Accounting Policies of Indbank Merchant Banking Services Ltd. Company

Mar 31, 2018

Notes forming part of Standalone Financial Statements for the year ended 31 March 2018

Note 1 to 3

1. General Information

Indbank Merchant Banking Services Limited (''the Company'') is a listed Company incorporated in India. The address of its registered office and principal place of business are disclosed in the introduction to the annual report. The Company is engaged in Merchant Banking, Stock Broking, Depository Participant services and allied activities. The Company is a member of NSE (Equity, derivatives and Debt Segments), BSE (Equity) and registered with NSDL as a Depository Participant. It is also registered with Association of Mutual Funds of India (AMFI) for distribution of Mutual Fund products.

2. Application of new and revised Ind ASs

The company has applied all the Ind ASs notified by the MCA. There are no Ind AS that have not been applied by the company.

3. Significant accounting policies

3.1 Statement of compliance

The financial statements have been prepared in accordance with Ind ASs notified under section 133 of Companies Act , 2013 read with relevant rules specified thereunder.

Up to the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Company''s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Refer Note No.33 for the details of first-time adoption exemptions availed by the Company.

3.2 Basis of preparation and presentation

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

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly and

Level 3 inputs are unobservable inputs for the asset or liability.

The principal accounting policies are set out below.

3.3 Revenue recognition

3.3.1 Rendering of services

Revenue primarily comprises the following incomes:

1. Issue Management Fee and other Managerial Services - Considered on the completion of assignment.

2. Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars

3. Brokerages under stock broking operations - On completion of contracts

4. Annual Maintenance and Transaction charges under Depository Participant operations yearly and on completion of transactions respectively.

5. Interest on overdue lease rentals and hire purchase installments - Receipt basis

6. Dividend Income - When right to receive is established.

3.4 Employee benefits

3.4.1 Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon the completion of five years of service. The Company makes an annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company''s liability towards Gratuity is actuarially determined at the reporting date using the Project Unit Credit (PUC) method. Actuarial gains and losses on gratuity are recognized in Other Comprehensive Income as per Ind AS 19.

3.4.2 Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

3.4.3 Contribution to Provident Fund and Leave Encashment

The eligible employees of the Company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees'' salary, the contributions as specified under the Law are paid to the Provident Fund and Pension Fund to the provident fund authorities.

Leave Encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days unutilized leave at each reporting date. The actuarial gain or loss is recognized in the Statement of Profit and Loss as per Ind AS 19.

3.5 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

3.5.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

3.5.2 Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3.5.3 Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

3.6 Property, plant and equipment

Fixtures, plant and medical equipment are stated at cost less accumulated depreciation and accumulated impairment losses. All repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. Depreciation is recognized so as to write off the cost of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis."

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

3.7 Investment Property

Investment Properties are properties held to earn rentals and / or for capital appreciation. These are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16''s requirements for cost model.

An investment property is derecognized upon disposal or when it is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment property recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

3.8 Intangible assets

3.8.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

3.8.2 Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

3.8.3 Useful lives of intangible assets

Estimated useful lives of the intangible assets are as follows: - (No. of Years)

Computer Software 3

3.8.4 Deemed cost on transition to Ind AS

"For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

3.9 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

3.10 Provisions

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

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably."

3.11 Financial instruments

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

3.11.1 Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

3.11.2 Classification of financial assets

Bought out deals that meet the following conditions are subsequently measured at amortized cost:

- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Bought out deals that meet the following conditions are subsequently measured at fair value through other comprehensive income:

- the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Interest income is recognized in profit or loss for FVTOCI instruments. Other changes in the fair value of FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of ''Reserve for financial instruments through other comprehensive income''. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.

All other financial assets are subsequently measured at fair value at Profit or Loss.

3.11.3 Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognized on an effective interest basis for instruments other than those financial assets classified as at FVTPL. Interest income is recognized in profit or loss and is included in the Other income line item.

A financial asset is held for trading if:

- it has been acquired principally for the purpose of selling it in the near term; or

- on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

- it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.

The Company has equity investments in entities which not held for trading. The Company has accounted the investments at FVTPL. Dividends on these investments in equity instruments are recognized in profit or loss when the Company''s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognized in profit or loss are included in the "Other income” line item.

3.11.4 Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.

Debt instruments that do not meet the amortized cost criteria or FVTOCI criteria (see above) are measured at FVTPL. In addition, debt instruments that meet the amortized cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.

A financial asset that meets the amortized cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases. The Company has not designated any debt instrument as at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the "Other income” line item. Dividend on financial assets at FVTPL is recognized when the Company''s right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably."

3.11.5 Impairment of financial assets Depository Participant Receivables

The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortized cost, debt instruments at FVTOCI, lease receivables, trade receivables, other contractual rights to receive cash or other financial asset not designated as at FVTPL.

Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss 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 Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.

The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.

When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition.

For 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 11 and Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.

Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.

Stock Broking Receivables

The Company has obtained power of attorney from the clients to block or debit the securities available in their demat account, when there is delay in payment of dues from them. Hence, the Management has a policy to make provision for the difference between the value of security (Marked to Market as on the reporting date) and the amount receivable as at the end of the reporting date.

3.11.6 Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial asset.

3.11.7 Financial liabilities

All financial liabilities are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method.

3.11.7.1 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if:

- it has been incurred principally for the purpose of repurchasing it in the near term; or

- on initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

- it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability and is included in the “Other income” line item.

3.11.7.2 Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

3.12 First-time adoption - mandatory exceptions, optional exemptions

3.12.1 Overall principle

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

3.12.2 Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).

3.12.3 Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

3.12.4 Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

3.12.5 Deemed cost for property, plant and equipment, investment property, and intangible assets

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

3.13 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

3.13.1 Useful lives of property, plant and equipment

As described above, the Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting period.

3.13.2 Fair value measurements and valuation processes

Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes.

In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. The management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in ''Financial Instruments'' note.

3.13.3 Employee Benefits

The cost of defined benefit plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

3.13.4 Litigations

1. Income tax demands for various assessment years is contested by the company and are pending before various forums including Hon''ble High Court, Madras.

2. The Company has filed cases before various Courts for recovery of dues under discontinued fund based operations and are being pursued.

Stock Broking Client Receivables

The Company has obtained power of attorney from the clients to block or debit the securities available in their demat account, when there is delay in payment of dues from them. Hence, the Management has a policy to make provision for the difference between the value of security (Marked to Market as on the reporting date) and the amount receivable. This method of provisioning is more representative of the business activities than the Expected Credit Loss Model as prescribed under Ind AS 109._

Depository Participants

The dues from Depository Participant operations are mainly the Annual charges collected from clients for maintaining and transacting on their demat accounts. The dues over 90 days have already been provided 100% and the 90 days is the normal collection period. The dues less than 90 days are very less and amount to Rs. 3,45,020. The Management has taken a call not to provide on these balances using the Expected Credit Loss Model as the impact will be immaterial.

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Mar 31, 2016

The financial statements are prepared by following the going concern concept on historical cost convention using the accrual method of accounting, unless otherwise stated.

Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements, disclosure of contingent liabilities and reported amounts to revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt with in the period in which the results are known/materialize.

A Revenue recognition

(a) Issue Management Fee and fees for other managerial services - Considered on the completion of assignment.

(b) Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars.

(c) Brokerages under stock broking operations are accounted on completion of contract.

(d) Interest on overdue lease rentals and hire purchase Installments are accounted for on receipt basis.

(e) Dividend income is recognized when the right to receive is established.

B Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation & provision for impairment (if any). Assets given on lease (Contracted prior to December 1997) are further adjusted for the balance in lease adjustment account.

C Depreciation

a) On Assets other than given on lease

In respect of assets other than assets given on lease, the Company provides depreciation on the assets on the Straight Line Method (SLM) based on the useful life of the asset as prescribed in Schedule II to the Companies Act, 2013, on pro-rata basis. Software costs are amortized on SLM over a period of three years, from the year of acquisition.

b) On Assets given on lease under discontinuing operations

In respect of Assets given on lease under discontinuing operations, the Company provides depreciation on the assets in the WDV method on pro-rata basis, the month in which the assets are installed taken as full month. The cost of the Assets given on lease are amortized fully during the Lease period. (In accordance with the Guidance note on Accounting for Leases (revised) issued by the Institute of Chartered Accountants of India). The difference between the statutory depreciation and the annual lease charge is adjusted through the Lease Equalization, which is adjusted with the lease income.

D Investments

The investments held by the Company are all long-term investments. Long term investments are carried at cost less provision for diminution, other than temporary in nature. The Company has reckoned diminution in value of shares / debentures as permanent in nature by relying on market value of quoted shares and book value/ fair value whichever is higher in respect of unquoted shares.

E Employee Benefits

Short Term employee benefits/obligations are estimated and provided for.

a) Gratuity - The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company''s annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company''s liability towards Gratuity is actuarially determined at balance sheet date using the Project Unit Credit (PUC) method. Actuarial gains and losses are recognized in revenue.

b) Provident Fund - The eligible employees of the company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees salary, the contributions as specified under the Law are paid to the Provident fund and pension fund to the provident fund authorities.

c) Leave encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days un-utilized leave at each balance sheet date.

d) The retirement benefit liability to staff on deputation from Indian Bank is borne by Indian Bank except eligible Provident Fund contribution.

F Segment Reporting

The Segment Reporting is prepared in conformity with the accounting policies of the Company.

G Discontinuing Operations

The accounting policies adopted for discontinuing Operations are in line with the accounting policies adopted for Continuing Operations.

H Income Tax

Income Tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences arising out of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities resulting from change in tax rates is recognized in the income statement in the period of enactment of the change.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The expected rate of return is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the company''s policy for plan assets management. The retirement benefit liability in respect of staff on deputation from Indian Bank is borne by Indian Bank.

The company has contributed Rs.20.27 Lakhs (previous year- Rs.6.37 lakhs) towards Gratuity liability in the year 2015-16.

The transactions with Holding company and fellow subsidiaries has not been disclosed in view of exemption for State-controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state-controlled enterprises.

The related party transactions with key management personnel have been disclosed in Managerial Remuneration - Note 30 of Notes on Accounts.

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Mar 31, 2015

The financial statements are prepared by following the going concern concept on historical cost convention using the accrual method of accounting, unless otherwise stated.

Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements, disclosure of contingent liabilities and reported amounts to revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt with in the period in which the results are known/materialize.

A Revenue recognition

a) Issue Management Fee and fees for other managerial services - Considered on the completion of assignment.

b) Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars.

c) Brokerages under stock broking operations are accounted on completion of contract.

d) Interest on overdue lease rentals and hire purchase installments are accounted for on receipt basis.

e) Dividend income is recognized when the right to receive is established.

B Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation & provision for impairment (if any). Assets given on lease

(Contracted prior to December 1997) are further adjusted for the balance in lease adjustment account.

C Depreciation

a. On Assets other than given on lease

In respect of assets other than assets given on lease, the Company provides depreciation on the assets on the Straight Line Method (SLM) based on the useful life of the asset as prescribed in Schedule II to the Companies Act, 2013, on pro-rata basis. Software costs are amortized on SLM over a period of three years, from the year of acquisition.

b. On Assets given on lease under discontinuing operations

In respect of Assets given on lease under discontinuing operations, the Company provides depreciation on the assets in the WDV method on pro-rata basis, the month in which the assets are installed taken as full month. The cost of the Assets given on lease are amortized fully during the Lease period. (In accordance with the Guidance note on Accounting for Leases (revised) issued by the Institute of Chartered Accountants of India). The difference between the statutory depreciation and the annual lease charge is adjusted through the Lease Equalization, which is adjusted with the lease income.

D Investments

The investments held by the Company are all long-term investments. Long term investments are carried at cost less provision for diminution, other than temporary in nature. The Company has reckoned diminution in value of shares / debentures as permanent in nature by relying on market value of quoted shares and book value/ fair value whichever is higher in respect of unquoted shares.

E Employee Benefits

a. Short Term employee benefits/obligations are estimated and provide for.

b. Gratuity - The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days' salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company's liability towards Gratuity is actuarially determined at balance sheet date using the Project Unit Credit (PUC) method. Actuarial gains and losses are recognized in revenue.

c. Provident Fund - The eligible employees of the company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees salary, the contributions as specified under the Law are paid to the Provident fund and pension fund to the provident fund authorities.

d. Leave encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days un-utilised leave at each balance sheet date.

e. The retirement benefit liability to staff on deputation from Indian Bank is borne by Indian Bank except eligible Provident Fund contribution.

F Segment Reporting

The Segment Reporting is prepared in conformity with the accounting policies of the Company.

G Discontinuing Operations

The accounting policies adopted for discontinuing Operations are in line with the accounting policies adopted for Continuing Operations. H Income Tax.

Income Tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences arising out of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities resulting from change in tax rates is recognized in the income statement in the period of enactment of the change.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The expected rate of return is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the company's policy for plan assets management. The retirement benefit liability in respect of staff on deputation from Indian Bank is borne by Indian Bank.

The company has contributed Rs.6.37 Lakhs (previous year- Rs.5.18 lakhs) towards Gratuity liability in the year 2014-15.

The transactions with Holding company and fellow subsidiaries has not been disclosed in view of exemption for State-controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state-controlled enterprises.

The related party transactions with key management personnel have been disclosed in Managerial Remuneration - Note 30 of Notes on Accounts.

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Mar 31, 2014

The financial statements are prepared by following the going concern concept on historical cost convention using the accrual method of accounting, unless otherwise stated.

Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements, disclosure of contingent liabilities and reported amounts to revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt within the period in which the results are known/materialize.

A Revenue recognition

(a) Issue Management Fee and fees for other managerial services - Considered on the completion of assignment.

(b) Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars.

(c) Brokerages under stock broking operations are accounted on completion of contract.

(d) Interest on overdue lease rentals and hire purchase installments are accounted for on receipt basis.

(e) Dividend income is recognized when the right to receive is established.

B Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation & provision for impairment (if any). Assets given on lease (Contracted prior to December 1997) are further adjusted for the balance in lease adjustment account.

C Depreciation

a) On Assets other than given on lease

In respect of assets other than assets given on lease, the Company provides depreciation on the assets on the Straight Line Method (SLM) at the rates prescribed in Schedule XIV to the Companies Act, 1956, on pro-rata basis, the month in which the assets are installed taken as full month. Software costs are amortized on SLM over a period of three years, from the year of acquisition.

b) On Assets given on lease under discontinued operations

In respect of Assets given on lease under discontinued operations, the Company provides depreciation on the assets in the WDV method at the rates prescribed in Schedule XIV to the Companies Act 1956 on pro-rata basis, the month in which the assets are installed taken as full month. The cost of the Assets given on lease are amortized fully during the Lease period. (In accordance with the Guidance note on Accounting for Leases (revised) issued by the Institute of Chartered Accountants of India). The difference between the statutory depreciation and the annual lease charge is adjusted through the Lease Equalization, which is adjusted with the lease income.

D Investments

The investments held by the Company are all long-term investments. Long term investments are carried at cost less provision for diminution, other than temporary in nature. The Company has reckoned diminution in value of shares / debentures as permanent in nature by relying on market value of quoted shares and book value/ fair value whichever is higher in respect of unquoted shares.

E Employee Benefits

a) Short Term employee benefits/obligations are estimated and provide for.

b) Gratuity - The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days'' salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company''s annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company''s liability towards Gratuity is actuarially determined at balance sheet date using the Project Unit Credit (PUC) method. Actuarial gains and losses are recognized in revenue.

c) Provident Fund - The eligible employees of the company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees salary, the contributions as specified under the Law are paid to the Provident fund and pension fund to the provident fund authorities.

d) Leave encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days unutilised leave at each balance sheet date.

e) The retirement benefit liability to staff on deputation from Indian Bank is borne by Indian Bank except eligible Provident Fund contribution.

F Segment Reporting

The Segment Reporting is prepared in conformity with the accounting policies of the Company.

G Discontinued Operations

The accounting policies adopted for discontinued Operations are in line with the accounting policies adopted for Continuing Operations.

H Income Tax

I ncome Tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences arising out of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities resulting from change in tax rates is recognized in the income statement in the period of enactment of the change.

1. AS-15 - Employee Benefits Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expense for the year are as under: (Amount in Rs.)

Details 2013-14 2012-13

Employer''s contribution to Provident Fund 26,08,686 27,49,762

Employees Deposit Linked Insurance Scheme contribution to LIC 33,755 35,219

Defined Benefit Plan

I Reconciliation of opening and closing balances of Defined benefit obligation (Amount in Rs.)

Details Gratuity (Funded) Leave Encashment (Unfunded)

2013-14 2012-13 2013-14 2012-13

Defined benefit obligation at the 48,21,242 57,47,698 61,44,273 69,17,235 beginning of the year

Current service cost 5,24,332 6,34,967 6,98,510 90,130

Interest cost 3,85,699 4,59,816 5,59,129 5,53,379

Actuarial (gain)/ loss (11,95,793) 2,09,669 (14,86,532) (14,16,471)

Benefits paid - 22,30,908 - -

Settlement cost - - - -

Defined benefit obligation at the year end 45,35,480 48,21,242 59,15,380 61,44,273

II Reconciliation of opening and closing balances of fair value of plan assets

(Amount in Rs.)

Gratuity (Funded) Details 2013-14 2012-13

Fair value of plan assets at the beginning of the year 52,70,514 61,80,698

Expected return on plan assets (8,30,993) 4,49,272

Contributions - 8,71,452

Actuarial (gain)/ loss - -

Benefits paid - 22,30,908

Settlement cost - -

Fair value of plan assets at year end 44,39,521 52,70,514

Actual return on plan assets (8,30,993) 4,49,272

III Reconciliation of fair value of assets and obligations

(Amount in Rs.)

Gratuity (Funded) Leave Encashment (Unfunded) Details 2013-14 2012-13 2013-14 2012-13

Fair value of plan assets 44,39,521 52,70,514 59,15,380 61,44,273

Present value of obligation 45,35,480 48,21,242 61,44,273 69,17,235

Amount recognized in Balance Sheet (95,959) 4,49,272 (2,28,893) (7,72,962)

IV Expense recognized during the year

(Amount in Rs.)

Details Gratuity (Funded) Leave Encashment (Unfunded)

2013-14 2012-13 2013-14 2012-13 Current Service Cost 5,24,332 6,34,967 6,98,510 90,130

Interest Cost 3,85,699 4,59,816 5,59,129 5,53,379

Expected return on plan assets (8,30,993) 4,49,272 - -

Actuarial (gain) / loss (11,95,793) 2,09,669 (14,86,532) (14,16,471)

Net Cost 5,45,231 8,55,180 (2,28,893) (7,72,962)

V Actuarial assumptions (Amount in Rs.)

Gratuity (Funded) Leave Encashment (Unfunded) Details 2013-14 2012-13 2013-14 2012-13

Mortality Table (LIC) 1994-96 1994-96 1994-96 1994-96 (Ultimate) (Ultimate) (Ultimate) (Ultimate)

Discount rate (per annum) 8% 8% 9.10% 8%

Expected rate of return (per annum) 8% 8% - -

Rate of escalation of salary (per annum) 5% 5% 7% 5%

Attrition Rate 1% to 3% 1% to 3% 12% 1% to 3%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The expected rate of return is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the company''s policy for plan assets management. The retirement benefit liability in respect of staff on deputation from Indian Bank is borne by Indian Bank.

The company has contributed Rs. 5.18 Lakhs (previous year- Rs. 8.98 lakhs) towards Gratuity liability in the year 2013-14.

2. AS-18 - Related Party Transactions

The Company has identified all related parties and transactions with the related parties as per details given below:

Name Relationship

Indian Bank Holding Company

Ind Bank Housing Limited Fellow Subsidiary

Key Management Personnel Mr. Banabihari Panda, President & Wholetime Director

The transactions with Holding company and fellow subsidiaries has not been disclosed in view of exemption for State-controlled enterprises from making any disclosure pertaining to their transactions with other related parties which are also state-controlled enterprises.

The related party transactions with key management personnel have been disclosed in Managerial Remuneration - Note 29 of Notes on Accounts.

3. AS-19 - Leases

In case of assets taken on lease

The company has operating leases for office premises at various locations with Indian Bank. The future minimum payments required under non-cancellable operating leases at year-end are as follows:

Rs.Lakhs

As on 31.03.2014 As on 31.03.2013

Lease payments for the year 20.63 21.50

Minimum Lease payments: Not later than one year 0.00 0.00

Later than one year but not later than five years 0.00 0.00

Later than five years 0.00 0.00

4. AS-24 - Discontinued operations and Segment reporting

The Company had discontinued fund-based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee-based activities. The existing fund based exposures as on December 1997 are continued to run down to their contracted period. The Company had obtained cancellation of registration as NBFC from RBI consequent to repayment of fixed deposits and transfer of unclaimed fixed deposits to an escrow account with a nationalized bank for repayment as and when claimed. The Company is now governed only by SEBI regulations.

The business segments have been identified as the Primary Segment considering the nature of service, organizational structure and internal financial reporting system. The services of the reported domestic business segments are classified as "Discontinued operations" (Fund Based) and "Continuing Operations" (Fee Based). Discontinued operations consists of Leasing, Hire purchase, Intercorporate deposits and Investments. Continuing operations include Merchant Banking, Stock Broking, Depository Participant services, Distribution of Financial Products and allied activities. There is no Secondary Reportable Segment.

Rs.Lakhs

2013-14

Particulars Continuing Discontinued Operations Operations Un Total (Fee based) (Fund based) Allocated

Income from Operations 744.62 13.90 0.00 758.52

Expenses

Administration & Other exp 543.01 5.35 0.00 548.36

Depreciation 67.11 0.00 0.00 67.11

Provisions 9.72 87.29 0.00 97.01

Finance Cost 4.39 0.00 0.00 4.39

Int on IT refund - Excess 942 0.00 0.00 9.42 interest reversed

Total - Expenses 633.65 92.64 0.00 726.29

Profit/(Loss) before Tax 110.97 (78.74) 0.00 32.23

Exceptional item - Interest 0.00 0.00 0.00 0.00

ExcePtional item - Prior period adjustments 0.00 0.00 0.84 0.84

Provision for tax - Deferred 0.00 0.00 1.37 1.37

Provision for tax - Prior period 0.00 0.00 0.00 0.00

Profit/(Loss) after Tax 110.97 (78.74) (2.21) 30.02

Total Assets 3210.63 364.44 1555.83 5130.90

Total liabilities 961.58 0.00 0.00 961.58

Capital Expenditure 1.92 0.00 0.00 1.92

Non cash expenditure 9.72 87.29 0.84 97.85

Net Cash flow from operating 877.74 (89.13) 1.37 789.98

Net Cash flow from (565.20) 107.26 0.00 (457.94)

Rs.Lakhs

2012-13

Particulars Continuing Discontinued Operations Operations Un- Total (Fee based) (Fund based) Allocated

Income from Operations 703.36 48.97 0.00 752.33

Expenses

Administration & Other exp 642.98 14.87 0.00 657.84

Depreciation 70.85 0.00 0.00 70.85

Provisions 0.46 (36.89) 0.00 (36.43)

Finance Cost 0.63 0.00 0.00 0.63

Int on IT refund - Excess interest reversed

Total - Expenses 714.92 (22.02) 0.00 692.89

Profit/(Loss) before Tax (11.57) 70.99 0.00 59.42 Exceptional item - Interest 0.00 0.00 0.00 0.00

ExcePtional item - Prior period adjustments 0.00 0.00 42.86 42.86

Provision for tax - Deferred 0.00 0.00 29.35 29.35

Provision for tax - Prior period 0.00 0.00 0.00 0.00

Profit/(Loss) after Tax (10.93) 70.99 12.88 72.94

Total Assets 2735.43 461.30 1502.60 4699.33

Total liabilities 560.02 0.00 0.00 560.02

Capital Expenditure 126.47 0.00 0.00 126.47

Non cash expenditure 0.46 (14.62) (42.86) (57.02)

Net Cash flow from operating (89.27) 22.03 29.35 (37.89)

Net Cash flow from (175.05) 76.36 0.00 (98.69)

Investment activities

5. Interest on Income tax refund - Excess Interest reversed

Based on the orders, under section 154 of the Income Tax Act, received during the year, the interest reduced by the department on the refunds due under Income Tax which were earlier allowed and booked during 2011-12 for various assessment years amounting to Rs. 9.42 lakhs were reversed in the accounts.

Assessment Year Particulars Amount (Rs.)

2000-01 Interest on income tax refund due 409201

2001-02 Interest on income tax refund due 452267

2003-04 Interest on income tax refund due 80961

Total 942429

6. Indian Bank, the parent Bank, has permitted the company to pay the balance of Rs. 897.48 lakhs payable to them under the Right to Recompense on or before 30.09.2013. The company has represented to Indian Bank for waiver of this amount which is under consideration of the Bank.

7. AS-29 - Contingent Liability

A Disputed demand on taxes

i) Income Tax Rs.Lakhs

2013-14 2012-13

Asst Year Tax Interest Total Tax Interest Total Demand Demand 1997-98 20.13 0.00 20.13 0.00 0.00 0.00

1998-99 45.31 0.00 45.31 0.00 0.00 0.00

2007-08* 462.02 155.45 617.47 462.02 155.45 617.47

2008-09** 832.56 296.49 1129.05 832.56 296.49 1129.05

2009-10 72.23 0.00 72.23 72.23 0.00 72.23 Total 1432.25 451.94 1884.19 1366.81 451.94 1818.75

* The company has paid Rs. 18 lakhs for this Assessment Year in terms of the orders passed by the CIT on the stay petition filed by the company.

** The company has paid Rs. 32 lakhs for this Assessment Year in terms of the orders passed by the CIT on the stay petition filed by the company.

ii) Sales Tax demand disputed in appeal - Rs. 57.37 lakhs (Previous year Rs. 108.87 lakhs). (Rs. 42.78 lakhs at Chennai and Rs.14.59 lakhs at Rajasthan)

B Guarantees - Counter guarantee issued to bank for guarantees - Rs. 200.00 lakhs (Previous Year- Rs. 200.00 lakhs)

C Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year Rs. 20.72 lakhs).

8. Managerial Remuneration: Rs.Lakhs

Name Designation 2013-14 2012-13

Salary 12.64 11 29

Mr. Banabihari Panda President & Wholetime Director Contribution to PF 0.65 0.64

Sitting Fees paid to Non - Wholetime Directors 0.96 0.96 President and Whole Time Director of the Company is on deputation from Indian Bank and the remuneration is in accordance with the service rules of the said Bank and also in terms of appointment as ''Whole Time Director'' by the shareholders of the Company.

9. As at March 31,2014, the Company has no outstanding dues to medium and small enterprises. There is no liability towards interest on delayed payments under the Micro, Small and Medium Enterprises Development Act, 2006 during the year.

10. In the opinion of the Management all Fixed Assets, Current Assets, Loans & Advances will have value on realization in the ordinary course of business at least equal to the amounts at which they are stated in the accounts.

11. The previous year''s figures in the Balance Sheet, Profit and Loss Account and Cash Flow Statement have been regrouped and reclassified, wherever necessary, to conform to the current year''s classification.

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Mar 31, 2011

The financial statements are prepared by following the going concern concept on historical cost convention using the accrual method of accounting, unless otherwise stated.

Use of Estimates :

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements, disclosure of contingent liabilities and reported amounts to revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt with in the period in which the results are known/ materialize.

A. Revenue recognition

(a) Issue Management Fee and fees for other managerial services - Considered on the completion of assignment.

(b) Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars.

(c) Brokerages under stock broking operations are accounted on completion of contract.

(d) Interest on overdue lease rentals and hire purchase installments are accounted for on receipt basis.

(e) Dividend income is recognized when the right to receive is established.

B. Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation & provision for impairment (if any). Leased assets (Contracted prior to December 1997) are further adjusted for the balance in lease adjustment account.

C. Depreciation

a) On Assets other than given on lease

In respect of assets other than assets given on lease, the Company provides depreciation on the assets on the Straight Line Method (SLM) at the rates prescribed in Schedule XIV to the Companies Act, 1956, on pro-rata basis, the month in which the assets are installed taken as full month. Software costs are amortised on SLM over a period of three years, from the year of acquisition.

b) On Leased assets under discontinued operations

In respect of leased assets under discontinued operations, the Company provides depreciation on the assets in the WDV method at the rates prescribed in Schedule XIV to the Companies Act 1956 on pro-rata basis, the month in which the assets are installed taken as full month. The cost of the Leased Assets are amortised fully during the Lease period. (In accordance with the Guidance note on Accounting for Leases (revised) issued by the Institute of Chartered Accountants of India.) The difference between the statutory depreciation and the annual lease charge is adjusted through the Lease Equalisation, which is adjusted with the lease income.

D Investments

The investments held by the Company are all long-term investments. Long term investments are carried at cost less provision for diminution, other than temporary in nature. The Company has reckoned diminution in value of shares / debentures as permanent in nature by relying on market value of quoted shares and book value/ fair value whichever is higher in respect of unquoted shares.

E Employee Benefits

a) Short Term employee benefits/obligations are estimated and provide for.

b) Gratuity - The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment an amount equivalent to 15 days' salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life Insurance Corporation of India. The Company's liability towards Gratuity is actuarially determined at balance sheet date using the Project Unit Credit (PUC) method. Actuarial gains and losses are recognized in revenue.

c) Provident Fund - The eligible employees of the company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company makes monthly contributions at a specified percentage of the covered employees salary, the contributions as specified under the Law are paid to the Provident fund and pension fund to the provident fund authorities

d) Leave encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basis of actuarial valuation based on number of days un- utilised leave at each balance sheet date.

e) The retirement benefit liability to staff on deputation from Indian Bank is borne by Indian Bank except eligible Provident Fund contribution.

F Segment Reporting

The Segment Reporting is prepared in conformity with the accounting policies of the Company.

G Discontinued Operations

The accounting policies adopted for Discontinued Operations are in line with the accounting policies adopted for Continuing Operations.

H Income Tax

Income Tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences arising out of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities resulting from change in tax rates is recognized in the income statement in the period of ehacement of the chanae.

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Mar 31, 2010

The financial statements are prepared by following the going concern concept on historical cost convention using the accrual method of accounting, unless otherwise stated.

Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements, disclosure of contingent liabilities and reported amounts to revenues and expenses for the year. Estimates are based on historical experience, where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such differences are dealt with in the period in which the results are known/materialize.

A Revenue recognition

(a) Issue Management Fee and fees for other managerial services - Considered on the completion of assignment.

(b) Underwriting Commission and brokerage on distribution of financial products - Considered on receipt of subscription particulars.

(c) Brokerages under stock broking operations are accounted on completion of contract.

(d) Interest on overdue lease rentals and hire purchase installments are accounted for on receipt basis.

(e) Dividend income is recognized when the right to receive is established.

C Fixed Assets

Fixed Assets are stated at historical cost less accumulated depreciation & provision for impairment (if any). Leased assets (Contracted prior to December 1997) are further adjusted for the balance in lease adjustment account.

D Depreciation

a) On Assets other than given on lease

In respect of assets other than assets given on lease, the Company provides depreciation on the assets on the Straight Line Method (SLM) at the rates prescribed in Schedule XIV to the Companies Act, 1956, on pro-rata basis, the month in which the assets are installed taken as full month. Software costs are amortised on SLM over a period of three years, from the year of acquisition.

b) On Leased assets

In respect of leased assets, the Company provides depreciation on the assets in the WDV method at the rates prescribed in Schedule XIV to the Companies Act 1956 on pro-rata basis, the month in which the assets are installed taken as full month. The cost of the Leased Assets are amortised fully during the Lease period in accordance with the Guidance note on Accounting for Leases (revised) issued by the Institute of Chartered Accountants of India. The difference between the statutory depreciation and the annual lease charge is adjusted througn the Lease Equalisation, which is adjusted with the lease income.

E Investments

The investments held by the Company are all long-term investments Long term investments are carried at cost less provision for diminution, other than temporary in nature. The Company has reckoned diminution in value of shares / debentures as permanent in nature by relying on market value of quoted shares and book value/ fair value whichever is higher in respect of unquoted shares

F Employee Benefits

a) Short Term employee benefits/obligations are estimated and provide for.

b) Gratuity -The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lumpsum payment to vested employees at retirement, death While in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The companys annual contribution to gratuity fund established as a Trust through a Group Gratuity Policy with Life insurance Corporation of India. The Companys liability towards Gratuity is actuanally determined at balance sheet date using the Project Unit Credit (PUC) method, Actuarial gains and losses are recognized in revenue.

c) Provident Fund - The eligible employees of the company are entitled to receive benefits under Provident Fund, a defined contribution plan in which both employees and the company make monthly contributions at a specified percentage of the covered employees salary, the contributions as specified under the Law are paid to the Provident fund and pension fund to the provident fund authorities

d) Leave encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been provided for on the basil of actuarial valuation based on number of days of un-utilised leave at each balance sheet date.

e) The retirement benefit liability to staff on deputation from indian Bank is borne by Indian Bank except eligible Provident Fund contribution.

G Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset when it will result in future economic benefits to the Company. Other borrowing costs are recognised as an expense in the period in which they are incurred.

H Segment Reporting

The Segment Reporting is prepared in conformity with the accounting policies of the Company.

I Discontinuing Operations

The accounting policies adopted for Discontinuing Operations are in line with the accounting policies adopted for Continuing Operations.

J Income Tax

Income Tax comprises the current tax provision and the net change in the deferred tax asset or liability during the year. Deferred tax assets and liabilities are recognized for the future tax consequences arising out of temporary differences between the carrying values of the assets and liabilities and their respective tax bases. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/virtual certainty (as applicable) that sufficient future taxable income will be available against which such deferred tax asset can be realized. The effect on deferred tax assets and liabilities resulting from change in tax rates is recognized in the income statement in the period of enactment of the change.