BCL Enterprises Ltd. कंपली की लेखा नीति

Mar 31, 2025

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.

2.1 Income

(i) Interest income

The Company recognises interest income using Effective Interest Rate (EIR) on all financial assets
subsequently measured at 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 recognises 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 [as set out in note no.
2.4(i)] regarded as ‘stage 3’, 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 [as outlined
in note no. 2.4(i)], 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.

(ii) 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.

(iii) 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 fair value of the consideration received
or receivable.

(a) Fees and commission

The Company recognises service and administration charges towards rendering of additional services to
its loan customers on satisfactory completion of service delivery.

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

"Distribution income is earned by selling of services and products of other entities under distribution
arrangements. The income so earned is recognised on successful sales 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.

II

(b) Net gain on fair value changes

Financial assets are subsequently measured at fair value through profit or loss (FVTPL) or fair value
through other comprehensive income (FVOCI), as applicable. The Company recognises gains/losses on
fair value change of financial assets measured as FVTPL and realised gains/losses on derecognition of
financial asset measured at FVTPL and FVOCI.

(c) Sale of services

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 or 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 in the service asset is recognised as interest income in line with Ind AS 109
‘Financial instruments’.

Other revenues on sale of services are recognised as per Ind AS 115 ‘Revenue from Contracts with
Customers’ as articulated above in ‘other revenue from operations’.

(d) Recoveries of financial assets written off

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.

(iv) Taxes

Incomes are recognised net of the Goods and Services Tax, wherever applicable

2.2 Expenditures

(i) Finance costs

Borrowing costs on financial liabilities are recognised using the EIR [refer note no. 2.1(i)].

(ii) Fees and commission expenses

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.

(iii) Taxes

Expenses are recognised net of the Goods and Services Tax/Service Tax, except where credit for the
input tax is not statutorily permitted.

2.3 Cash and cash equivalents

Cash and cash equivalents include cash on hand, 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.

2.4 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.

(i) 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.

Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into four categories:

(a) Debt instruments at amortised cost

(b) Debt instruments at FVOCI

(c) Debt instruments at FVTPL

(d) Equity instruments designated at FVOCI

(a) 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 in the books of the Company, it may sell these portfolios to banks and/or asset
reconstruction companies.

After initial measurement, such financial assets are subsequently measured at amortised cost on effective
interest rate (EIR). For further details, refer note no. 2.1(i). The expected credit loss (ECL) calculation
for debt instruments at amortised cost is explained in subsequent notes in this section.

(b) 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 and mortgage loans portfolio where the Company
periodically resorts to partially selling the loans by way of assignment to willing buyers are classified as
FVOCI.

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

(c) 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 interest income and dividend income, respectively 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.

(d) 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.

All fair value changes of the equity instruments, excluding dividends, are recognised in OCI and not
available for reclassification to profit or loss, even on sale of investments. Equity instruments at FVOCI
are not subject to an impairment assessment.

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 have 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.

The Company transfers its financial assets through the partial assignment route and accordingly
derecognises the transferred portion as it neither has any continuing involvement in the same nor does it
retain any control. If the Company retains the right to service the financial asset for a fee, it recognises
either a servicing asset or a servicing liability for that servicing contract. A service liability in respect of
a service is recognised at fair value if the fee to be received is not expected to compensate the Company
adequately for performing the service. If the fees to be received is expected to be more than adequate
compensation for the servicing, a service asset is recognised for the servicing right at an amount
determined on the basis of an allocation of the carrying amount of the larger financial asset.

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.

Impairment of financial assets

ECL are recognised for financial assets held under amortised cost, debt instruments measured at FVOCI,
and certain loan commitments.

Financial assets where no significant increase in credit risk has been observed are considered to be in
‘stage 1’ and for which a 12 month 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 an objective evidence of impairment are considered to be in ‘stage 3’. Lifetime 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 loss 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 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 EIR 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.

Company has incurred any loss of assets or Interest Income thereon in last 3 Financial years, therefore
expected credit loss is assumed as per RBI Prudential Norms on Prudent Basis.

"Provisions involving substantial degree of estimation in measurement are recognized 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 recognized but are disclosed in the notes. Contingent assets are neither
recognized nor disclosed in the financial statements.

Provision for non-performing assets is recorded at rates which are equal to or higher than the rates
specified by Reserve Bank of India in their guidelines on prudential norms. The rates used by the
Company are as follows:"

• Provision for Non-Performing Assets

• Provision for standard and non-performing assets

• In accordance with Prudential Norms, contingent provision at 0.25% has been created on
outstanding standard assets.

(ii) Financial liabilities

Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another
financial assets to another entity, or a contract that may or will be settled in the entities 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 recognized 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 [Refer note no. 2.1(i)]. Any gains or losses arising on de recognition of liabilities are recognized in
the Statement of Profit and Loss.

Derecognition

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

(iii) 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 recognized amounts with an intention to settle on
a net basis or to realize the assets and settle the liabilities simultaneously.

2.5 Investment in subsidiaries

Investment in subsidiaries is recognized at cost and are not adjusted to fair value at the end of each
reporting period. Cost of investment represents amount paid for acquisition of the said investment.

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.

2.6 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 recognized outside profit or loss is recognized 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.

2.7 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’.

(a) Depreciation is provided on a pro-rata basis for all tangible assets on straight line method over
the useful life of assets, except buildings which is determined on written down value method.

(b) 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.

(c) 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.

(d) 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.

2.8 Intangible assets and amortisation thereof

Intangible assets, representing softwares are initially recognized at cost and subsequently carried at cost
less accumulated amortisation and accumulated impairment. The intangible assets are amortised using
the straight line method over a period of five years, which is the Management’s estimate of its useful life.
The useful lives of intangible assets are reviewed at each financial year end and adjusted prospectively,
if appropriate.

2.9 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

2.10 Provisions and contingent liabilities

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

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

2.11 Foreign currency translation

The Company''s financial statements are presented in Indian Rupee, which is also the Company''s functional
currency.

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of the
transaction.

Conversion

Foreign currency monetary items are re-translated using the exchange rate prevailing at the reporting date.
Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.

Exchange differences

All exchange differences are accounted in the Statement of Profit and Loss.

2.12 Fair value measurement

The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.

Fair value is the price that would be received against sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place in the
accessible principal market or the most advantageous accessible market as applicable.

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

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input
that is significant to the fair value measurement as a whole. For a detailed information on the fair value
hierarchy, refer note no. 27.

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

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy.

2.13 Unless specifically stated to be otherwise, these policies are consistently followed

All financial instruments for which fair value is recognised or disclosed are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is insignificant to the fair
value measurements as a whole.

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : valuation techniques for which the lowest level inputs that has a significant effect on the fair
value measurement are observable, either directly or indirectly.

Level 3 : valuation techniques for which the lowest level input which has a significant effect on fair
value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company''s assets and
liabilities, other than those whose fair values are close approximations of their carrying values.

For cash and cash equivalents, trade receivables, other receivables, short term borrowing, trade
payables and other current financial liabilities the management assessed that their fair value is
approximate their carrying amounts largely due to the short-term maturities of these instruments.

1 Other Disclosure as per amendment in Schedule-III dated 24th March, 2021.

a) There are no proceedings has been initiated or pending against the entity under the Benami
Transactions (Prohibitions) Act, 1988.

b) Compliance with approved Scheme(s) of Arrangements

There are none Scheme of Arrangements has been approved by the Competent Authority in terms of
sections 230 to 237 of the Companies Act, 2013.

c) Corporate Social Responsibility Expenditure

The provision of Corporate Social Responsibility under section 135 of the Act is applicable to the
company and the company has expended Rs. 17,00,000/- during the year.

d) Details of Crypto Currency or Virtual Currency

The company has not entered in any transaction relating to Crypto Currency or Virtual Currency
during the year.

e) Relationship with Struck off Companies:

The entity has not entered into any transaction with such entities whose name has been stuck off u/s
248 of the Act.

f) Utilization of Borrowings

No borrowings from banks and financial institutions were taken during the year other than OD Limit
on Fixed deposits held as Current Assets.

g) Willful Defaulter

The company has not declared as wilful defaulter.

h) Compliance with number of layers of companies

The company has been complied with the provision relating to layers of companies.

i) Registration of charges or satisfaction with Registrar of Companies:

The company has registered all the charges with Registrar of Companies within the statutory period.

j) Undisclosed income

There is no such income which has not been disclosed in the books of accounts. No such income is
surrendered or disclosed as income during the year in the tax assessments under Income Tax Act,
1961.

37. In the opinion of the Board, all Current Assets, Loans & Advances (Except where indicated otherwise)
collectively have a value on realisation in the ordinary course of business at least equal to the amount
at which they are stated.

38. Loans & Advances as appearing on the assets side of the balance sheet are subject to confirmation.
Any adjustments thereof shall be made on final reconciliation.

39. Provision regarding Provident fund and Gratuity Act, 1972 are not applicable to the company

during the year under reference.

40. The company is engaged in the business of non-banking financial activity. Since all the activities relate
to main activity, in the opinion of the management, there is only one business segment in terms of Ind
AS-108 on Operating Segment issued by ICAI.

41. Referring to Note No. 42 of the financial statements for the year ended March 31, 2022, the company
has received notice dated 02-06-2021 from Directorate of Enforcement, Hyderabad in which this
Central Investigating Agency had sought certain clarifications regarding business transactions during
the year 2020-21.

As per the management, the company had provided necessary details as required by the Central
Investigating Agency. No further communication ha been received from the Central Investigating
Agency.

The management is of an opinion that this is an informative investigation and does not have any
material financial obligation on the company

During the Year Directorate of Enforcement have taken a sum of Rs.19,053/- from one of the Bank
accounts of the company. No details / documents have been received by the company in this matter.
The same has been shown as recoverable. Necessary adjustments shall be made on final disposal of
the matter.

42. Certain Parties to whom Loans have been given are either not paying interest nor they have provided
interest on our account in their books of account as per confirmations received. Necessary efforts by
the company is being made to recover the principal amount along with interest. The total amount of
interest is not ascertained. Interest whenever received shall be adjusted in the books of account
accordingly.

43. Related Party Disclosures:

In accordance with the Accounting Standards (Ind AS-24) on Related Party Disclosure, where control
exists and where key management personnel are able to exercise significant influence and, where
transactions have taken place during the year, along with description of relationship as identified, are
given below:-

vii. Disclosure of complaints : The company has not received any complaints from customers and from

the office of ombudsman during the current year.

In terms of our report of even date annexed For and on behalf of the Board

For Krishan Rakesh & Co. BCL Enterprises Limited

Chartered Accountants
Firm Regn No. 009088N

Sd/- Sd/- Sd/-

KK. Gupta Mahendra Kumar Sharda Umesh Kumar Bajaj

Place: Delhi (Partner) Managing Director Director

Date: 29/05/2024 (m. No. 087891) (DIN: 00053042) (DIN: 02968410)

Sd/- Sd/-

Kishore Kargeti Shyam Lal

Chief Financial Officer Company Secretary

(PAN: AQZPK6943M) & Compliance

Officer

(M. No. A29993)

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Mar 31, 2015

Basis of preparation of financial statements

The financial statements of the Company are prepared and presented under the historical cost convention on the accrual basis of accounting, as a going concern and in accordance with the Companies (Accounting Standards) Rules, 2006 notified by the Central Government, which as per clarification issued by the Ministry of Corporate Affairs continue to apply under Section 133 of the Companies Act ,2013 (which has superseded section 211 (3C) of the Companies Act 1956, w.e.f 12 September 2013),the other provisions of the Companies Act 1956 ( including the new notified sections under Companies Act, 2013, to the extent applicable).The financial statements are presented in Indian rupees rounded off to the nearest thousand. The financial statements are presented as per Revised Schedule III to the Companies Act, 2013. All assets and liabilities have been classified as current or non- current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013.

a. Current and non- current classification

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of assets and liabilities.

Assets

An asset is classified in to current when it satisfies any of the following criteria:

It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non- current financial assets.

All other assets are classified as non - current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

* It is expected to be settled in the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* The Company does not have unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include the current portion of non- current financial liabilities.

All other liabilities are classified as non - current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

b. Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. The management believes that the estimates made in the preparation of the financial statements are prudent and reasonable.

c. Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost of acquisition is inclusive of freight inward, duties, taxes and other directly attributable expenses incurred to bring the assets to their working condition for intended use.

Intangible fixed assets purchased comprising computer software, are stated at acquisition cost less accumulated amortization and impairment loss, if any. Intangible fixed assets are capitalized where it is expected to provide future enduring economic benefits. Capitalization costs include license fees and cost of implementation/system integration services. The costs are capitalized in the year in which the software is fully implemented for use.

d. Depreciation and amortization

Depreciation on tangible fixed assets is provided on written down value method, at rates specified in Schedule XIV to the Companies Act, 1956.

Depreciation is calculated on pro-rata basis from the date of additions, except in case of assets costing Rs. 5,000 or less, where each such asset is fully depreciated in the year of purchase. Depreciation on assets sold / discarded during the year is provided till the date of such sale / disposal.

e. Revenue recognition

Interest on loans is recognized in the Statement of Profit and Loss on an accrual basis, except in the case of non-performing assets where it is recognized upon realization in accordance with the prudential norms of the RBI

f. Income-tax expense

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities and / or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainly of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and are written down or written- up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

g. Transactions in foreign currency

Transactions in foreign currency are recorded at the exchange rates prevailing at the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currencies and remaining unsettled as at the balance sheet date is translated using the closing exchange rates on that date and the resultant net exchange difference is recognized in the Statement of Profit and Loss.

h. Earnings/ (loss) per share

Basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) for the year attributable to equity shareholders by using the weighted average number of equity shares outstanding during the year.

i. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.

j. Provision for Non-Performing Assets

Provision for standard and non-performing assets

* In accordance with Prudential Norms, contingent provision at 0.25% has been created on outstanding standard assets

* In accordance with Para 10 of Prudential Norms, the Company has shown provision for loans under 'Provisions' forming part of 'Current liabilities and provisions'

Provision for non-performing assets is recorded at rates which are equal to or higher than the rates specified by Reserve Bank of India in their guidelines on prudential norms. The rates used by the Company are as follows:

Period of Rates as per Asset Classification Arrears Company (in Months) percentage of Portfolio

Standard 0 - 1 0.25

Substandard 1 - 2 10

Substandard 2 - 3 25

Doubtful 3 - 4 50

Loss Above 4 100

1. As per regulation 6 of NBFC Prudential Norms (Reserve Bank) Directions, 1998 regarding accounting for investment:

a. The company value its current investments in unquoted equity shares at cost or breakup value, whichever is less

b. The Company values its long-term investment in unquoted equity shares in accordance with the accounting standard issued by ICAI. The Institute of Chartered Accountant of India has issued Accounting Standard " AS-13" pertaining to Accounting for investment.

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Mar 31, 2012

A. Basis of preparation of financial statements

The financial statements of the Company are prepared and presented under the historical cost convention on the accrual basis of accounting, as a going concern and in accordance with the Companies (Accounting Standards) Rules, 2006 notified by the Central Government, generally accepted accounting principles in India ('GAAP') and the provisions of the Companies Act, 1956, as applicable to the Company and applied consistently.

This is the first year of application of the revised schedule VI to the Companies act, 1956 for the preparation of the financial statements of the Company. The revised schedule VI introduces some significant conceptual changes as well as new disclosures. These include classification of all assets and liabilities into current and non- current. The previous year figures have also undergone a major reclassification to comply with the requirements of revised schedule VI.

b. Current and non- current classification

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of assets and liabilities.

Assets

An asset is classified in to current when it satisfies any of the following criteria:

* It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

* It is held primarily for the purpose of being traded,

* It is expected to be realized within 12 months after the reporting date; or

* it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non- current financial assets.

All other assets are classified as non — current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

* It is expected to be settled in the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* The Company does not have unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include the current portion of non- current financial liabilities.

All other liabilities are classified as non - current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

c. Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. The management believes that the estimates made in the preparation of the financial statements are prudent and reasonable.

d. Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost of acquisition is inclusive of freight inward, duties, taxes and other directly attributable expenses incurred to bring the assets to their working condition for intended use.

Intangible fixed assets purchased comprising computer softwares, are stated at acquisition cost less accumulated amortization and impairment loss, if any. Intangible fixed assets are capitalized where it is expected to provide future enduring economic benefits. Capitalization costs include license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the software is fully implemented for use.

e. Depreciation and amortisation

Depreciation on tangible fixed assets is provided on written down value method, at rates specified in Schedule XIV to the Companies Act, 1956.

Depreciation is calculated on pro-rata basis from the date of additions, except in case of assets costing Rs. 5,000 or less, where each such asset is fully depreciated in the year of purchase. Depreciation on assets sold / discarded during the year is provided till the date of such sale / disposal.

f. Revenue recognition

Interest on loans is recognised in the Statement of Profit and Loss on an accrual basis, except in the case of non-performing assets where it is recognized upon realization in accordance with the prudential norms of the RBI

g. Income-tax expense

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities and / or assets are recognized using the tax rates that have been enacted or substantively enacted' by the Balance Sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainly of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and are written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

h. Transactions in foreign currency

Transactions in foreign currency are recorded at the exchange rates prevailing at the date of the transaction. Exchange differences, arising on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currencies and remaining unsettled as at the balance sheet date is translated using the closing exchange rates on that date and the resultant net exchange difference is recognized in the Statement of Profit and Loss.

i. Earnings/ (loss) per share

Basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) for the year attributable to equity shareholders by using the weighted average number of equity shares outstanding during the year.

j. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.

k. Provision for Non-Performing Assets

Provision for standard and non-performing assets

* In accordance with Prudential Norms, contingent provision at 0.25% has been created on outstanding standard assets

* In accordance with Para 10 of Prudential Norms, the Company has shown provision for loans under 'Provisions' forming part of Current liabilities and provisions'

Provision for non-performing assets is recorded at rates which are equal to or higher than the rates specified by Reserve Bank of India in their guidelines on prudential norms. The rates used by the Company are as follows:

Asset Classification Period of Rates as per Arrears Company (in Months) percentage of Portfolio

Standard 0-1 0.25



Substandard 1-2 10

Substandard 2-3 25



Doubtful 3-4 50

Loss Above 4 100

L. As per regulation 6 of NBFC Prudential Norms (Reserve Bank) Directions, 1998 regarding accounting for investment:

a. The company value its current investments in unquoted equity shares at cost or breakup value, whichever is less

b. The Company values its long-term investment in unquoted equity shares in accordance with the accounting standard issued by ICAI. The Institute of Chartered .Accountant of India has issued Accounting Standard " AS-13" pertaining to Accounting for investment