Usha Financial Services Ltd. कंपली की लेखा नीति

Mar 31, 2025

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation Of Financial Statements

The financial statements have been prepared and presented under historical cost convention
and accrual basis of accounting, unless otherwise stated, and in accordance with the
generally accepted accounting principles in India (Indian GAAP) and conform to the statutory
requirements, circulars, regulations and guidelines issued by Reserve Bank of India (RBI) from
time to time to the extent they have an impact on the financial statements and current
practices prevailing in India. The financial statements have been prepared to comply in all
material aspects with the Accounting Standards ("AS") notified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 to the
extent applicable. The Company follows the prudential norms for income recognition, asset
classification and provisioning as prescribed by the RBI for Non-deposit taking Non-Banking
Finance Companies (NBFC-ND).

2.2 Use of estimates

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

2.3 Revenue Recognition

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

I. Interest income is recognized in the statement of profit and loss on an accrual basis. In
case of Non-Performing Assets (NPA) interest income is recognised upon realisation as
per the RBI Guidelines. Interest accrued and not realised before the classification of the
asset as an NPA is reversed in the month in which the loan is classified as NPA.

II. Upfront /processing fees are recovered and recognised at the time of disbursement of

III. Interest income on other deposits are recognised on a time proportion basis. Income from
dividend is recognized in the statement of profit and loss when the right to receive is

IV. Profit / Loss on disposal of an investment is recognised at the time of such sale /
redemption and is computed based on weighted average cost

2.4 Tangible fixed assets, intangible fixed assets and intangible fixed assets under
development

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any.
The cost of fixed assets includes non-refundable taxes, duties, freight and other incidental
expenses incurred directly related to the acquisition and installation of the asset. Subsequent
expenditure on fixed assets after their purchase / completion is capitalized, only if such
expenditure results in an increase in the future benefits from such asset beyond its previously
assessed standard of performance.

The cost of intangible fixed assets not ready for the intended use at each balance sheet date is
disclosed as intangible fixed assets under development

2.5 Impairment

The Company determines periodically whether there is any indication of impairment of the
carrying amount of its assets. The recoverable amount (higher of net selling price and value in
use) is determined for an individual asset, unless the asset does not generate cash inflow that
are largely independent of those from other assets or group of assets. The recoverable
amounts of such asset are estimated, if any indication exists and impairment loss is
recognized wherever the carrying amount of the asset exceeds its recoverable amount. Where
it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.

2.6 Depreciation and Amortisation

Depreciation on tangible fixed assets is provided on pro-rata basis (i.e. from the date on which the
asset is ready to use) on written down value method. Depreciation on fixed assets is provided over
the useful lives of the asset, as estimated by the management based on internal technical
assessment. If the management’s estimate of the useful life of a fixed asset at the time of
acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that
envisaged, depreciation is provided at a higher rate based on the management’s estimate of the
useful life / remaining useful life. Pursuant to this policy, the estimated useful life of assets are as

2.7 Borrowing Costs

Borrowing costs include interest and ancillary costs that the Company incurs in connection with
the borrowings. Costs in connection with the borrowing of funds to the extent not directly related to
the acquisition of qualifying assets are charged to the Statement of Profit and Loss at the time of
availment of the loan.

2.8 Loan Orignation Costs

Brokerage, commission and other costs paid at the time of acquisition of loans are charged to the
Statement of Profit and Loss.

2.9 Earning Per share

Basic earnings per share is computed and disclosed using the weighted average number of
common shares outstanding during the year. Diluted earnings per share is computed and disclosed
using the weighted average number of common and dilutive common equivalent shares
outstanding during the year, except when the results would be anti-dilutive.

2.10 Income Tax

> Income-tax expense comprises current tax (i.e. amount of tax for the period determined in
accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects
of timing differences between accounting income and taxable income for the period). Income-tax
expense is recognized in statement of profit and loss except that tax expense relating to items
recognized directly in reserves is also recognized in those reserves.

> Current tax is measured at the amount expected to be paid to (recovered from) the taxation
authorities, using the applicable tax rates and tax laws. Deferred tax is recognized in respect of
timing differences between taxable income and accounting income i.e. differences that originate
in one period and are capable of reversal in one or more subsequent periods. The deferred tax
charge or credit and the corresponding deferred tax liabilities or assets are recognized using the
tax rates and tax laws 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 a virtual certainty
supported by convincing evidence that sufficient future taxable income will be available against
which such deferred tax assets can be realized. Deferred tax assets are reviewed as at each
balance sheet date and written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realized.

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Mar 31, 2024

Significant accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under historical cost convention and accrual basis of
accounting, unless otherwise stated, and in accordance with the generally accepted accounting principles in India
(Indian GAAP) and conform to the statutory requirements, circulars, regulations and guidelines issued by Reserve
Bank of India (RB!) from time to time to the extent they have an impact on the financial statements and current
practices prevailing in India. The financial statements have been prepared to comply in all material aspects with
the Accounting Standards ("AS") notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 to the extent applicable. The Company follows the prudential norms for
income recognition, asset classification and provisioning as prescribed by the RBI for Non-deposit taking Non¬
Banking Finance Companies (NBFC-ND).

2.2 Use of estimates

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

2.3 Revenue recognition:

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

I. Interest income is recognized in the statement of profit and loss on an accrual basis. In case of Non Performing Assets (NPA)
interest income is recognised upon realisation as per the RBI Guidelines, Interest accrued and not realised before the
classification of the asset as an NPA is reversed in the month in which the loan is classified as NPA.
ii. Upfront /processing fees are recovered and recognised at the time of disbursement of loan / receipt,
ill. interest income on other deposits are recognised on a time proportion basis. Income from dividend is recognized
in the statement of profit and loss when the right to receive is established,
iv. Profit / Loss on disposal of an investment is recognised at the time of such sale / redemption and is computed
based on weighted average cost

j.4 Tangible fixed assets, intangible fixed assets and intangible fixed assets under development

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes
non-refundable taxes, duties, freight and other incidental expenses incurred directly related to the acquisition and
installation of the asset. Subsequent expenditure on fixed assets after their purchase / completion is capitalized, only if such

expenditure results in an increase in the fiiture benefits from such asset beyond its previously assessed standard of
performance.

The cost of intangible fixed assets not ready for the intended use at each balance sheet date is disclosed as intangible fixed
assets under development.

2.5 Impairment

The Company determines periodically whether there is any indication of impairment of the carrying amount of its assets.
The recoverable amount (higher of net selling price and value in use) is determined for an individual asset, unless the asset
does not generate cash inflow that are largely independent of those from other assets or group of assets. The recoverable
amounts of such asset are estimated, if any indication exists and impairment loss is recognized wherever the canying
amount of the asset exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

2.6 Depreciation and Amortizalion:

Depreciation on tangible fixed assets is provided on pro-rata basis (i.e. from the date on which the asset is ready to use) on written
down value method. Depreciation on fixed assets is provided over the useful lives of the asset, as estimated by the management
based on mtemal technical assessment. If the management’s estimate of the useful life of a fixed asset at the time of acquisition of
the asset or of the remaining useful life on a subsequent review is shorter than that envisaged, depreciation is provided at a higher
rate based on the management’s estimate of the useful life / remaining useful life. Pursuant to this policy, the estimated useful life
of assets are as follows:

2.7 Borrowing costs

Borrowing costs include interest and ancillary costs that the Company incurs in connection with the borrowings. Costs in
connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged
to the Statement of Profit and Loss at the time of availment of the loan.

2.8 Loan origination costs

Brokerage, commission and other costs paid at the time of acquisition of loans are charged to the Statement of Profit and
Loss,

2.9 Earnings ^Der share:

Basic earnings per share is computed and disclosed using the weighted average number of common shares outstanding
during the year. Diluted earnings per share is computed and disclosed using the weighted average number of common and
dilutive common equivalent shares outstanding during the year, except when the results would be anti-dilutive.

2.10 Income taxes

• Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income-tax law)
and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income
for the period). Income-tax expense is recognized in statement of profit and loss except that tax expense relating to items
recognized directly in reserves is also recognized in those reserves.

• Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable
tax rates and tax laws. Deferred tax is recognized in respect of timing differences between taxable income and accounting
income i.e. differences that originate in one period and are capable of reversal in one or more subsequent periods. The
deterred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates and
tax laws 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 earned forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual
certainty supported by convincing evidence that sufficient future taxable income will be available against which such
deferred tax assets can be realized. Deferred tax assets are reviewed as at each balance sheet date and written down or
written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.