V\ hether any substantial new terms are introduced, such as a profit share/equity-based return that substantially affects the risk profile of the loan -Significant extension of the loan term when the borrower is not in financial difficulty.

-Significant change in the interest rate,

-Change in the currency the loan is denominated in.

-Insertion of collateral, other security or credit enhancements that significandy affect the credit risk associated with the loan.

If the terms are substantially different, the Company de-recognizes the original financial asset and recognizes a ''new'' asset at fair value and recalculates a new effective interest rate for the asset The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of etermmmg whether a significant increase in credit risk has occurred. However, the Company also assesses whether the new financial asset recognized is deemed to be credit-tmpaired at initial recognition, especially in circumstances where the renegotiation was driven by die debtor being unable lo make the originally agreed payments. Differences in the carrying amount are also recognized in profit or loss as a gain or loss on derecognition.

If the terms are not substantially different the renegotiation or modification does not result in derecognition, and the Company recalculates the gross carrying amount based on the revised cash flows of the financial asset and recognizes a modification gain or loss in the statement of profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original effectpiialfif|st rate (or credit-adjusted effective mterest rate for purchased or originated credit-impaired financial assets).

(iv) Derecognition other than on a modification

Financial assets, or a portion thereof, are derecognized when the contractual rights to receive the cash flows from the assets have expired, or when they have been transferred and either (i) the Company transfers substantially all the risks and rewards of ownership, or (ii) the Company neither transfers nor retains substantially all the risks and rewards of ownership and the Company has not retained control The Company directly reduces the gross carrying amount of a financial asset when there is no reasonable expectation of recovering a financial asset in its entirety or a portion thereof.

The Company enters into transactions where it retains the contractual rights to receive cash flows from assets but assumes a contractual obligation to pay those cash flows to other entities and transfers substantially all of the risks and rewards. These transactions are accounted for as ''pass through'' transfers that result in derecognition if the Company:

(i) Has no obligation to make payments unless it collects equivalent amounts from the assets;

(ii) Is prohibited from selling or pledging the assets; and

(iii) Has an obligation to remit any cash it collects from the assets without material delay.

Collateral (shares and bonds) furnished by the Company under standard repurchase agreements and securities lending and borrowing transactions are not de-recognized because the Company retains substantially all the risks and rewards on the basis of the predetermined repurchase price, and the criteria for derecognition are therefore not met. This also applies to certain securitization transactions in which the Company retains a subordinated residua/ interest.

Financial Liabilities;

(i) Classification and subsequent measurement

In both the current and prior period, financial liabilities are classified as subsequently measured at amortized cost, except for:

(a) Financial liabilities at fair value through profit or loss: this classification is applied to derivatives, financial liabilities held for trading and other financial liabilities designated as such at initial recognition. Gains or kisses on financial liabilities designated at fair value through profit or loss are presented partially in other comprehensive income (the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, which is determined as the amount that is not attributable to changes in market conditions that give rise to market risk) and partially profit or loss (the remaining amount of change in the fair value of the liability). Dus is unless such a presentation would create, or enlarge, an accounting mismatch, in which case the gains and losses attributable to changes in the credit risk of the liability are also presented in profit or loss; (b) Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition, whereby a financial liability is recognized for the consideration received for the transfer. In subsequent periods, the Company recognizes any expense incurred on the financial liability; and (c) Financial guarantee contracts and loan commitments.

(ii) Derecognition

Financial liabilities are derecognized when they are extinguished i.e. when the obligation specified in the contract is discharged, cancelled or expires).

The exchange between the Company and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present value of the cash flow''s under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new'' conversion features attached to the instrument and change in covenants are also taken into consideration If an exchange of debt instruments ot modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortized over the remaining term of the modified liability.

Financial guarantee contracts and loan commitments:

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and others on behalf of customers to secure loans, overdraft* and other banking facilities.

Financial guarantee contracts are initially measured at fair value and subsequently measured at the higher of:

(a) The amount of the loss allowance; or

(b) The premium received on initial recognition less income recognized in accordance with the principles of Ind AS 115.

Loan commitments provided by the Company are measured as the amount of the loss allowance.

For loan commitments and financial guarantee contracts, the loss allowance is recognized as a provision. However, for contracts that include both a loan and an undrawn commitment and the Company cannot separately identify'' the expected credit losses on the undrawn commitment component from those on the loan component, the expected credit losses on the undrawn commitment are recognized together with the loss allowance foT the loan. To the extent that the combined expected credit losses exceed the gross carrying amount of the loan, the expected credit losses are recognized as a provision.

Segment Reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The power to assess the financial performance and position of the Company and make strategic decisions is vested in the executive director who has been identified as the chief operating derisions maker.

The Company is mainly engaged in the commercial finance business and all other activities revolve around the main business of the Company. Further, all activities are conducted w ithin India and as such there is no separate reportable segment as specified in Ind AS 108 on ''Operating Segment''.

income Tax:

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses,

Current Taxes

The current income tax charge is calculated on the basis of (he (ax laws enacted or substantively enacted at the end of the reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable income Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred Taxes

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses

Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries and associates and interest in joint arrangements where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority''. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary'' differences can be deducted. To determine the future taxable profits, reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax law is considered to determine the availability of the losses to offset against the future taxable profits. Recognition therefore involves judgement regarding the future financial performance of the particular legal entity or tax group in which the deferred tax asset has been recognized.

Off-setting financial instruments:

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Cash and cash equivalents :

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in liabilities in the balance sheet.

Property, plant and equipment:

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 01, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

Depreciation methods, estimated useful lives & residual value

Depreciation is calculated using the straight-line method to allocate their cost, net of their residua] values, over their estimated useful lives or, in the case of certain leased furniture, fittings and equipment, the shorter lease term as follows:

The estimated useful lives for the different types of assets are:

Asset	Useful Life (Years)
Furniture and fixtures	10 years
Office equipment	5 years
Computers	3 years
Vehicles	8 years
Buildings	60 years
Plant & machinery	8 years

The property, plant and equipment acquired under finance leases is depredated over the asset''s useful life or over the shorter of the asset''s useful life and the lease term if there is no reasonable certainty that the Company will obtain ownership at the end of the lease term.

The useful lives have been determined based on technical evaluation done by the management s expert which are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset.

The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds wlthcgrrying amount and are recognized in the statement of profit or loss.

Intangible assets:

Inem''gibfe assetsranMrecognized where it is probable that the future economic benefit attributable to the assets will flow to the Company and its cos, can be reliably measured.

development. The Company amortizes intangible assets on a straight-line basis over the useful lives of the assets commencing from the month m tshtch the asset is first put to use. The Company provides pro-rata depreciation from the day the asset is put to use.

The estimated useful lives for the different types of assets are;_______

rVssef _Useful Life (Years)___________

Computer software ^ years ______—--_--;-

C* transit (o fnd AS. the Company has elected carrying value of all of intangible assets recogfoWa^at April 1, 2017 measured as per the previous CAAP

and use that carrying values the deemed cost of intangible assets.

Borrowing Cost: .. , . , _ _.

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capit^red drag the P^^{od o}^'' is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessanly lake a substantial penod of time to get eady for their intended use or sato. Investment income earned on the temporary investment of specif,c borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred.

Provisions for restruchinng are recognized by the Company when it has developed a detailed formal plan for restructuring and has raised a valid expectation injjte aftattd Z the companytill carj out the Ltructurmg by starting to implement the plan or announcing «, main features fo those affected^

obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management''s best estimate of the expenditure required fo settle the present obligation at the ^

discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the rusks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

The measurement of provision for restructuring includes only direct expenditures arising from the restructuring, which are both necessarily entailed by the restructuring and no, associated with the ongoing activities of the company.

Employee benefits:

tLbiJities''for wages ancTsalaries. including non-monetary benefits that are expected fo be settled wholly within ,2 months after the end of the period in which ^ -p.oyees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

Earning Per Shares:

Ba^rrarn^s per^Pes”t^ calculated by dividing the profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus dement in equity shares issued during the year and excluding treasury shares if any (Note No.42).

32?22m the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and

costs associated with dilutive potential equity shares, and the weighted average number of additional equity shares that would have been outstanding assuming the conversion

of all dilutive potential equity shares.

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception of the

Lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is ot explicitly specified in an arrangement.

Xto classified V^the*inception date as a finance lease or an operating lease. A lease that transfers substantially Hi the risks and rewards incidental to ownership to the Company Classified as a finance lease. All other leases are classified as operating leases. Basis the above principle, all leases entered into by the Company as a lessee have been

classified as operating leases.

Lease payments under an operating lease is recognized on an accrual basis in the Statement of Profit and Loss.

Inventories

Inventory is related to shares and carried at cost

Afi''amoun^disclosed in the financial statements and notes have been rounded off to the nearest crores as per the requirements of Schedule III unless otherwise stated.

The preparation of⁸financial slateJen te requires the use of accounting estimates which, by definition, will seldom equal the actual rtsuteof ilCI judgement in applying the Company''s accounting policies. This note provides an overview of the areas that involved higher degree of j dg^- P ^ ,

whfch are more Liy to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed mkm*i*>n.about ea of

these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item m the financial statements.

The areas involving critical estimates or judgements are:

Th^mp^iTr^^i^s'' interest income/expense using the effective interest rate, Le, a rate that represents the best estimate of a constant rate of return over the «p«cted Ufe of foe Loans The effective interest method also accounted the effect of potentially different interest rates at various stages and other characteristics of the product Me yHe (''deluding prepayments and penalty interest and charges,. This estimation, by nature, requires an element of judgement regarding the expected behavior and Ufe

Impairment of financial assets using the expected credit loss method :

The measurement of impairment losses on loan assets and commitments, requires judgement, in estimating the amount and timing of future cash flows and recoverability of collateral values while determining the impairment losses and assessing a significant increase in credit risk.

The Company s Expected Credit Loss (ECL) calculation is the output of a complex model with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies Elements of the ECL model that are considered accounting judgements and estimates include:

- The Company''s criteria for assessing if there has been a significant increase in credit risk

- The segmentation of financial assets when their ECL is assessed on a collective basis

- Development of ECL model including the various formulae and the choice of inputs

- Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL model

- It has been the Company''s policy to regularly review its model in the context of actual loss experience and adjust when necessary.

Business model assessment:

Classification and measurement of financial assets depends on the results of the SPP1 test and the business model test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement considered by the Company in determining the business model including how the performance of the assets is evaluated and their performance measured, the risks that affect the performance of the assets and how these are managed and how the managers of the assets are compensated. The Company monitors financial assets that are derecognized prior to their maturity to understand the reason for their disposal and whether the reasons are consistent with the objective of the business for which the asset was held

Provisions and contingent liabilities:

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. The Company also discloses present obligations for which a reliable estimate cannot be made. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

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Mar 31, 2015

1. Basis of Accounting

The financial statements have prepared under historical cost convention on an accrual basis and comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956.

2. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

3. Fixed Assets and Depreciation

Fixed Assets are stated at historical cost less accumulated depreciation thereon..Depreciation has been provided as per straight line method and as per its useful life prescribed under Schedule II of the Companies Act, 2013.

4. Inventories

Inventories are stated at cost or net realizable value, whichever is lower.

5. Investments

All investments are for long term holding and are valued at cost.

6. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliable measured.

7. Taxes on Income

Provision for taxation comprises of Current Tax, and Deferred Tax. Current Tax provision has been made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred Tax is recognized for all the timing differences, subject to consideration of prudence, applying the tax rates that have been substantially enacted at the Balance Sheet date.

8. Provisions

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

9. Loan/sundry debtor/sundry creditor

Balance of Loan/sundry debtor/sundry creditor is subject to confirmation of parties.

10. Bank Balance

Bank balances are subject to reconciliation.

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Mar 31, 2014

1. Basis of Accounting

The financial statements have prepared under historical cost convention on an accrual basis and comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956.

2. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.

3. Fixed Assets and Depreciation

Fixed Assets are stated at historical cost less accumulated depreciation thereon..Depreciation has been provided as per straight line method and as per its useful life.

4. Inventories:

Inventories are stated at cost or net realizable value, whichever is lower.

5. Investments

All investments are for long term holding and are valued at cost.

6. Taxes on Income

Provision for taxation comprises of Current Tax, and Deferred Tax. Current Tax provision has been made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred Tax is recognized for all the timing differences, subject to consideration of prudence, applying the tax rates that have been substantially enacted at the Balance Sheet date.

7. Bank Balance

Bank balances are subject to reconciliation.

8. Loan/sundry debtor/sundry creditor

Balance of Loan/sundry debtor/sundry creditor is subject to confirmation of parties.

9. Provisions

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made.

10. Classification of Assets & Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) it is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;

(ii) It is held primarily for the purpose of being traded;

(iii) It is expected to be realized within twelve months after the reporting date; or

(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company''s normal operating cycle;

(ii) It is held primarily for the purpose of being traded;

(iii) It is due to be settled within twelve months after the reporting date; or

(iv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(e) All liabilities other than current liabilities shall be classified as non-current

Right, Preferences and Restriction attached to shares

Equity shares

The company has only one class of Equity having a par value Rs. 10.00 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

The Company had purchased 23,300 Nos. of UTI Master Gain. The same was misappropriated in transit. The Company had filed suit before the Hon''ble Civil Court, Rajkot. The same was disposed in favor of the Company and an execution application has also been filed, which is pending for disposal before the Hon''ble Civil Court, Rajkot.

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Mar 31, 2012

1. Basis of Accounting

The financial statements have prepared under historical cost convention on an accrual basis and comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956.

2. Income & Expenditure

The Company follows the accrual method of accounting as per the Companies Act, 1956 and complies with the Reserve Bank of India guidelines for Non Banking Financial Companies. The Accounts have been prepared on going concern basis.

3. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

4. Fixed Assets and Depreciation

Fixed Assets are stated at historical cost less accumulated depreciation thereon. Depreciation on assets is provided on straight line method at the rates prescribed under Schedule XVI of the Companies Act, 1956.

5. Investments:

All investments are for long term holding and are valued at cost.

6. Inventories

Inventories are stated at cost or market price which ever is lower.

7. Taxes on Income

Deferred tax asset is recognized, subject to the consideration of prudence, on timing difference, 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.

8. Misc. Expenditure

Misc. expenditures shall be amortized equally over a period of 5 years.

9. Previous year's figures

The figures have been rounded off to the nearest rupee. Previous year figures have been regrouped wherever found necessary to make it comparable.

10. Provisions

The company has provided adequate provision on Standard Asset and Non Performing Assets in accordance with the guidelines issued by the Reserve Bank of India.

11. Classification of Assets & Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as cither Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) it is expected lo be realized in, or is intended for sale or consumption in. the Company's normal operating cycle;

(ii) It is held primarily for the purpose of being traded:

(iii) It is expected to be realized within twelve months after the reporting date; or

(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the company's normal operating cycle;

(ii) It is held primarily for the purpose of being traded;

(iii) It is due to be settled within twelve months after the reporting date; or

fiv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

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Mar 31, 2010

The Account are prepared in accordance with accounting policies and principles generally accepted in India. The Company follows the accrual method of accounting as per the Companies Act, 1956 and complies with the Reserve Bank of India guidelines for Non Banking Financial Companies. The accounts have been prepared on going concern basis.

(a) Incomes:

Income is recognised on accrual basis.

(b) Expenditure:

The Expenses incurred by the Company are accounted for on accrual basis. Provision has been made for long for the expenses which can be determined with reasonable certainty.

(c) Investments:

All investments are for long term holding and are valued at cost.

(d) Fixed Assets:

Fixed Assets are accounted for in the books at cost including incidental charges, if any, less accumulated depreciation.

(e) Depreciation on Fixed Assets:

The Company provides depreciation on straight line method at the rates prescribed under Schedule XVI to the Companies Act, 1956 with reference to completed months of installation.

(f) Taxes On Income:

(i) Current Tax is determined as the amount of tax payable in respect of taxable income for the period. (II) Deferred tax is recognised .subject to the consideration of prudence, on timing difference , being the difference between taxable income & accounting income that originate in one period and are capable of reversal in one or more subsequent periods.