Accounting Policies of TCI Finance Ltd. Company

Mar 31, 2017

1 Corporate information

TCI Finance Limited ("the Company") is a public company domiciled in India. Its shares are listed in Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Company is a "Loan company" engaged in the business of Non Banking Financial Institution as defined in section 45I(a) of the Reserve Bank of India Act , 1934.

2 Significant Accounting Policies

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company are prepared on accrual basis, under historical cost convention. The Financial Statements of the Company have been prepared in accordance with G.A.A.P in India ("Indian GAAP") to comply with accounting standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act/ the Companies Act, 1956, as applicable. The accounting policies adopted in the preparation of financial statements are consistent with those of the preceding year.

2.2 Use of Estimates

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

2.3 Cash Flow Statement

The Cash Flow Statement is prepared under "Indirect method" in accordance with Accounting Standard-3 on Cash Flow Statements notified in section 133 of the Companies Act, 2013. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.4 Revenue Recognition

2.4.1 Lease Income

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its Guidance Note - "Accounting for Leases".

(ii) The Lease Equalization charge (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule II and that which is chargeable so as to write off the asset over the primary lease period.

2.4.2 Interest Income

Interest income is recognized on accrual basis except in case of non-performing assets. Overdue interest is recognized as income on realization.

2.5 Fixed Assets:

2.5.1 Tangible Assets: Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

2.5.2 Intangible Assets: Intangible assets are carried at cost less accumulated amortization and impairment losses, if any.

2.6 Depreciation and Amortization

Depreciable amount of assets is the cost of an asset, or other amount substituted for cost less its estimated residual value. Depreciation on tangible fixed assets has been provided on the straight line method as per the useful lives prescribed in schedule II to the Companies Act, 2013 .

Intangible assets are amortized, on the straight line method on the useful lives prescribed in schedule II to the Companies Act, 2013 .

2.7 Investments

Investments are classified as Long term and Current. Long term Investments are carried at cost less provision for other than temporary diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

2.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees Provident Fund Organization are charged to Statement of Profit and Loss when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

2.9 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM(US)-2011 dated January 17, 2011 issued by Reserve Bank of India.

2.10 Taxes:

2.10.1 Current Tax: Provision for current tax is made based on the taxable income computed for the year under the Income Tax Act, 1961.

2.10.2 Deferred Taxes: Deferred tax is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized only if there is a virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets are reviewed at each balance sheet date for their reliability.

2.11 Earnings Per Share:

Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

2.12 Provisions, Contingent liabilities and Contingent Assets:

The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure for Contingent liabilities is made when there is a possible obligation or present obligations that may, but probably will not, require an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.

(ii) Rights, Preferences and Restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 10/- per share. Each shareholder is eligible for one vote per share held.

In the event of liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(i) Current maturities of Long Term Borrowings have been disclosed under the head "Other Current Liabilities" (Refer Note No. 9)

(ii) Term Loans from Others

Term loan from Others carries interest at a variable rate based on the lender Retail Prime Lending Rate (RPLR), of 13.90% p.a and is repayable in 180 installments from date of loan viz., April 28, 2013. Presently, the loan carriers rate of interest of 13.65%. The loan is secured by pledge of Gati Ltd Shares 650,000 investments of the Company, personal guarantee of a director, pledge of property and Investments of a director and pledge of third party investments property.

8.1 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

Trade payable other than acceptances include certain dues to Micro and Small Enterprises, under the Micro, Small and Medium Enterprises Development Act, 2006 that have been determined based on the information available with the company and the required disclosures are given below:

12.1. 4,603,900 (March 31, 2016: 5,615,246) Equity Shares pledged with lenders as security for Long and Short Term Borrowings (Refer Note No.5 (ii) and 7.1), 805,000 (Previous year: 805,000) (Shares pledged with IFCI Venture capital limited towards loan availed by M/s Amrit Jal Ventures Private Limited and Nil (Previous year : 1,580,000) shares pledged with IDFC Bank Limited for loan availed by Gati Infrastructure Private Limited.)

12.2. During the previous year, the Company took a loan of Rs.5 Crores from Godavari Commercial Services Private Limited (Godavari) on the security of 10 Lakh equity shares of Gati Limited and at the request of Godavari the said shares were pledged with a third party. The said shares were invoked by the third party on default by Godavari without there being any default by the Company. The Company took necessary legal recourse for restoration of the pledged shares and in terms of the settlement arrived at, Godavari agreed to restore the said invoked shares. In view of the above, the said 10 Lakh equity shares in Gati Limited have been continued to be disclosed as long term investments.

12.3. During the previous year, the Company has pledged 15.80 Lakh shares of Gati Limited in favour of IDFC Bank Limited (IDFC) for facilities availed by M/ s Gati Infrastructure Private Limited (GIPL) on receipt of Letter of Comfort from M/s Amrit Jal Ventures Private Limited (AJVPL) being the holding company of GIPL. The said shares were invoked by IDFC due to default made by GIPL. As per the Letter of Comfort from AJVPL, it would restore such invoked shares to the Company. The company has taken necessary legal recourse for the restoration of the invoked shares. In view of the above, the invoked 15.80 Lakh equity shares in Gati Limited have been continued to be disclosed as long term investments.

12.4. Amrit Jal Ventures Private Limited (AJVPL), through its SPV''s is executing three power projects aggregating to 243 MW in Sikkim which are under various stages of construction and completion. Considering the stage of the projects and also the development towards entering into Power Purchase Agreement for 110MW Chuzhachen Project with State Discoms which is at the final stage, any diminution in the value of investment in AJVPL is temporary and no provision is considered necessary by the management.

12.5 Book value has been taken in the absence of Stock Exchange quotations

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Mar 31, 2016

Notes forming part of the Financial Statements for the year ended March 31, 2016_

1 Corporate information

TCI Finance Limited ("the Company") is a public company domiciled in India. Its shares are listed in Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Company is a "Loan company" engaged in the business of Non Banking Financial Institution as defined in section 45I (a) of the Reserve Bank of India Act , 1934.

2 Significant Accounting Policies

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company are prepared on accrual basis, under historical cost convention. The Financial Statements of the Company have been prepared in accordance with G.A.A.P in India ("Indian GAAP") to comply with accounting standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act/ the Companies Act, 1956, as applicable.

The accounting policies adopted in the preparation of financial statements are consistent with those of the preceding year.

2.2 Use of Estimates

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

2.3 Cash Flow Statement

The Cash Flow Statement is prepared under "Indirect method" in accordance with Accounting Standard-3 on Cash Flow Statements notified in section 133 of the Companies Act, 2013. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.4 Revenue Recognition

2.4.1 Interest Income

Interest income is recognized on accrual basis except in case of non-performing assets. Overdue interest is recognized as income on realization.

2.4.2 Other Income

Dividend income is accounted on an accrual basis when the Company''s right to receive the dividend is established. Income from Services is recognized on accrual basis.

2.5 Fixed Assets:

2.5.1 Tangible Assets: Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

2.5.2 Intangible Assets: Intangible assets are carried at cost less accumulated amortization and impairment losses, if any.

2.6 Depreciation and Amortization

Depreciable amount of assets is the cost of an asset, or other amount substituted for cost less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight line method as per the useful lives prescribed in schedule II to the Companies Act, 2013.

Intangible assets are amortized, on the straight line method on the useful lives prescribed in schedule II to the Companies Act, 2013.

2.7 Investments

Investments are classified as Long term and Current. Long term Investments are carried at cost less provision for other than temporary diminution, if any, in value of such Investments. Current Investments are carried at lower of cost and fair value.

2.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees Provident Fund Organization are charged to Statement of Profit and Loss when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

2.9 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of Investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM (US)-2011 dated January 17, 2011 issued by Reserve Bank of India.

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Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company are prepared on accrual basis, under historical cost convention. The Financial Statements of the Company have been prepared in accordance with G.A.A.P in India ("Indian GAAP") to comply with accounting standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act/ the Companies Act, 1956, as applicable.

The accounting policies adopted in the preparation of financial statements are consistent with those of the preceeding year.

2.2 Use of Estimates

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

2.3 Cash Flow Statement

The Cash Flow Statement is prepared under "Indirect method" in accordance with Accounting Standard-3 on Cash Flow Statements notified in section 133 of the Companies Act, 2013. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.4 Revenue Recognition

2.4.1 Interest Income

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

2.4.2 Other Income

Dividend income is accounted on an accrual basis when the Company's right to receive the dividend is established. Income from Services is recognised on accrual basis.

2.5 Fixed Assets:

2.5.1 Tangible Assets: Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

2.5.2 Intangible Assets: Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.

2.6 Depreciation and Amortisation

Depreciable amount of assets is the cost of an asset, or other amount substituted for cost less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight line method as per the useful lives prescribed in schedule II to the Companies Act, 2013 .

Intangible assets are amortised, on the straight line method on the useful lives prescribed in schedule II to the Companies Act, 2013 .

2.7 Investments

Investments are classified as Long term and Current. Long term Investments are carried at cost less provision for other than temporary diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

2.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees Provident Fund Organisation are charged to Statement of Profit and Loss when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

2.9 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM(US)-2011 dated January 17, 2011 issued by Reserve Bank of India.

2.10 Taxes :

2.10.1 Current Tax: Provision for current tax is made based on the taxable income computed for the year under the Income Tax Act, 1961.

2.10.2 Deferred Taxes: Deferred tax is recognised on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.11. Earnings Per Share:

Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

2.12. Provisions, Contingent liabilities liabilities and Contingent Assets:

The Company recognises provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure for Contingent liabilities is made when there is a possible obligation or present obligations that may, but probably will not, require an outflow of resources. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C) of the Companies Act, 1956. The Company follows Accrual System of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

2.2 Use of Estimates

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

2.3 Cash Flow Statement

The Cash Flow Statement is prepared under "Indirect method" as set out in Accounting Standard-3 on Cash Flow Statements notified in section 211(3C) of the Companies Act, 1956, 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.

2.4 Revenue Recognition

2.4.1 Lease Income

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its Guidance Note - "Accounting for Leases".

(ii) The Lease Equalization charge (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period.

2.4.2 Interest Income

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

2.4.3 Other Income

Dividend income is accounted on an accrual basis when the Company''s right to receive the dividend is established. Income from Services is recognised on accrual basis.

2.5 Fixed Assets:

Tangible fixed assets

Assets are stated at cost less accumulated depreciation after adjustment of the Lease Terminal Adjustment Account.

Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.

2.6 Depreciation and Amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions/deductions is calculated on prorata from the date of addition/ deduction.

2.7 Investments

Long-term investments are carried individually at cost less provision for diminution in value, other than temporary in the value of such investments.

2.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees Provident Fund Organisation are charged to Statement of Profit and Loss when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

2.9 Segment Reporting

The Company is mainly engaged in financing activities which constitute a single business segment. There are no separate geographical segments.

2.10 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM(US)-2011 dated January 17, 2011 issued by Reserve Bank of India.

2.11 Taxes on income

2.11.1 Current Tax : Provision for Current Tax is made based on the taxable income computed for the year under the Income Tax Act, 1961.

2.11.2 Deferred Tax : Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Deferred Tax Assets are recognised and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

2.12 Earnings Per Share

Basic Earnings Per Share is computed by dividing the Profit / (Loss) After Tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

2.13 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

(ii) Rights, Preferences and Restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 10/- per share. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the equity shareholders are eligible to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(i) Current maturities of Long Term Borrowings have been disclosed under the head "Other Current Liabilities" (Refer Note No. 8)

(ii) Debentures

13% Redeemable Non-Convertible Debentures are redeemable at par in two instalments within 2 years from date of allotment viz., November 28, 2010, i.e., Rs. 70,000,000/- on November 29, 2011 and Rs. 280,000,000/- on November 29, 2012. The rate of interest increased to 14% from November 28, 2011. The Debentures, secured by pledge of investments, personal guarantee of a director and pledge of third party investments and property, have been redeemed during the year.

(iii) Term Loans from Others

(a) Term loan from Others amounting to Rs. 230,000,000/- carries interest rate on a variable basis as its Retail Prime Lending Rate (RPLR), currently 13.90% p.a and is repayable in 180 instalments from date of loan viz., April 28, 2013. There has been an increase in interest rate to 14.15% from November, 2013 and to 14.25% from February, 2014. The loan is secured by pledge of investments, personal guarantee of a director and pledge of third party investments and property.

(b) Term loan from Others amounting to Rs. 22,500,000/- carries interest rate which is linked to Vijaya Bank base rate of 10.45%, currently 16% p.a and is repayable in 10 instalments after a moratorium of eight months from the date of loan agreement i.e, October 8, 2012 and December 29, 2012. The loan is secured by pledge of investments, personal guarantee of a director and pledge of third party investments.

(iv) The Company has defaulted in repayment of debentures and Term Loans in respect of the following :

7.1 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

According to the records available with the Company, there are no dues payable to entities that are classified as Micro, Small and Medium Enterprises Development Act, 2006 during the period. Hence disclosures, if any, relating to amounts unpaid as at the period end together with the interest paid / payable as required under the Act have not been given.

16.1 represents cost of 1,500,000 pledged shares of Gati Limited held as Investment which was invoked during the year by the pledgee. The Company has initiated legal action against the invocation. Pending final outcome of the action initiated, the cost of investment is presented as advance recoverable.

17.1 Employee Benefit Plans

a. Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 211,773/- (As at March 31, 2013Rs.216,975/-) for Provident Fund contributions and Rs. 106,500/- (As at March 31, 2013 Rs. 94,500/-) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

b. Defined benefit plans

Consequent to the application of Accounting Standard (AS) 15 "Employee Benefits" all employee benefits have been determined in accordance with the Standard. The gratuity liability as per Actuarial Valuation has been deposited with the group gratuity Fund before March 31,2014.

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Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C)of the Companies Act,1956. The Company follows Accrual System of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

1.2 Use of Estimates

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

1.3 Cash Flow Statement

The Cash flow statement is prepared under "Indirect method" as set out in Accounting Standard- 3 on Cash Flow Statements notified in section 211(3C) of the Companies Act ,1956, whereby Profit / (Loss) Before Extraordinary Items and Ta x 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.

1.4 Revenue Recognition

1.4.1 Lease Income

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its Guidance Note - "Accounting for Leases".

(ii) The Lease Equalization charge (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period.

1.4.2 Interest Income

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

1.4.3 Other Income

Dividend income is accounted on an accrual basis when the Company''s right to receive the dividend is established. Income from Services is recognised on accrual basis.

1.5 Fixed Assets:

Tangible fixed assets

Assets are stated at cost less accumulated depreciation after adjustment of the Lease Terminal Adjustment Account.

Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.

1.6 Depreciation and Amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on addition/deductions is calculated on prorata from the date of addition/ deduction.

1.7 Investments

Long-term investments are carried individually at cost less provision for diminution in value, other than temporary in the value of such investments.

1.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees

Provident Fund Organisation are charged to Statement of Profit and Loss when due. (ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred. (iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

1.9 Segment Reporting

The Company is mainly engaged in financing activities which constitute a single business segment. There are no separate geographical segments.

1.10 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM(US)-2011 dated 17th January, 2011 issued by Reserve Bank of India.

1.11 Taxes on income

1.11.1 Current Tax : Provision for Current Tax is made based on the taxable income computed for the year under the Income Tax Act, 1961.

1.11.2 Deferred Tax : Deferred Tax is accounted for by computing the tax effect of timing differences which arise during the year and reverse in subsequent periods. Deferred Tax Assets are recognised and carried forward only to the extent that there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized.

1.12 Earnings Per Share

Basic Earnings Per Share is computed by dividing the Profit / (Loss) After Tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

1.13 Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C)of the Companies Act,1956. The Company follows the Accrual System of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

1.2 Use of estimates

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

1.3 Cash flow statement

The Cash flow statement is prepared under "Indirect method" as set out in Accounting Standard- 3 on Cash Flow Statements notified in section 211(3C) of the Companies Act ,1956. 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.

1.4 Revenue recognition

1.4.1 Lease Income

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its guidance note "Accounting for Leases".

(ii) The Lease Equalization charges (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period.

1.4.2 Interest Income

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

1.4.3 Other Income

Dividend income is accounted on an accrual basis when the Company's right to receive the dividend is established. Income from Services is recognised on accrual basis.

1.5 Fixed Assets:

Tangible fixed assets

Assets are stated at cost less accumulated depreciation after adjustment of the Lease Terminal Adjustment Account.

Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.

1.6 Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on addition/deductions is calculated on prorata from the date of addition/ deduction.

1.7 Investments

Long-term investments are carried individually at cost less provision for diminution in value, other than temporary in the value of such investments.

1.8 Employee benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Government Provident Fund are charged to profit and loss account when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.

(iii) Compensated Absences- The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

1.9 Segment reporting

The Company is mainly engaged in financing activities which constitute a single business segment. There are no separate geographical segments.

1.10 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS 222CGM(US)2011 dated 17th January 2011 issued by Reserve bank of India.

1.11 Taxes on income

Provision for tax is made for both current and deferred taxes. Provision for current income tax is made on the current tax rates based on the working results of the year. The company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the accounts and in estimating its current tax provision. The effect on deferred taxes of a change in tax rate is recognized in the year in which the change is effected. Fringe Benefit Tax is determine on the basis of the Income Tax Act,1961.

1.12 Provision, Contingent liabilities & Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2011

1. BASIS OF ACCOUNTING

"The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C)of the Companies Act,1956. The Company follows the Accrual System of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

2. USE OF ESTIMATES:

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

3. REVENUE RECOGNITION:

3.1 LEASE INCOME:

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its guidance note "Accounting for Leases".

(ii) The Lease Equalization charges (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period.

3.2 OTHER INCOMES:

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

Dividend income is accounted on an accrual basis when the Company's right to receive the dividend is established.

Income from Services is recognised on accrual basis.

4. INVESTMENTS:

Long-term investments are stated at cost and provision for diminution in value, other than temporary, is considered wherever necessary.

5. RESERVE BANK OF INDIA PRUDENTIAL NORMS:

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments.

6. FIXED ASSETS:

Assets are stated at cost less depreciation after adjustment of the Lease Terminal Adjustment Account.

7. DEPRECIATION:

Depreciation is provided on Straight line method at rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on addition/deductions is calculated prorata from/to the date of addition/deduction.

8. EMPLOYEE BENEFITS:

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Government Provident Fund are charged to profit and loss account when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.

(iii) Compensated Absences- The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

9. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

10. TAXATION :

Provision for tax is made for both current and deferred taxes. Provision for current income tax is made on the current tax rates based on the working results of the year. The company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the accounts and in estimating its current tax provision. The effect on deferred taxes of a change in tax rate is recognized in the year in which the change is effected. Fringe Benefit Tax is determine on the basis of the Income Tax Act,1961.

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Mar 31, 2010

1. BASIS OF ACCOUNTING

The Financial Statements are prepared under historical cost convention on the basis of going concern and as per Accounting Standards notified under Section 211(3C)of the Companies Act,1956. The Company follows the Accrual System of Accounting and Prudential Norms prescribed by Reserve Bank of India consistently from year to year.

2 USE OF ESTIMATES:

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

3. REVENUE RECOGNITION:

3.1 LEASE INCOME:

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its guidance note "Accounting for Leases".

(ii) The Lease Equalization charges (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period.

3.2 OTHER INCOMES:

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

Dividend income is accounted on an accrual basis when the Companys right to receive the dividend is established.

Income from Services is recognised on accrual basis.

4 INVESTMENTS:

Long-term investments are stated at cost and provision for diminution in value, other than temporary, is considered wherever necessary.

5. RESERVE BANK OF INDIA PRUDENTIAL NORMS:

The company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments.

6. FIXED ASSETS:

Assets are stated at cost less depreciation after adjustment of the Lease Terminal Adjustment Account.

7. DEPRECIATION:

Depreciation is provided on Straight line method at rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on addition/deductions is calculated prorata from/to the date of addition/deduction.

a EMPLOYEE BENEFITS:

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Government Provident Fund are charged to profit and loss account when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation.

(iii) Actuarial gains/losses are immediately taken to the profit and loss account and are not deferred.

(iv) The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

9. PROVISION. CONTINGENT LIABILITIES & CONTINGENT ASSETS :

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

10. TAXATION:

Provision for tax is made for both current and deferred taxes. Provision for current income tax is made on the current tax rates based on the working results of the year. The company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the accounts and in estimating its current tax provision. The effect on deferred taxes of a change in tax rate is recognized in trie year in which the change is effected. Fringe Benefit Tax is determine on the basis of the Income Tax Act,1961.

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Mar 31, 2009

1. SYSTEM OF ACCOUNTING

The Company follows the Accrual System of Accounting and Prudential | Norms prescribed by Reserve Bank of India consistently from year to year.

2. REVENUE RECOGNITION A. LEASE INCOME

(i) The income from lease transactions is recognized on accrual basis after netting off the lease equalization charges as recommended by the Institute of Chartered Accountants of India in its guidance note "Accounting for Leases,

(ii)The Lease Equalization charges (debit or credit as the case may be in any particular year) represent the difference between the Depreciation as per Schedule XIV and that which is chargeable so as to write off the asset over the primary lease period,

3. INVESTMENTS Investments are shown at cost which includes brokerage and stamp charges,

4. FIXED ASSETS Assets are stated at cost less depreciation after adjustment of the Lease Terminal Adjustment Account.

5. DEPRECIATION

Depreciation is provided on Straight line method at rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on addition/ deductions is calculated pro-rata from/to the date of addition/deduction.

6. EMPLOYEE BENEFITS

Contribution to Provident Fund and Superannuation Fund is charged to Profit and Loss Account. Provision for gratuity and other long term employee benefits is accounted on accrual basis, as per the requirement of AS -15 . on "Employee Benefits"

7. TAXATION

Provision for tax is made for both current and deferred taxes. Provision for current income tax is made on the current tax rates based on the working results of the year. The company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the accounts and in estimating its current tax provision. The effect on deferred taxes of a change in tax rate is recognized in the year in which the change is effected. Fringe Benefit Tax is determine on the basis of the Income Tax Act.1961