Accounting Policies of Polytex India Ltd. Company

Mar 31, 2025

2.2 Summary of significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of these
financial statements. These policies have been consistently applied to all the years presented,
unless otherwise stated.

(I) Income: -

(a) Interest income

The Company recognises interest income using effective interest rate (EIR) on all financial assets
subsequently measured under amortised cost or fair value through other comprehensive income
(FVOCI). 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 gross carrying amount of a financial asset or to the amortised cost
of a financial liability.

The Company calculates 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, the
Company recognises interest income on the amortised cost net of impairment loss of the
financial asset at EIR. If the financial asset is no longer credit-impaired, 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 recognised on realisation.

Interest on financial assets subsequently measured at fair value through profit or loss (FVTPL) is
recognised at the contractual rate of interest.

(b) Dividend income

Dividend income on equity shares is recognised when the Company’s right to receive the
payment is established, which is generally when shareholders approve the dividend.

(c) Other revenue from operations

The Company recognises revenue from contracts with customers (other than financial assets to
which Ind AS 109 ''Financial instruments'' is applicable) based on a comprehensive assessment
model as set out in Ind AS 115 ''Revenue from contracts with customers. The Company identifies
contract(s) with a customer and its performance obligations under the contract, determines the
transaction price and its allocation to the performance obligations in the contract and recognises
revenue only on satisfactory completion of performance obligations. Revenue is measured at the
fair value of the consideration received or receivable.

1. Fees and commission income

The Company recognises service and administration charges towards rendering of additional
services to its loan customers on satisfactory completion of service delivery. Bounce charges
levied on customers for non-payment of instalment on the contractual date is recognised on
realisation.

Fees on value added services and products are recognised on rendering of services and products
to the customer.

Distribution income is earned by distribution of services and products of other entities under
distribution arrangements. The income so earned is recognised on successful distribution on
behalf of other entities subject to there being no significant uncertainty of its recovery.

Foreclosure charges are collected from loan customers for early payment/closure of loan and are
recognised on realisation.

2. Net gain on fair value changes

The Company designates certain financial assets for subsequent measurement at fair value
through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI). The
Company recognises gains on fair value change of financial assets measured at FVTPL and
realised gains on derecognition of financial asset measured at FVTPL and FVOCI on net basis.

3. Sale of service

The Company, on de-recognition of financial assets where a right to service the derecognised
financial assets for a fee is retained, recognises the fair value of future service fee income over
service obligations cost on net basis as service fee income in the Statement of Profit and Loss and,
correspondingly creates a service asset in Balance Sheet. Any subsequent increase in the fair
value of service assets is recognised as service income and any decrease is recognised as an
expense in the period in which it occurs. The embedded interest component in the service asset is
recognised as interest income in line with Ind AS 109 ''Financial instruments''.

4. Other operating income

The Company recognises income on recoveries of financial assets written off on realisation or
when the right to receive the same without any uncertainties of recovery is established.

(d) Taxes

Incomes are recognised net of the goods and services tax, wherever applicable. Company not
having GST no because company is NBFC and only having interest Income.

(II) Expenditures:

(a) Finance costs

Company not having any Borrowing costs on financial liabilities.

Fees and commission expense

Fees and commission expenses which are not directly linked to the sourcing of financial assets,
such as commission/incentive incurred on value added services and products distribution,
recovery charges and fees payable for management of portfolio etc., are recognised in the
Statement of Profit and Loss on an accrual basis.

(b) Other expenses

Expenses are recognised on accrual basis net of the goods and services tax, except where credit
for the input tax is not statutorily permitted.

(III) Cash and cash equivalents

Cash and cash equivalents include cash on hand and 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.

(IV) Financial instruments

A financial instrument is defined as any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity. Trade receivables and payables,
loan receivables, investments in securities and subsidiaries, debt securities and other
borrowings, preferential and equity capital etc. are some examples of financial instruments.

All the financial instruments are recognised on the date when the Company becomes party to the
contractual provisions of the financial instruments. For tradable securities, the Company
recognises the financial instruments on settlement date.

(a) Financial assets

Financial assets include cash, or an equity instrument of another entity, or a contractual
right to receive cash or another financial asset from another entity. Few examples of
financial assets are loan receivables, investment in equity and debt instruments, trade
receivables and cash and cash equivalents.

Initial measurement

All financial assets are recognised initially at fair value including transaction costs that
are attributable to the acquisition of financial assets except in the case of financial assets
recorded at FVTPL where the transaction costs are charged to profit or loss. Generally, the
transaction price is treated as fair value unless proved to the contrary.

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into four
categories as per the Company''s Board approved policy:

(i) Debt instruments at amortised cost

(ii) Debt instruments at FVOCI

(iii) Debt instruments at FVTPL

(iv) Equity instruments designated under FVOCI

(i) Debt instruments at amortised cost

The Company measures its financial assets at amortised cost if both the following conditions are
met:

• The asset is held within a business model of collecting contractual cash flows; and

• Contractual terms of the asset give rise on specified dates to cash flows that are Sole
Payments of Principal and Interest (SPPI) on the principal amount outstanding.

To make the SPPI assessment, the Company applies judgment and considers relevant factors
such as the nature of portfolio, and the period for which the interest rate is set.

The Company determines its business model at the level that best reflects how it manages groups
of financial assets to achieve its business objective. The Company''s business model is not
assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios. If
cash flows after initial recognition are realised in a way that is different from the Company''s
original expectations, the Company does not change the classification of the remaining financial
assets held in that business model, but incorporates such information when assessing newly
originated financial assets going forward.

The business model of the Company for assets subsequently measured at amortised cost
category is to hold and collect contractual cash flows. However, considering the economic
viability of carrying the delinquent portfolios on the books of the Company, it may enter into
immaterial and/or infrequent transactions to sell these portfolios to banks and/or asset
reconstruction companies without affecting the business model of the Company.

After initial measurement, such financial assets are subsequently measured at amortised cost on
effective interest rate (EIR). For further details, refer note no. 2.2(I)(a). The expected credit loss
(ECL) calculation for debt instruments at amortised cost is explained in subsequent notes in this
section.

(ii) Debt instruments at FVOCI

The Company subsequently classifies its financial assets as FVOCI, only if both of the following
criteria are met:

• the objective of the business model is achieved both by collecting contractual cash flows
and selling the financial assets; and

• Contractual terms of the asset give rise on specified dates to cash flows that are Solely
Payments of Principal and Interest (SPPI) on the principal amount outstanding.

Debt instruments included within the FVOCI category are measured at each reporting date at fair
value with such changes being recognised in other comprehensive income (OCI). The interest
income on these assets is recognised in profit or loss. The ECL calculation for debt instruments at
FVOCI is explained in subsequent notes in this section.

Debt instruments such as long-term investments in Government securities to meet regulatory
liquid asset requirement of the Company''s deposit program are classified as FVOCI.

On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified
from other comprehensive income to profit or loss.

(iii) Debt instruments at FVTPL

The Company classifies financial assets which are held for trading under FVTPL category. Held
for trading assets are recorded and measured in the Balance Sheet at fair value. Interest and
dividend incomes are recorded in Statement of Profit and Loss, according to the terms of the
contract, or when the right to receive the same has been established. Gain and losses on changes
in fair value of debt instruments are recognised on net basis through profit or loss.

The Company''s investments into mutual funds, Government securities (trading portfolio) and
certificate of deposits for trading and short-term cash flow management have been classified
under this category.

(iv) Equity investments designated under FVOCI

All equity investments in scope of Ind AS 109 ''Financial instruments'' are measured at fair value.
The Company has strategic investments in equity for which it has elected to present subsequent
changes in the fair value in other comprehensive income. The classification is made on initial
recognition and is irrevocable.

Derecognition of financial assets

The Company derecognises a financial asset (or, where applicable, a part of a financial asset)
when:

• The right to receive cash flows from the asset has expired; or

• The Company has transferred its right to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
under an assignment arrangement and the Company has transferred substantially all the
risks and rewards of the asset. Once the asset is derecognised, the Company does not have
any continuing involvement in the same.

On derecognition of a financial asset in its entirety, the difference between:

• the carrying amount (measured at the date of derecognition) and

• the consideration received (including any new asset obtained less any new liability
assumed) is recognised in profit or loss.

Financial assets subsequently measured at amortised cost are generally held for collection of
contractual cashflow. The Company on looking at economic viability of certain portfolios
measured at amortised cost may enter into immaterial and/or infrequent transaction of sale of
portfolio which doesn’t affect the business model of the Company.

Reclassification of financial assets

The Company changes classification of its financial assets only on account of changes in its
business model for managing those financial assets. Such reclassifications are given prospective
impact as per the principles laid down in Ind AS 109 ''Financial Instruments.’

Impairment of financial assets

ECL are recognised for financial assets held under amortised cost, debt instruments measured at
FVOCI, and certain loan commitments as per the Board approved policy.

Financial assets where no significant increase in credit risk has been observed are considered to
be in ''stage 1’ for which a 12 months ECL is recognised. Financial assets that are considered to
have significant increase in credit risk are considered to be in ''stage 2'' and those which are in
default or for which there is objective evidence of impairment are considered to be in ''stage 3’.
Life time ECL is recognised for stage 2 and stage 3 financial assets.

At initial recognition, allowance (or provision in the case of loan commitments) is required for
ECL towards default events that are possible in the next 12 months, or less, where the remaining
life is less than 12 months.

In the event of a significant increase in credit risk, allowance (or provision) is required for ECL
towards all possible default events over the expected life of the financial instrument (''lifetime
ECL’).

Financial assets (and the related impairment allowances) are written off in full, when there is no
realistic prospect of recovery.

Treatment of the different stages of financial assets and the methodology of determination of ECL

(a) Credit impaired (stage 3)

The Company recognises a financial asset to be credit impaired and in stage 3 by considering
relevant objective evidence, primarily whether:

• Contractual payments of either principal or interest are past due for more than 90 days;

• The loan is otherwise considered to be in default

Restructured loans where repayment terms are renegotiated as compared to the original
contracted terms due to significant credit distress of the borrower are classified as credit
impaired. Such loans continue to be in stage 3 until they exhibit regular payment of renegotiated
principal and interest over a minimum observation of period, typically 12 months- post
renegotiation, and there are no other indicators of impairment. Having satisfied the conditions of
timely payment over the observation period these loans could be transferred to stage 1 or 2 and a
fresh assessment of the risk of default be done for such loans.

Interest income is recognised by applying the effective interest rate to the net amortised cost
amount i.e., gross carrying amount less ECL allowance.

(b) Significant increase in credit risk (stage 2)

An assessment of whether credit risk has increased significantly since initial recognition is
performed at each reporting period by considering the change in the risk of default of the loan
exposure. However, unless identified at an earlier stage, 30 days past due is considered as an
indication of financial assets to have suffered a significant increase in credit risk. Based on other
indications such as borrower’s frequently delaying payments beyond due dates though not 30
days past due are included in stage 2 for mortgage loans.

The measurement of risk of defaults under stage 2 is computed on homogenous portfolios,
generally by nature of loans, tenors, underlying collateral, geographies and borrower profiles.

The default risk is assessed using PD (probability of default) derived from past behavioral trends
of default across the identified homogenous portfolios. These past trends factor in the past
customer behavioral trends, credit transition probabilities and macroeconomic conditions. The
assessed PDs are then aligned considering future economic conditions that are determined to
have a bearing on ECL.

(c) Without significant increase in credit risk since initial recognition (stage 1)

ECL resulting from default events that are possible in the next 12 months are recognised for
financial instruments in stage 1. The Company has ascertained default possibilities on past
behavioral trends witnessed for each homogenous portfolio using application/behavioral score
cards and other performance indicators, determined statistically.

(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, the estimation of ECL takes into account the time value of 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 multiplying the
PD, LGD 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 stage 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 any
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 realised and the time value of money.

The Company recalibrates above components of its ECL model on a periodical basis by using the
available incremental and recent information as well as assessing changes to its statistical
techniques for a granular estimation of ECL.

(b) Financial liabilities

Financial liabilities include liabilities that represent a contractual obligation to deliver cash or
another financial asset to another entity, or a contract that may or will be settled in the entity''s
own equity instruments. Few examples of financial liabilities are trade payables, debt securities
and other borrowings and subordinated debts.

Initial measurement

All financial liabilities are recognised initially at fair value and, in the case of borrowings and
payables, net of directly attributable transaction costs. The Company’s financial liabilities
include trade payables, other payables, debt securities and other borrowings.

Subsequent measurement

After initial recognition, all financial liabilities are subsequently measured at amortised cost
using the EIR method [Refer note no 2.2(I)(a)]. Any gains or losses arising on derecognition of
liabilities are recognised in the Statement of Profit and Loss.

Derecognition

The Company derecognises a financial liability when the obligation under the liability is
discharged, cancelled or expired.

(c) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance
Sheet only if there is an enforceable legal right to offset the recognised amounts with an intention
to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

(V) Investment in subsidiaries

Investment in subsidiaries is recognised at cost and are not adjusted to fair value at the end of
each reporting period as allowed by Ind AS 27 ''Separate financial statement’. Cost of investment
represents amount paid for acquisition of the said investment and a proportionate recognition of
the fair value of shares granted to employees of subsidiary under a group share based payment
arrangement.

The Company assesses at the end of each reporting period, if there are any indications that the
said investment may be impaired. If so, the Company estimates the recoverable value/amount of
the investment and provides for impairment, if any i.e. the deficit in the recoverable value over
cost.

The company has not any subsidiary in the current reporting period.

(VI) Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities, in accordance with the Income Tax Act, 1961 and the Income
Computation and Disclosure Standards (ICDS) prescribed therein. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the reporting
date.

Current tax relating to items recognised outside profit or loss is recognised in correlation to the
underlying transaction either in OCI or directly in other equity. Management periodically

evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.

(ii) Deferred tax

Deferred tax is recognised using the Balance Sheet approach on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes
at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax
assets are recognised for deductible temporary differences to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can be
utilised.

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

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

Deferred tax relating to items recognised outside profit or loss is recognised either in other
comprehensive income or in other equity.

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

(VII) Property, plant and equipment

Property, plant and equipment are carried at historical cost of acquisition less accumulated
depreciation and impairment losses, consistent with the criteria specified in Ind AS 16 ''Property,
plant and equipment''.

Depreciation on property, plant and equipment

1. Depreciation is provided on a pro rata basis for all tangible assets on written-down
methods over the useful life of assets.

2. Useful lives of assets are determined by the Management by an internal technical
assessment except where such assessment suggests a life significantly different from those
prescribed by Schedule II - Part C of the Companies Act, 2013 where the useful life is as assessed
and certified by a technical expert.

3. Depreciation on addition to assets and assets sold during the year is being provided for on
a pro rata basis with reference to the month in which such asset is added or sold as the case may be.

4. Assets having unit value up to Rs. 5,000 is depreciated fully in the financial year of
purchase of asset.

5. An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included under other
income in the Statement of Profit and Loss when the asset is derecognised.

6. Currently company have only salvage value of tangible assets and management has
decided not to charge depreciation on these assets hence the salvage value of tangible assets
shown on the face of the balance sheets.

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

(VIII) Intangible assets and amortisation thereof

Intangible assets, representing software’s are initially recognised at cost and subsequently
carried at cost less accumulated amortisation and accumulated impairment. The company has
computer software and it depreciated as per written down methods. Currently company has
salvage value of these assets hence management is decided not to charge depreciation on these
assets and salvage value of the assets are shown on the face of the Balance sheet.

(IX) Impairment of non-financial assets

An assessment is done at each Balance Sheet date to ascertain whether there is any indication
that an asset may be impaired. If any such indication exists, an estimate of the recoverable
amount of asset is determined. If the carrying value of relevant asset is higher than the
recoverable amount, the carrying value is written down accordingly.

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Mar 31, 2024

2.2. Summary of significant accounting policies

This note provides a list of the significant accounting policies adopted in the
preparation of these financial statements. These policies have been consistently
applied to all the years presented, unless otherwise stated.

(I) Income:-

(a) Interest income

The Company recognises interest income using effective interest rate (EIR) on
all financial assets subsequently measured under amortised cost or fair value
through other comprehensive income (FVOCI). 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 gross carrying amount of a financial
asset or to the amortised cost of a financial liability.

The Company calculates 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, the Company recognises interest income on the
amortised cost net of impairment loss of the financial asset at EIR. If the

financial asset is no longer credit-impaired, 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 cash flows is recognised on realisation.

Interest on financial assets subsequently measured at fair value through profit
or loss (FVTPL) is recognised at the contractual rate of interest.

(b) Dividend income

Dividend income on equity shares is recognised when the Company’s right to
receive the payment is established, which is generally when shareholders
approve the dividend.

(c) Other revenue from operations

The Company recognises revenue from contracts with customers (other than
financial assets to which Ind AS 109 ‘Financial instruments’ is applicable)
based on a comprehensive assessment model as set out in Ind AS 115 ‘Revenue
from contracts with customers. The Company identifies contract(s) with a
customer and its performance obligations under the contract, determines the
transaction price and its allocation to the performance obligations in the contract
and recognises revenue only on satisfactory completion of performance
obligations. Revenue is measured at the fair value of the consideration received
or receivable.

1. Fees and commission income

The Company recognises service and administration charges towards
rendering of additional services to its loan customers on satisfactory
completion of service delivery. Bounce charges levied on customers for
non-payment of instalment on the contractual date is recognised on
realisation.

Fees on value added services and products are recognised on rendering
of services and products to the customer.

Distribution income is earned by distribution of services and products of
other entities under distribution arrangements. The income so earned is
recognised on successful distribution on behalf of other entities subject
to there being no significant uncertainty of its recovery.

Foreclosure charges are collected from loan customers for early
payment/closure of loan and are recognised on realisation.

2. Net gain on fair value changes

The Company designates certain financial assets for subsequent
measurement at fair value through profit or loss (FVTPL) or fair value
through other comprehensive income (FVOCI). The Company
recognises gains on fair value change of financial assets measured at
FVTPL and realised gains on derecognition of financial asset measured
at FVTPL and FVOCI on net basis.

3. Sale of service

The Company, on de-recognition of financial assets where a right to
service the derecognised financial assets for a fee is retained, recognises
the fair value of future service fee income over service obligations cost
on net basis as service fee income in the Statement of Profit and Loss
and, correspondingly creates a service asset in Balance Sheet. Any
subsequent increase in the fair value of service assets is recognised as
service income and any decrease is recognised as an expense in the
period in which it occurs. The embedded interest component in the
service asset is recognised as interest income in line with Ind AS 109
‘Financial instruments’.

4. Other operating income

The Company recognises income on recoveries of financial assets
written off on realisation or when the right to receive the same without
any uncertainties of recovery is established.

(d) Taxes

Incomes are recognised net of the goods and services tax, wherever applicable.
Company not having GST no because company is NBFC and only having
interest Income.

(II) Expenditures:-

(a) Finance costs

Company not having any Borrowing costs on financial liabilities.

Fees and commission expense

Fees and commission expenses which are not directly linked to the sourcing of
financial assets, such as commission/incentive incurred on value added services
and products distribution, recovery charges and fees payable for management
of portfolio etc., are recognised in the Statement of Profit and Loss on an accrual
basis.

(b) Other expenses

Expenses are recognised on accrual basis net of the goods and services tax,
except where credit for the input tax is not statutorily permitted.

(III) Cash and cash equivalents

Cash and cash equivalents include cash on hand and 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.

(IV) Financial instruments

A financial instrument is defined as any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of another entity.
Trade receivables and payables, loan receivables, investments in securities and
subsidiaries, debt securities and other borrowings, preferential and equity
capital etc. are some examples of financial instruments.

All the financial instruments are recognised on the date when the Company
becomes party to the contractual provisions of the financial instruments. For
tradable securities, the Company recognises the financial instruments on
settlement date.

(a) Financial assets

Financial assets include cash, or an equity instrument of another entity, or a
contractual right to receive cash or another financial asset from another entity.
Few examples of financial assets are loan receivables, investment in equity and
debt instruments, trade receivables and cash and cash equivalents.

Initial measurement

All financial assets are recognised initially at fair value including transaction
costs that are attributable to the acquisition of financial assets except in the case
of financial assets recorded at FVTPL where the transaction costs are charged
to profit or loss. Generally, the transaction price is treated as fair value unless
proved to the contrary.

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into
four categories as per the Company’s Board approved policy:

(i) Debt instruments at amortised cost

(ii) Debt instruments at FVOCI

(iii) Debt instruments at FVTPL

(iv) Equity instruments designated under FVOCI

(i) Debt instruments at amortised cost

The Company measures its financial assets at amortised cost if both the
following conditions are met:

? The asset is held within a business model of collecting contractual
cash flows; and

? Contractual terms of the asset give rise on specified dates to cash
flows that are Sole Payments of Principal and Interest (SPPI) on the
principal amount outstanding.

To make the SPPI assessment, the Company applies judgment and
considers relevant factors such as the nature of portfolio, and the period
for which the interest rate is set.

The Company determines its business model at the level that best
reflects how it manages groups of financial assets to achieve its business
objective. The Company’s business model is not assessed on an
instrument-by-instrument basis, but at a higher level of aggregated
portfolios. If cash flows after initial recognition are realised in a way
that is different from the Company’s original expectations, the Company
does not change the classification of the remaining financial assets held
in that business model, but incorporates such information when
assessing newly originated financial assets going forward.

The business model of the Company for assets subsequently measured
at amortised cost category is to hold and collect contractual cash flows.
However, considering the economic viability of carrying the delinquent
portfolios on the books of the Company, it may enter into immaterial
and/or infrequent transactions to sell these portfolios to banks and/or
asset reconstruction companies without affecting the business model of
the Company.

After initial measurement, such financial assets are subsequently
measured at amortised cost on effective interest rate (EIR). For further
details, refer note no. 2.2(I)(a). The expected credit loss (ECL)
calculation for debt instruments at amortised cost is explained in
subsequent notes in this section.

(ii) Debt instruments at FVOCI

The Company subsequently classifies its financial assets as FVOCI,
only if both of the following criteria are met:

? the objective of the business model is achieved both by collecting
contractual cash flows and selling the financial assets; and

? Contractual terms of the asset give rise on specified dates to cash
flows that are Solely Payments of Principal and Interest (SPPI) on
the principal amount outstanding.

Debt instruments included within the FVOCI category are measured at
each reporting date at fair value with such changes being recognised in
other comprehensive income (OCI). The interest income on these assets
is recognised in profit or loss. The ECL calculation for debt instruments
at FVOCI is explained in subsequent notes in this section.

Debt instruments such as long-term investments in Government
securities to meet regulatory liquid asset requirement of the Company’s
deposit program are classified as FVOCI.

On derecognition of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from other comprehensive income to
profit or loss.

(iii) Debt instruments at FVTPL

The Company classifies financial assets which are held for trading under
FVTPL category. Held for trading assets are recorded and measured in
the Balance Sheet at fair value. Interest and dividend incomes are
recorded in Statement of Profit and Loss, according to the terms of the
contract, or when the right to receive the same has been established.
Gain and losses on changes in fair value of debt instruments are
recognised on net basis through profit or loss.

The Company’s investments into mutual funds, Government securities
(trading portfolio) and certificate of deposits for trading and short-term
cash flow management have been classified under this category.

(iv) Equity investments designated under FVOCI

All equity investments in scope of Ind AS 109 ‘Financial instruments’
are measured at fair value. The Company has strategic investments in
equity for which it has elected to present subsequent changes in the fair
value in other comprehensive income. The classification is made on
initial recognition and is irrevocable.

Derecognition of financial assets

The Company derecognises a financial asset (or, where applicable, a part
of a financial asset) when:

? The right to receive cash flows from the asset has expired; or

? The Company has transferred its right to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in
full without material delay to a third party under an assignment
arrangement and the Company has transferred substantially all the
risks and rewards of the asset. Once the asset is derecognised, the
Company does not have any continuing involvement in the same.

On derecognition of a financial asset in its entirety, the difference
between:

? the carrying amount (measured at the date of derecognition) and

? the consideration received (including any new asset obtained less
any new liability assumed) is recognised in profit or loss.

Financial assets subsequently measured at amortised cost are generally
held for collection of contractual cashflow. The Company on looking at
economic viability of certain portfolios measured at amortised cost may
enter into immaterial and/or infrequent transaction of sale of portfolio
which doesn’t affect the business model of the Company.

Reclassification of financial assets

The Company changes classification of its financial assets only on
account of changes in its business model for managing those financial
assets. Such reclassifications are given prospective impact as per the
principles laid down in Ind AS 109 ‘Financial Instruments.’

Impairment of financial assets

ECL are recognised for financial assets held under amortised cost, debt
instruments measured at FVOCI, and certain loan commitments as per
the Board approved policy.

Financial assets where no significant increase in credit risk has been
observed are considered to be in ‘stage 1’ for which a 12 months ECL
is recognised. Financial assets that are considered to have significant
increase in credit risk are considered to be in ‘stage 2’ and those which
are in default or for which there is objective evidence of impairment are
considered to be in ‘stage 3’. Life time ECL is recognised for stage 2
and stage 3 financial assets.

At initial recognition, allowance (or provision in the case of loan
commitments) is required for ECL towards default events that are
possible in the next 12 months, or less, where the remaining life is less
than 12 months.

In the event of a significant increase in credit risk, allowance (or
provision) is required for ECL towards all possible default events over
the expected life of the financial instrument (‘lifetime ECL’).

Financial assets (and the related impairment allowances) are written off
in full, when there is no realistic prospect of recovery.

Treatment of the different stages of financial assets and the methodology
of determination of ECL

(a) Credit impaired (stage 3)

The Company recognises a financial asset to be credit impaired and in
stage 3 by considering relevant objective evidence, primarily whether:

Contractual payments of either principal or interest are past due for more
than 90 days;

The loan is otherwise considered to be in default

Restructured loans where repayment terms are renegotiated as compared
to the original contracted terms due to significant credit distress of the
borrower are classified as credit impaired. Such loans continue to be in
stage 3 until they exhibit regular payment of renegotiated principal and
interest over a minimum observation of period, typically 12 months-
post renegotiation, and there are no other indicators of impairment.
Having satisfied the conditions of timely payment over the observation
period these loans could be transferred to stage 1 or 2 and a fresh
assessment of the risk of default be done for such loans.

Interest income is recognised by applying the effective interest rate to
the net amortised cost amount i.e., gross carrying amount less ECL
allowance.

(b) Significant increase in credit risk (stage 2)

An assessment of whether credit risk has increased significantly since
initial recognition is performed at each reporting period by considering
the change in the risk of default of the loan exposure. However, unless
identified at an earlier stage, 30 days past due is considered as an
indication of financial assets to have suffered a significant increase in
credit risk. Based on other indications such as borrower’s frequently
delaying payments beyond due dates though not 30 days past due are
included in stage 2 for mortgage loans.

The measurement of risk of defaults under stage 2 is computed on
homogenous portfolios, generally by nature of loans, tenors, underlying
collateral, geographies and borrower profiles. The default risk is
assessed using PD (probability of default) derived from past behavioural
trends of default across the identified homogenous portfolios. These past
trends factor in the past customer behavioural trends, credit transition
probabilities and macroeconomic conditions. The assessed PDs are then
aligned considering future economic conditions that are determined to
have a bearing on ECL.

(c) Without significant increase in credit risk since initial recognition
(stage 1)

ECL resulting from default events that are possible in the next 12 months
are recognised for financial instruments in stage 1. The Company has
ascertained default possibilities on past behavioural trends witnessed for
each homogenous portfolio using application/behavioural score cards
and other performance indicators, determined statistically.

(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, the estimation of ECL takes into account the
time value of 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 multiplying the PD, LGD 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 stage 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 any 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 realised and the time value
of money.

The Company recaliberates above components of its ECL model on a
periodical basis by using the available incremental and recent
information as well as assessing changes to its statistical techniques for
a granular estimation of ECL.

(b) Financial liabilities

Financial liabilities include liabilities that represent a contractual obligation to
deliver cash or another financial asset to another entity, or a contract that may
or will be settled in the entity’s own equity instruments. Few examples of
financial liabilities are trade payables, debt securities and other borrowings and
subordinated debts.

Initial measurement

All financial liabilities are recognised initially at fair value and, in the case of
borrowings and payables, net of directly attributable transaction costs. The
Company’s financial liabilities include trade payables, other payables, debt
securities and other borrowings.

Subsequent measurement

After initial recognition, all financial liabilities are subsequently measured at
amortised cost using the EIR method [Refer note no 2.2(I)(a)]. Any gains or
losses arising on derecognition of liabilities are recognised in the Statement of
Profit and Loss.

Derecognition

The Company derecognises a financial liability when the obligation under the
liability is discharged, cancelled or expired.

(c) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported
in the Balance Sheet only if there is an enforceable legal right to offset the
recognised amounts with an intention to settle on a net basis or to realise the
assets and settle the liabilities simultaneously.

(V) Investment in subsidiaries

Investment in subsidiaries is recognised at cost and are not adjusted to fair value
at the end of each reporting period as allowed by Ind AS 27 ‘Separate financial
statement’. Cost of investment represents amount paid for acquisition of the said
investment and a proportionate recognition of the fair value of shares granted to
employees of subsidiary under a group share based payment arrangement.

The Company assesses at the end of each reporting period, if there are any
indications that the said investment may be impaired. If so, the Company
estimates the recoverable value/amount of the investment and provides for
impairment, if any i.e. the deficit in the recoverable value over cost.

The company has not any subsidiary in the current reporting period.

(VI) Taxes

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, in accordance with the
Income Tax Act, 1961 and the Income Computation and Disclosure Standards
(ICDS) prescribed therein. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date.

Current tax relating to items recognised outside profit or loss is recognised in
correlation to the underlying transaction either in OCI or directly in other equity.

Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.

(ii) Deferred tax

Deferred tax is recognised using the Balance Sheet approach on temporary
differences between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised for deductible temporary differences to the
extent that it is probable that taxable profits will be available against which the
deductible temporary differences can be utilised.

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

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

Deferred tax relating to items recognised outside profit or loss is recognised
either in other comprehensive income or in other equity.

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

(VII) Property, plant and equipment

Property, plant and equipment are carried at historical cost of acquisition less

accumulated depreciation and impairment losses, consistent with the criteria

specified in Ind AS 16 ‘Property, plant and equipment’.

Depreciation on property, plant and equipment

1. Depreciation is provided on a pro rata basis for all tangible assets on
written-down methods over the useful life of assets.

2. Useful lives of assets are determined by the Management by an internal
technical assessment except where such assessment suggests a life
significantly different from those prescribed by Schedule II - Part C of
the Companies Act, 2013 where the useful life is as assessed and
certified by a technical expert.

3. Depreciation on addition to assets and assets sold during the year is
being provided for on a pro rata basis with reference to the month in
which such asset is added or sold as the case may be.

4. Assets having unit value up to Rs. 5,000 is depreciated fully in the
financial year of purchase of asset.

5. An item of property, plant and equipment and any significant part
initially recognised is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset)
is included under other income in the Statement of Profit and Loss when
the asset is derecognised.

6. Currently company have only salvage value of tangible assets and
management has decided not to charge depreciation on these assets
hence the salvage value of tangible assets shown on the face of the
balance sheets.

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

(VIII) Intangible assets and amortisation thereof

Intangible assets, representing software’s are initially recognised at cost and
subsequently carried at cost less accumulated amortisation and accumulated
impairment. The company has computer software and it depreciated as per
written down methods. Currently company has salvage value of these assets
hence management is decided not to charge depreciation on these assets and
salvage value of the assets are shown on the face of the Balance sheet.

(IX) Impairment of non-financial assets

An assessment is done at each Balance Sheet date to ascertain whether there is
any indication that an asset may be impaired. If any such indication exists, an
estimate of the recoverable amount of asset is determined. If the carrying value
of relevant asset is higher than the recoverable amount, the carrying value is
written down accordingly.

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Mar 31, 2015

1.1 Basis of Accounting

The Financial Statements are prepared under historical cost convention, on accrual basis, in accordance with the provisions of the Companies Act, 2013 and the accounting principles generally accepted in India and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules,2014.

1.2 Use of Estimate

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

1.3 Revenue Recognition

The Company follows the Prudential Norms for Assets Classification, Income Recognition, Accounting. Standards and provisioning for Bad and Doubtful debts as prescribed by the Reserve Bank of India for Non Banking Financial Companies.Since the Company is an NBFC its main income is Interest on Loans. The income is accounted on accrual basis.

1.4 Provisions and Contingencies

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

1.5 Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.6 Depreciation

Depreciation has been provided on Straight Line Method (SLM) at the rates and in the manner prescri -bed in Part C of Schedule II of the Companies Act, 2013 on pro-rata basis from the date assets have been put to use. Intangible Assets are amortised on Straight Line basis over the useful lives of the assets not exceeding 10 years.

1.7 Inventory

The company has nil inventory.

1.8 Employee Benefits

The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company. The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

1.9 Borrowing Cost

The Company does not have any borrowings, and therefore, this clause is not applicable.

1.10 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. During the year there is a short provsion in taxation to the extent of Rs 1,10,370/-.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent period are recognized as deferred tax assets or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realized. Deferred tax assets are recognized on carried forward of unabsorbed depreciation and tax losses only if there is virtual certainity that such deferred tax assets can be realized against future taxable profits.

1.11 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalents comprise cash and cash on

deposit with banks and corporations.

1.12 Cash Flow Statements

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.13 Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number

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Mar 31, 2014

1.1 General

''The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except as specifically stated otherwise. The financial statements are presented in Indian Currency rounded off to the nearest rupee.

1.2 Use of Estimate

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

1.3 Revenue Recognition

The Company follows the Prudential Norms for Assets Classification, Income Recognition, Accounting Standards and provisioning for Bad and Doubtful debts as prescribed by the Reserve Bank of India for Non Banking Financial Companies.S i n c e the Company is an NBFC its main income is Interest on Loans. The income is accounted on accrual basis.

1.4 Provisions and Contingencies

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

1.5 Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.6 Depreciation

Depreciation has been provided on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date assets have been put to use.

1.7 Inventory

Your company has nil inventory.

1.8 Employee Benefits

The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company. The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

1.9 Borrowing Cost

The Company does not have any borrowings, and therefore, this clause is not applicable.

1.10 Taxes on Income

''Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent period are recognized as deferred tax assets or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realized. Deferred tax assets are recognized on carried forward of unabsorbed depreciation and tax losses only if there is virtual certainity that such deferred tax assets can be realized against future taxable profits.

1.11 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations.

1.12 Cash Flow Statements

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.13 Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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Mar 31, 2013

1.1 General

''The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except as specifically stated otherwise. The financial statements are presented in Indian Currency rounded off to the nearest rupee.

1.2 Use of Estimate

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

1.3 Revenue Recognition

The Company follows the Prudential Norms for Assets Classification, Income Recognition, Accounting Standards and provisioning for Bad and Doubtful debts as prescribed by the Reserve Bank of India for Non Banking Financial Companies.

Since the Company is an NBFC its main income is Interest on Loans. The income is accounted on accrual basis.

1.4 Provisions and Contingencies

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

1.5 Fixed Assets_

Fixed Assets are stated at cost of acquisition as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. .

1.6 Depreciation

Depreciation has been provided on Straight Line Method (SLM) at the rates and in the manner prescri -bed in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date assets have been put to use.

1.7 Inventory

Your company has nil inventory.

1.8 Employee Benefits

The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

1.9 Borrowing Cost

The Company does not have any borrowings, and therefore, this clause is not applicable.

1.10 Taxes on Income

''Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent period are recognized as deferred tax assets or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realized. Deferred tax assets are recognized on carried forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits.

1.11 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations.

1.12 Cash Flow Statements

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.13Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

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Mar 31, 2012

1.1 General

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except as specifically stated otherwise.

1.2 Use of Estimate

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

1.3 Revenue Recognition

The Company follows the Prudential Norms for Assets Classification, Income Recognition, Accounting Standards and provisioning for Bad and Doubtful debts as prescribed by the Reserve Bank of India for Non Banking Financial Companies.

Since the Company is an NBFC its main income is Interest on Loans. The income is accounted on accrual basis.

1.4 Provisions and Contingencies

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

1.5 Fixed Assets

Fixed Assets are stated at cost of acquisition as reduced by accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.6 Depreciation

Depreciation has been provided on Straight Line Method (SLM) at the rates and in the manner prescribe -bed in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date assets have been put to use. Depreciation on Furniture in Leasehold premises is provided over the period of the lease.

1.7 Inventory

Inventories have been valued at cost or net realizable value which ever is lower.

1.8 Employee Benefits

The Statutory enactments relating to payment of Provident Fund, ESIC and Gratuity to employees are not applicable to the company. The company does not have any scheme for retirement benefits for its employee and as such no provision towards retirement benefits to employees is considered necessary.

1.9 Borrowing Cost

The Company does not have any borrowings, and therefore, this clause is not applicable.

1.10 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent period are recognized as deferred tax assets or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred assets can be realized. Deferred tax assets are recognized on carried forward of unabsorbed depreciation and tax losses only if there is virtual certainty that such deferred tax assets can be realized against future taxable profits.

1.11 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations.

1.12 Cash Flow Statements

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.13Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.

"In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders."

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Mar 31, 2010

A. The Company follows the Prudential Norms for Assets Classification, Income Recognition,

Accounting Standards, Provisioning for bad and doubtful debts as prescribed by the Reserve Bank of India for Non Banking Financial Companies.

b. Accounts have been prepared on Historical Cost and accrual basis except for government dues which are accounted for in the year of receipt of the relevant order.

c. Fixed Assets are stated at Cost less Depreciation. The Company capitalises all cost relating to acquisition and installation of fixed assets.

d. Depreciation on fixed assets is provided on prorata basis on the Written Down Value Method at the rates and on the basis as specified in Schedule XIV to the Companies Act, 1956.

e. Stock in trade in the case of Quoted Scrips is valued at lower of cost & market value based on the last

available quotation, whereby aggregate cost of all scrips is compared with their aggregate market value, category wise. In the case of Unquoted shares, the same is taken at lower of cost & breakup value.

f. Long Term Investments are stated at cost after deducting provisions made for permanent diminution in the value, if any. Current investments are stated at lower of cost & fair market value.

g. The cost of Investments/Stock in trade includes brokerage but does not include stamp duty & securities transaction tax which is charged to revenue.

h. Bonus entitlements are recognised on ex bonus dates without any acquisition cost.

i. Income tax expense comprises current tax and deferred tax charge or credit. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.

j. During the year the Company has incurred an expenses for issue of Warrants amounting to Rs.55,150/-. During the Year, the Company has amortised 1/5* Deferred Revenue Expenditure and the balance amount will be amortised in future years.

k The Company has availed a Line of Credit of Rs. 18.75 Crores from ECL Finance Ltd. And Rs. 5 Crores from Birla Global Finance Co. Ltd. Against the Shares of the Clients and Corporate Guarantee from Anugrah Stock & Broking Pvt. Ltd.