Accounting Policies of SI Capital & Financial Services Ltd. Company

Mar 31, 2025

5 Significant accounting policies

5.1 Financial instruments

(i) Classification of financial instruments

The Company classifies its financial assets into the following measurement categories:

1. Financial assets to be measured at amortised cost

2. Financial assets to be measured at fair value through other comprehensive income

3. Financial assets to be measured at fair value through profit or loss account

The classification depends on the contractual terms of the financial assets’ cash flows and the Company’s business model
for managing financial assets.

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 business model is assessed on the basis of aggregated portfolios based on observable
factors. These factors include:

? Reports reviewed by the entity''s key management personnel on the performance of the financial assets

? The risks impacting the performance of the business model (and the financial assets held within that business
model) and its management thereof

? The compensation of the managing teams (for example, whether the compensation is based on the fair value of the assets
managed or on the contractual cash flows collected)

? The expected frequency, value and timing of trades.

The business model assessment is based on reasonably expected scenarios without taking ''worst case'' or ''stress case’
scenarios into account.

The Company also assesses the contractual terms of financial assets on the basis of its contractual cash flow characteristics
that are solely for the payments of principal and interest on the principal amount outstanding.

‘Principal’ is defined as the fair value of the financial asset at initial recognition and may change over the life of the
financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).

In making this assessment, the Company considers whether the contractual cash flows are consistent with a basic lending
arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and
a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk
or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at
fair value through profit or loss.

The Company classifies its financial liabilities at amortised costs unless it has designated liabilities at fair value through the
profit and loss account or is required to measure liabilities at fair value through profit or loss such as derivative liabilities.

(ii) Financial assets measured at amortised cost

These Financial assets comprise bank balances, Loans and other financial assets.

Financial Assets with contractual terms that give rise to cash flows on specified dates, and represent solely payments of
principal and interest on the principal amount outstanding; and are held within a business model whose objective is achieved
by holding to collect contractual cash flows are measured at amortised cost.

S.I.Capital & Financial Services Limited

Notes to Standalone Financial Statements for the year ended 31 March 2025

These financial assets are initially recognised at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or
disposal of a financial asset or a financial liability.

(iii) Financial assets measured at fair value through profit or loss

Items at fair value through profit or loss comprise:

• Investment in equity shares held for trading;

• Items specifically designated as fair value through profit or loss on initial recognition; and

• debt instruments with contractual terms that do not represent solely payments of principal and interest.

Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs
recognised in the statement of profit and loss as incurred. Subsequently, they are measured at fair value and any gains or
losses are recognised in the statement of profit and loss as they arise.

Financial instruments held for trading

A financial instrument is classified as held for trading if it is acquired or incurred principally for selling or repurchasing in
the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence
of short-term profit taking, or it is a derivative not designated in a qualifying hedge relationship.

Trading derivatives and trading securities are classified as held for trading and recognised at fair value.

(iv) Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed funds are subsequently measured at amortised cost. Amortised
cost is calculated by taking into account any discount or premium on issue funds, and transaction costs that are an integral
part of the Effective Interest Rate (EIR).

(v) Recognition and derecognition of financial assets and liabilities

A financial asset or financial liability is recognised in the balance sheet when the Company becomes a party to the
contractual provisions of the instrument, which is generally on trade date. Loans and receivables are recognised when
cash is advanced (or settled) to the borrowers. Financial assets at fair value through profit or loss are recognised initially
at fair value. All other financial assets are recognised initially at fair value plus directly attributable transaction costs.

The Company derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its rights
to receive contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership are transferred. Any interest in transferred financial assets that is created or retained by the Company is
recognised as a separate asset or liability. A financial liability is derecognised from the balance sheet when the Company
has discharged its obligation or the contract is cancelled or expires.

(vi) Impairment of financial assets

The Company recognises impairment allowance for expected credit loss on financial assets held at amortised cost.

The Company recognises loss allowances (provisions) for expected credit losses on its financial assets (including non-fund
exposures) that are measured at amortised costs or at fair value through other comprehensive income account.

The Company applies a three-stage approach to measuring expected credit losses (ECLs) for the Loan assets that are not
measured at fair value through profit or loss. No ECL is recognised on equity investments. Financial assets migrate through
the following three stages based on the change in credit risk since initial recognition:

Stage 1: 12-months ECL

For exposures where there has not been a significant increase in credit risk since initial recognition and that are not credit
impaired upon origination, the portion of the lifetime ECL associated with the probability of default events occurring within
the next 12 months is recognised.

Stage 2: Lifetime ECL - not credit impaired

For exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired,
a lifetime ECL (i.e. reflecting the remaining lifetime of the financial asset) is recognised.

Stage 3: Lifetime ECL - credit impaired

Exposures are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future
cash flows of that asset have occurred. For exposures that have become credit impaired, a lifetime ECL is recognised and
interest revenue is calculated by applying the effective interest rate to the amortised cost (net of provision) rather than the
gross carrying amount.

Determining the stage for impairment

At each reporting date, the Company assesses whether there has been a significant increase in credit risk for exposures since
initial recognition by comparing the risk of default occurring over the expected life between the reporting date and the date
of initial recognition. The Company considers reasonable and supportable information that is relevant and available
without undue cost or effort for this purpose.

This includes quantitative and qualitative information and also, forward-looking analysis.

An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period, asset quality
improves and also reverses any previously assessed significant increase in credit risk since origination, then the loss
allowances reverts from lifetime ECL to 12-months ECL.

The loss allowances for these financial assets is based on a 12-months ECL.

When an asset is uncollectible, it is written off against the related allowance. Such assets are written off after all the
necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of
amounts previously written off reduce the amount of the allowances in the profit and loss statement.

The Company assesses whether the credit risk on an exposure has increased significantly on an individual or collective
basis. For the purposes of a collective evaluation of impairment, financial instruments are grouped on the basis of shared
credit risk characteristics, taking into account instrument type, credit risk ratings, date of initial recognition, remaining term
to maturity, industry, geographical location of the borrower and other relevant factors.

Measurement of ECLs

ECLs are derived from unbiased and probability-weighted estimates of expected loss, and are measured as follows:

• Financial assets that are not credit-impaired at the reporting date: as the present value of all cash shortfalls over the
expected life of the financial asset discounted by the effective interest rate. The cash shortfall is the difference between the
cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive.
The Company has grouped its various financial assets in to pools containing loans bearing homogeneous risks
characteristics. The probability of default for the pools are computed based on the historical trends, adjusted for any forward
looking factors. Similarly the Company computes the Loss Given Default based on the recovery rates.

• Financial assets that are credit-impaired at the reporting date: as the difference between the gross carrying amount and
the present value of estimated future cash flows discounted by the effective interest rate.

Collateral Valuation

To mitigate its credit risks on financial assets, the Company seeks to use collateral, where possible. The collateral comes in
various forms, such as movable and immovable assets, guarantees, , etc. However, the fair value of collateral affects the
calculation of ECLs. To the extent possible, the Company uses active market data for valuing financial assets held as
collateral. Other financial assets which do not have readily determinable market values are valued using models. Non¬
financial collateral, such as vehicles, is valued based on data provided by third parties or management judgements.

Collateral repossessed

In its normal course of business whenever default occurs, the Company may take possession of properties or other assets in
its retail portfolio and generally disposes such assets through auction, to settle outstanding debt. Any surplus funds are
returned to the customers/obligors. As a result of this practice, assets under legal repossession processes are not recorded
on the balance sheet.

(vii) Write-offs

The Company reduces the gross carrying amount of a financial asset when the Company has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof. This is generally the case when the Company determines that
the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts
subjected to write-offs. Any subsequent recoveries against such loans are credited to the statement of profit and loss.

(viii) Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the company takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. The Financial assets and liabilities are presented in ascending order of their
liquidity. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within
the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as value in
use in Ind AS 36.

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

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

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

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

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred.

5.2 Revenue from operations

(i) Interest Income

Interest income is recognised by applying the Effective Interest Rate (EIR) to the gross carrying amount of financial
assets other than credit-impaired assets and financial assets classified as measured at FVTPL.

The EIR in case of a financial asset is computed

a. As the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the gross carrying amount of a financial asset.

b. By considering all the contractual terms of the financial instrument in estimating the cash flows

c. Including all fees received between parties to the contract that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash flows is recognised in interest income with the corresponding
adjustment to the carrying amount of the assets.

(ii) Dividend Income

Dividend income is recognised

a. When the right to receive the payment is established,

b. it is probable that the economic benefits associated with the dividend will flow to the entity and

c. the amount of the dividend can be measured reliably.

(iii) Fees & Commission Income

Fees and commissions are recognised when the Company satisfies the performance obligation, at fair value of the
consideration received or receivable based on a five-step model as set out below, unless included in the effective interest
calculation:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates
enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer
to transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects
to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf
of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one
performance obligation, the Company allocates the transaction price to each performance obligation in an amount that
depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each
performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

(iv) Net gain on Fair value changes

Any differences between the fair values of financial assets classified as fair value through the profit or loss, held by the
Company on the balance sheet date is recognised as an unrealised gain / loss. In cases there is a net gain in the aggregate,
the same is recognised in “Net gains on fair value changes” under Revenue from operations and if there is a net loss the
same is disclosed under “Expenses” in the statement of Profit and Loss.

Similarly, any realised gain or loss on sale of financial instruments measured at FVTPL and debt instruments measured at
FVOCI is recognised in net gain / loss on fair value changes. As at the reporting date the Company does not have any
financial instruments measured at FVTPL and debt instruments measured at FVOCI.

However, net gain / loss on derecognition of financial instruments classified as amortised cost is presented separately under
the respective head in the Statement of Profit and Loss.

5.3 Expenses

(i) Finance costs

Finance costs represents Interest expense recognised by applying the Effective Interest Rate (EIR) to the gross
carrying amount of financial liabilities other than financial liabilities classified as FVTPL.

The EIR in case of a financial liability is computed

a. As the rate that exactly discounts estimated future cash payments through the expected life of the financial liability

to the gross carrying amount of the amortised cost of a financial liability.

b. By considering all the contractual terms of the financial instrument in estimating the cash flows

c. Including all fees paid between parties to the contract that are an integral part of the effective interest rate, transaction

costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash flows is recognised in interest income with the corresponding
adjustment to the carrying amount of the assets.

Interest expense includes issue costs that are initially recognized as part of the carrying value of the financial liability and
amortized over the expected life using the effective interest method. These include fees and commissions payable to
advisers and other expenses such as external legal costs, Rating Fee etc, provided these are incremental costs that are
directly related to the issue of a financial liability.

(ii) Retirement and other employee benefits

Short term employee benefit

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee
benefits. These benefits include short term compensated absences such as paid annual leave. The undiscounted amount of
short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognised as an
expense during the period. Benefits such as salaries and wages, etc. and the expected cost of the bonus/ex-gratia are
recognised in the period in which the employee renders the related service.

Post-employment employee benefits

a) Defined contribution schemes

All the employees of the Company are entitled to receive benefits under the Provident Fund and Employees State Insurance
scheme, defined contribution plans in which both the employee and the Company contribute monthly at a stipulated rate.

The Company has no liability for future benefits other than its annual contribution and recognises such contributions as an
expense in the period in which employee renders the related service. If the contribution payable to the scheme for service
received before the Balance Sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised
as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for
services received before the Balance Sheet date, then excess is recognised as an asset to the extent that the pre-payment will
lead to, for example, a reduction in future payment or a cash refund.

b) Defined. Benefit schemes

The Company provides for the gratuity, a defined benefit retirement plan covering all employees. The plan provides for
lump sum payments to employees upon death while in employment or on separation from employment after serving for the
stipulated years mentioned under ‘The Payment of Gratuity Act, 1972’.

(iii) Other income and expenses

All Other income and expense are recognized in the period they occur.

(iv) Impairment of non-financial assets

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on
internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable
amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and risks specific to the asset.

In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can
be identified, an appropriate valuation model is used. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.

(v) Taxes

Current Tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from,
or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or
substantively enacted, by the reporting date in the countries where the Company operates and generates taxable income.

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

Deferred tax

Deferred tax assets and liabilities are recognised for temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

Deferred tax assets are only recognised for temporary differences, unused tax losses and unused tax credits if it is
probable that future taxable amounts will arise to utilise those temporary differences and losses. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities
and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but
they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities are realised
simultaneously.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company
recognizes MAT credit available as an asset only to the extent that it is probable that the Company will pay normal income
tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which
the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available
in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as “MAT Credit Entitlement.” The Company reviews the MAT Credit Entitlement
asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it
will pay normal tax during the specified period.

Goods and services tax /value added taxes paid on acquisition of assets or on incurring expenses Expenses and assets are
recognised net of the goods and services tax/value added taxes paid, except:

i. When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case,
the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

ii. When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.

5.4 Cash and cash equivalents

Cash and cash equivalents comprise the net amount of short-term, highly liquid investments that are readily convertible to
known amounts of cash (short-term deposits with an original maturity of three months or less) and are subject to an
insignificant risk of change in value, cheques on hand and balances with banks. They are held for the purposes of meeting
short-term cash commitments (rather than for investment or other purposes).

Cash Flows are reported using the indirect method whereby cash flows from operating, investing and financing activities
of the Group are segregated and profit before 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.

5.5 Property, Plant and equipment (PPE)

Property, plant and equipment (PPE) are measured at cost less accumulated depreciation and accumulated impairment, (if
any). The total cost of assets comprises its purchase price, freight, duties, taxes and any other incidental expenses directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner
intended by the management. Changes in the expected useful life are accounted for by changing the amortisation period or
methodology, as appropriate, and treated as changes in accounting estimates.

Subsequent expenditure related to an item of tangible asset are added to its gross value only if it increases the future benefits
of the existing asset, beyond its previously assessed standards of performance and cost can be measured reliably. Other
repairs and maintenance costs are expensed off as and when incurred.

Depreciation is calculated using the Written Down Value Method (WDV) in accordance with the useful life prescribed is
Schedule II to the Companies Act, 2013 to write down the cost of property and equipment to their residual values over their
estimated useful lives. Land is not depreciated.

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.

Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the
asset is derecognised. The date of disposal of an item of property, plant and equipment is the date the recipient obtains
control of that item in accordance with the requirements for determining when a performance obligation is satisfied in Ind
AS 115.

5.6 Intangible assets

An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future
economic benefits that are attributable to it will flow to the Company.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset comprises
its purchase price and any directly attributable expenditure on making the asset ready for its intended use and net of any
trade discounts and rebates. Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are
amortised over the useful economic life. The amortisation period and the amortisation method for an intangible asset with
a finite useful life are reviewed at least at each financial year-end. Changes in the expected useful life, or the expected
pattern of consumption of future economic benefits embodied in the asset, are accounted for by changing the amortisation
period or methodology, as appropriate, which are then treated as changes in accounting estimates. The amortisation expense
on intangible assets with finite lives is presented as a separate line item in the statement of profit and loss. Amortisation on
assets acquired/sold during the year is recognised on a pro- rata basis to the Statement of Profit and Loss from / upto the
date of acquisition/sale.

Amortisation is calculated using the straight-line method to write down the cost of intangible assets to their residual values
over their estimated useful lives. Intangible assets comprising of software are amortised on a straight-line basis over a period
of 6 years, unless it has a shorter useful life.

The Company’s intangible assets consist of computer software with definite life.

Gains or losses from derecognition of intangible assets are measured as the difference between the net disposal proceeds
and the carrying amount of the asset are recognised in the Statement of Profit and Loss when the asset is derecognised.

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Mar 31, 2024

1 Corporate Information

S.l.Capital & Financial Services Limited (''the Company") was incorporated on November 8, 1994 at Chennai. Tamil Nadu. The Company is a Non-Sytecmcally Important Non-Deposit Taking Non Banking Financial Company and a Full Fledged Money Changer. The Company has been providing fund based and fee based services. The equity shares of the Company are listed on the BSE Limited. The Company is reglsterec with the Reserve Bank of India

1. NBFC License No. • 07.00078

2. FFMC License No. • CHE-FFMC-0125-2023 3.

Identity Number (CIN): L67190TZ1994PLCO-KM90

The Company is the Subsidiary company of the Sharewealth Securities Limited.

2 Basis of preparation

The financial statements have been prepared as a going concern in accordance with the Indian Accounting Standard (‘lr>d AS’), notified under section 133 of the Companies Act.2013 read together with Rule 3 of the Companies (Indian Accounting Standards) Rules,20J5 anc Companies (Indian Accounting Standards) amendments Rules,2016 issued by the Ministry of Corporate Affairs (MCA). The Company has adopted Ind AS from April 1, 2019 with effective transition date as April 1, 2018

The preparation of financial statements requires the use of certain critical accounting estimates and assumptions that affect the reportec amounts of assets, liabilities, revenues and expenses and the disclosed amount of contingent liabilities. Areas Involving a higher degree ol judgement or complexity, or areas where assumptions arc significant to the Company arc discussed in Note 6 • Significant accounting judgements, estimates and assumptions.

The financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest lakhs, except when otherwise Indicated.

5 Presentation of financial statement

The financial statements of the Company are presented as per Schedule III iDrvision III) of the Companies Act, 2013 applicable to NBFCs. as notified (as amended) by the Ministry of Corporate Affairs (MCA). Financial assets and financial liabilities are generally reported on a gros: basis except when, there is an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event and the parties intend to settle on a net basis in the following circimstances:

i. The normal course of business

ii. The event of default

iii. The event of insolvency or bankruptcy of the Company and/or its counterparties.

I Statement of compliance

These separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards as per thr Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under Section 133 of the Companies Act, 2013 and the generally accepted accounting principles as referred to in paragraph 2 "Basis of Preparation" above.

>.1 Financial instruments

(I) Classification of financial Instruments

The Company classifies its financial assets into the following measurement categories: t. Financial assets to he measured at amortised cost

2. Financial assets to be measured at fair value through other comprehensive income

3. Financial assets to be measured at fair value through profit or loss accouit

The classification depends on the contractual terms of the financial assets’ cash flows and the Company''s business model for managing financial assets.

The Company determines its business model at the level that best reflects bow it manages groups of financial assets to achieve its busines: objective. The business model is assessed on the basis of aggregated portfolios based on observable factors. These factors include:

? Reports reviewed by the entity''s key management personnel on the performance of the financial assets

? The risks impacting the performance of the business model land the financial assets held within that business model) and its management thereof

? The compensation of the managing teams (for example, whether the compensation is based on the fair value of the assets managed or or the contractual cash flows collected I

? The expected frequency, value and timing of trades.

The business model assessment is based on reasonably expected scenarios without taking ''worst case'' or ''stress case’ scenarios into account.

The Company also assesses the contractual terms of financial assets on the basis of its contractual cash flow characteristics that are solely for the payments of principal and interest on the principal amount outstanding.

''Principal'' is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (foi example, if there arc repayments of principal or amortisation of the premium/discount).

In making this assessment, the Company considers whether the contractual cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair value through profit or loss.

The Company classifies its financial liabilities at amortised costs unless it has designated liabilities at fair value through the profit and losi account or is required to measure liabilities at fair value through profit or loss such as derivative liabilities.

(II) Financial assets measured at amortised cost

These Financial assets comprise bank balances. Loans and other financial assets.

Financial Assets with contractual terms that give rise to cash flows on specified dates, and represent solely payments of principal anc interest on the principal amount outstanding; and are held within a business model whose objective Is achieved by holding to collect contractual cash flows are measured at amortised cost.

These financial assets are initially recognised at fair value plus directly attnbutable transaction costs and subsequently measured at amortised cost. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or a financial liability.

iii) Financial assets measured at fair value through profit or loss

Items at fair value through profit or loss comprise:

• Investment in equity shares held for trading:

• Items specifically designated as fair value through profit or loss on Initial recognition: and

• debt instruments with contractual terms that do not represent solely payments of principal and interest.

Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised In the statement of profit and loss as incurred. Subsequently, they are measured at fair value and any gains or losses are recognised in the statement of profit and toss as they arise.

Financial instruments held for trading

A financial Instrument is classified as held for trading if It Is acquired or Incurred principally for selling or repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there Is evidence of short-term profit taking, or It Is a derivative not designated in a qualifying hedge relationship.

Trading derivatives and trading securities are classified as held for trading and recognised at fair value.

Iv) Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed funds arc subsequently measured at amortised cost. Amortised cost is calculator by taking into account any discount or premium on issue funds, and transaction costs that arc an integral part of the Fffeclive interest Rati

(DR).

(v) Recognition and derecognition of financial assets and liabilities

A financial asset or financial liability is recognised In the balance sheet when the Company becomes a party to the contractual provisions of the instrument, which is generally on trade date. Loans and receivables are recognised when cash is advanced (or settled) to the borrowers. Financial assets at fair value through profit or loss are recognised initially at fair value. All other financial assets are recognised initially at fair value plus directly attributable transaction costs.

The Company derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its rights to receive contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability. A financial liability is deiecognised from the balance sheet when the Company has discharged its obligation or the contract is cancelled or expires.

(vi) Impairment of financial assets

The Company recognises impairment allowance for expected credit loss on financial assets held at amortised cost.

The Company recognises loss allowances (provisions) for expected credit losses on its financial assets (Including non-fund exposures) that are measured at amortised costs or at fair value through other comprehensive income accoirt.

The Company applies a three-stage approach to measuring expected credit losses (ECls) for the Loan assets that are not measured at fair value through profit or loss. Ho ECL is recognised on equity Investments. Financial assets migrate through the following three stages based on the change In credit risk since initial recognition:

Stage 1: 17-mpnthsFCl

For exposures where there has not been a significant Increase in credit risk since initial recognition and that are not credit impaired upon origination, the portion of the lifetime ECL associated with the probability of default events occurring within the next 12 months is recognised.

Stage 2: Lifetime ECL - not ciedit impaired

For exposures where there has been a significant increase in credit risk since initial recognition but are not credit Impaired, a lifetime ECL (i.c- reflecting the remaining lifetime of the financial asset) is recognised.

Stage 3: Lifetime ECL credit Impaired

Exposures are assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred. Tor exposures that have become credit impaired, a lifetime ECL is recognised and interest revenue is calcinated by applying the effective interest rate to the amortised cost (net of provision) rather than the gross carrying amount.

Determining the stage for impairment

At each reporting date, the Company assesses whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the expected life between the reporting date and the date of initial recognition. The Company considers reasonable and supportable information that is relevant and available without undue cost or effort for this purpose. This includes quantitative and qualitative information and also, forward-looking analysis.

An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period, asset quality improves and also reverses any previously assessed significant increase In credit risk since origination, then the loss allowances reverts from lifetime ECL to 12-months ECL.

The loss allowances for these financial assets is based on a 12-months ECL.

When an asset Is uncollectible, it is wntten off against the related allowance. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off reduce the amount of the allowances in the profit and loss statement.

The Company assesses whether the credit risk on an exposure has increased significantly on an individual or collective basis. For the purposes of a collective evaluation of impairment, financial instruments arc grouped co the basis of shared credit risk characteristics, taking into account instrument type, credit ink ratings, date of initial recognition, lemaining term to maturity, industry, geographical location of the borrower and other relevant factors.

9f KU

ECLs are derived from unbiased and probability-weighted estimates of expected loss, and are measured as follows:

• Financial assets that are not credit-impaired at the reporting date: as the present value of all cash shortfalls over the expected life ot the financial asset discounted by the effective interest rate. The cash shortfall is the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive. The Company has grouped its various financial assets in to pools containing loans bearing homogeneous risks characteristics. The probability of default for the pools are computed based on the historical trends, adjusted for any forward looking factors. Similarly the Company computes the Loss Given Default based on the recovery rates.

• Financial assets that are credit-impaired at the reporting date: as the difference between the gross carrying amount and the present value

of estimated future cash flows discounted fry the effective interest rate._

Collateral valuation

To mitigate its credit rides on financial assets, the Company seeks to use collateral, where possible. Pie collateral comes in various forms, such os movable and immovable assets, guarantees. . etc. However, the fair value of collateral affects the calculation of ECls. To the extern possible, the Company uses active market data for valuing financial assets held as collateral. Other financial assets which do not have readily determinable market values are valued using models. Mon-tinancial collateral, such as vehicles, is valued based on data prodded by third parlies or management judgements.

foUaigaLtecgaesisL

In its normal course ot business whenever default occurs, the Company may take possession ot properties or other assets in Its retail portfolio and generally disposes such assets through auction, to settle outstanding debt. Any surplus funds are returned lo the customers/obligors. As a result of this practice, assets under legal repossession processes are not recorded on the balance sheet.

S.l. Capital 6 Financial Services Limited

Notes to Standalone Financial Statements for the year ended 31 March 2024 Write-offs

The Company recuces the gross carrying amount of a financial asset when the Company has no reasonable expectations of recovering a financial asset in Its entirety or a poition thereof. This is generally the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subjected to write-offs. Any subsequent recovcncs against such loans are credited to the statement of profit and loss.

(vlti) Determination of fair value

hair value is the price that would be received to sell an asset or paic to transfer a liability m an orderly t''ansaction between market The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting perod dicing which the change has

5.2 Revenue from operations

(I) Interest Income

Interest Income is recognised by applying the Effective Interest Rate (EIR) to the gross carrying amouit of financial assets other than crcdn-lmpaired assets and financial assets classified as measured at FVTPt.

The EIR in case of a financial asset is computed

a. As tie rate that exactly dtscouits estimated future cash receipts through the expected life of the linanclal asset to the gross carrying amount of a financial asset.

b. By considering all the contractual terms of the financial instrument in estimating the cash flows

c. Includirg all fees received between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash flows is recognised in interest income with the corresponding adjustment to the carrying amount of the assets.

(II) Dividend Income

Dividend income is recognised

a. When the right lo receive the payment is established,

b. it -s probable lhat the economic benefits associated with the dividend will flow to the entity and c the amount of the dtvidend can be measured reliably.

Fees & Commission Income

Fees and commissions are recognised when the Company satisfies the performance obligation, at fair value of the consideration received or Processing fee which is not form part of effective interest rate has been recognised as and when it accrues.

(tv) Net gain on Fair value changes

Any differences between the fair values of financial assets classified as fair value through the profit or loss, held by the Company on the balance sheet date b recogn''sed as an inreatised gain / loss, in cases there H a net gain In the aggregate, the same ts recognised in “Net gains on fair value changes" under Revenue from operations and if there is a net loss the same is disclosed under "Expenses" in the statement of Profit and loss.

Slmiarly, any realised gain or loss on sale of financial Instruments measured at FVTPl and debt instruments measured at FVOCI Is recogn sed in net gain / loss on fair value changes. As at the reporting date the Company docs not have any financial Instruments measured at FVTPL and debt instruments measured at FVOCI.

However, net gam l loss on derecognition of financial instruments classified as amortised cost is presented separately under the respective head In the Statement of Profit and Loss.

5.3 Expenses

0) Finance costs_

^:lnance costs represents Interest expense recognised by applying the Effective Interest Rate (EIR| to the gross carrying amount of financial labilities other than financial liabilities classified as FVTPL.

The EIR in case of a financial liability is computed

i. as the rale that exactly discounts estimated future cash payments through the expected life of the financial liability to the gross carryint imount of the amortised cost of a financial liability.

). By considering all the contractual terms of the financial instrument in estimating the cash flows Including all fees paid between parties to the contract that are an integral part of the effective interest rate, transaction costs, and at jther premiums or discounts.

tny subsequent changes in the estimation of the future cash flows is recognised in interest income with the corresponding adjustment to the tarrying amount of the assets.

merest expense includes issue costs that arc initially recognized as port of the carrying value of the financial liability and amortized over the expected life using the effective interest method. These include fees and commissions payable to advisers and other expenses such as •xtemal legal costs, Rating Fee etc, provided these are incremental costs that are directly related to the issue of a financial liability.

(ii) Retirement arid other employee benefit!

fog??, tern- .employee .benefit

All employee benefits payable wholly withm twelve months of rendering the service are classified as short term employee benefits. These benefits include short term compensated absences such as paid annual leave. The undisccurted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees Is recognised as an expense during the period. 8enelits such as salaries and wages, etc. and the expected cost of the bonusfex-gratia are recognised in the period in which the employee renders the related service.

Post-employment employee benefits

a) Defined cont rbut ton schemes

All the employees of the Company arc entitled to receive benefits under the Provident Fund and Employees State Insurance scheme, defined contribution plans in which both the employee and the Company commute monthly at a stipulated rate. The Company has no Mab''lity for future benefits other than its annual contribution and recognises such contributions as an expense in the period in which employee renders the related service. If the contrbution payable to the scheme for service received before the Balance Sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already'' paid. If the contribution already paid exceeds the contribution due fo'' services received before the Balance Sheet date, then excess is recognised as an asset to the extent that the pre payment will lead to. for example, a reduction in future payment or a cash refund.

hi Drfricd Benefit schemes

The Company provides for the gratuity, a defined benefit retirement plan covering all employees, the plan provides for lump sum payments to employees upon death while In employment or on sepaiation from employment alter serving for the stipulated years mentioned under ‘The Payment of Gratuity Act. 1972''.

(Hi) Other Income and expenses

All Other income anc expense are recognized in the period they occur.

(Iv) impairment of non-ftnancial assets

The carrying amount of assets s reviewed at each balance sheet date if there is any indication of impairment based on internal •''external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds Us recoverable amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use. the estimated future cash flo-ws are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. After impairment, depreciation is provided on the revised carryirg amount of the asset over its remaining useful life.

(v) Taxes

Current Tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities. The tax rales and tax laws used to compute the amount are those tlsal are enacted, or substantively enacted, by ''.he reporting date in the countries where the Company operates and generates taxable income.

Current ncomc tax relating to items recognised outside profit or loss is recognised outside profit or loss (either In other comprehensive ¦ncome or in equity*. Current tax Items are recognised in correlation to the underlying transaction either m OCI or directly In equity. Management periodically evaluates positions taken in live tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes arovisions where appropriate.

BefeisUag

Oefe-red tax assets and liabilities are recognised for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred income tax is determined using tax rates (and laws* that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realisec or the deferred income tax liability is settled.

Deferred tax assets are only recognised for temporary differences, unused tax losses and mused tax credits if it is probable that fjture taxable amounts will arise to utilise those temporary differences and losses. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that It is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are offset where there is a legally enforceaole right to offset current tax assets and liabilities and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but the/ intend to settle _current tax liabilities and assets on a net basis or their tax assets and liabilities are realised simultaneously._

Mnimirn Alternate Tax (MATl

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company -ecognues MAT credit available as an asset only to the extent that it is probable that the Company will pay normal income tax during the specified period, i.e.. the perod for which .MAT credit is allowed to be earned forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act. 1961, the said asset is created by way of credit to tire statement of profit and loss and shown as "MAT Credit Entitlement.'''' The Company •eviews the MAT Ciedil Entitlement asset at each repo-ting date arid writes dawn tire asset to the extent the Company does not have convincing evidence that it will pay normal lax Curing the specified aeriod.

Gooes and services tax / value added taxes paid on acquisition of assets or on incurring expenses Expenses and assets are recognised net of the goods and services lax/valuc added taxes paid, except:

i. When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, live tax paid is -ecognrsed as part of live cost of acquisition of the asset or as part of the expense item, as applicable fl. When receivables and payables are stated with the amount of tax Included

The net amount of tax recoverable from, 01 payable to. the taxation authority is included as part of receivables or payables in the balance sheet.

5.4 Cash and cash equivalents

Cash and cash equivalents comprise live net amount of short-term, highly liquid investments that a-e readily convertible to known amounts of cash (short-term deposits with an original maturity of three months or less) and a-e subject to an ins''gnificant risk of change in value, cheques on hand and balances with banks. They are held for the perooses of meeting short-term cash commitments (lather Ilian ''or investment or other purposes).

Cash Flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of live Group are segregated and profit before 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.

5.5 Property. Plant and equipment |PPE)

Property, plant and equipment

Subsequent expenditire related to an item of tangible asset are added to its gross value only if it increases the future benefits of the existing asset, beyond its previously assessed standards of performance and cost can be measured reliably. Other repairs and maintenance costs are expensed off as and when incurred.

Depreciation is calculated using the Written Down Value Method IWDV) m accordance with the useful life prescribed is Schedule li to the Companies Act. 2013 to write down the cost o'' property and eryjipment to their residual values over their estimated useful lives. Land is not depreciated.

I he estimated useful lives are, as follows:

Particulars	Useful life estimated by Company
Computers and cafa processing units
• Enduscr devices Desktops. Laptops	3 years
Furniture and fittings
• General	10 years
Offce equipment	5 years

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

Property plant and equipment Is derecognised on disposal or when no future economic benefits are expected from Its use. Any gam or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)

Is recognised In other Income / expense in the statement of brollt and loss in the year the asset is derecognised. Hie date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requ''rements for determining when a performance obligation is satisfied in Ind AS 115_

5.6 Intangible assets

An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic benefit that are attributable to it will flow to the Company.

Intangible assets acquired separately are measwed on initial recognition at cost. The cost of an intangible asset comprises its purchase prki and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impaiimen losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over tfv useful economic life. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed a least at each financial year-end. Changes in the expected useful life, or the expected pattern of consumption of future economic benefit embodied fn the asset, are accounted for by changing the amortisation period or methodology, as appropriate, which are then treated a changes In accounting estimates. The amortisation expense on Intangible assets with finite lives Is presented as a separate line Item in th< statement of profit and loss. Amortisation on assets acqufred/sold during the year Is recognised on a pro-rata basis to the Statement o Profit and Loss from / upto the date of acquisltlon/sale.

Amortisation Is calculated using the straight line method to write down the cost of Intangible assets to their residual values over thei estimated useful lives. Intangible assets comprising of software are amortised on a straight-line basis over a period of 6 years, unless it has. shorter useful life.

The Company’s Intangible assets consist of computer software with definite life.

Gains or losses from derecognition of intangible assets are measured as the difference between the net disposal proceeds and the carryny amoixit of the asset are recognised In the Statement of Profit and Loss when the asset is derecognised.

5.7 Provisions

Provisions are recognised when the enterprise has a present obligation (legal or constructive) as a result of past events, and It H probabtt that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made o the amount of the obligation.

When the effect of the time value of money is material, the enterprise determines the level of provision by discounting the expected cast flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision Is presented in tht statement of profit and loss net of any reimbursement.

5.8 Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognizer because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises it extremely rare cases where there is a liability that cannot be recognized because it cannot be me.aMxed reliably. The Company does no recognize a contingent liability but discloses its existence in the financial statements.

5.9 Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic EPS is calculated b dividing the net profit or loss for the year attributable to equity shareholders (after attributable taxes) by the weighted average number o equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and th< weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Oilutivt potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. In computing the dilutive earnings per share, only potential equity shares that are dilutive and that either reduces the earnings per share or increases los per share are included.

. 10 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODfA). The 8oard of Directors (BOO) of the Company assesses the financial performance and position of the Company, and makes strategii decisions. The BOO, which has been identified as being the chief operating decision maker. The Company is engaged in the business of i Lending finance and ii> Fees & commission income. The said business are aggregated for the purpose of review of performance by COOM Accordingly, the Company has concluded that the business of lending finance and fees & commission income to be the only reportobli segment._

i.11 Leases-

Ind AS 116 requires lessees to determine the lease term as the txxvcancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will lx exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the Importance of the underlying asset to Company''s operations taking intc account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed t< ensure that the lease term reflects the current economic circumstances. Since all leases of the Company is for a term less than 12 months single lessee accounting model under Ind AS 116 is not applicable.

> Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with the Ind AS requires the management to make judgments, estimates anc assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and futile periods are affected Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities ir future periods.

7 Impairment of loans portfolio

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the estimation of Itx amoait and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes in which can result in different levels of allowances.

It has been the Company''s policy to regularly review its models in the context of actual loss experience and adjust when necessary.

The impairment loss on loans and advances is disclosed in more detail in Note 5.1 |vi) Overview of ECl principles.

In case, higher provisions are to be considered as per the prudential norms of the Reserve 8ank of India, they are considered.

Effective Interest Rate (EIR) method

The Company’s EIR methodology, recognises interest income / expense using a rate of return that represents the best estimate of a constant rate of return over the expected behavioural life of loans given / taken and recognises the effect of potentially different Interest rates at various stages and other characteristics of the product life cycle (Including prepayments and penalty Interest and charges).

This estimation, by nature, requires an clement of judgement regarding the expected behaviour and lifc-cyclc of the instruments, as wd expected changes to India''s base rate and other fee income/expense that are integral parts of the instrument.

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Mar 31, 2014

1 Basis of Preparation

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notified under Section 211(3C), Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI) / RBI. The company follows mercantile system of accounting and recognises income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2 Inter Branch Transfers

Inter Branch Transfers of currency are at cost.

3 Valuation of Inventories Currencies in stock are valued at cost.

4 Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period like provision for employee benefit provisioning for receivables, provision for credit enhancement for assets de-recognised, net realizable value of repossessed assets, useful lives of fixed assets. Management believes that the estimates used in the preparation of the financial statemetns are prudent and reasonable. Future results may vary from these estimates.

5.Provision, Contigencies Liabilities & Assets - AS 29

Provisions are recognised only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements.

A contingent provision against standard assets has been created at 0.25% of the outstanding standard assets in terms of the RBI circular Ref. No.DNBS(PD) CC No.225/03.02.001/ 2011-12 dated July 1,2011.

6 Fixed Assets and Depreciation

Fixed assets are stated at cost less Depreciation on Written Down Value Method at the rates and in the manner specified in the Schedule XIV to The Companies Act, 1956. No depreciation is provided on assets sold during the year.

7 Investments

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on "Accounting for investments'' as notified under the Companies (Accounting Standards) Rules, 2006. Current investments also include current maturities of long-term investments.

8 Loans

In accordance with the RBI guidelines, all loans are classified under any of four catagories i.e (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.

9 Revenue Recognition

Interest on loans and advances are recognised on accrual basis. In respect of loans under litigation, it is the company''s policy to recognise interest on realisation basis.

10 Retirement Benefits

Contribution to Provident Fund is funded as a percentage of salary. Adequate provisions have been made in the accounts for the liability for Gratuity of employees.

11 Impairment of Assets The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

12 Cash and Cash Equivalents

Cash and Cash Equivalents for the purpose of the cash flow statement comprises of cash on hand,cash in bank, fixed deposits and other short term highly liquid investments with an original maturity of three months or less, that are readily convertible into known amount of cash and which are subject to an insignificant risk of exchange in value.

13 Cash Flow Statement

Cash Flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Group are segregated and profit before 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.

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Mar 31, 2013

1 Basis of Preparation

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notified under Section 211(3C), Companies(Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI) / RBI. The company follows mercantile system of accounting and recognises income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2 Inter Branch Transfers ''

Inter Branch Transfers of currency are at cost.

3 Valuation of Inventories Currencies in stock are valued at cost.

4 Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period like provision for employee benefit provisioning for receivables, provision for credit enchancement for assets de-recognised, net realizable value of repossessed assets, useful lives of fixed assets. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

5 Provision, Contigencies Liabilities & Assets - AS 29

Provisions are recognised only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements.A contingent provision against standard assets has been outstanding standard assets in terms of the RBI circular Ref. No.DNBS(PD) CCNo.225/03.02.001/2011-12 dated July 1,2011.

6 Fixed Assets and Depreciation

Fixed assets are stated at cost less Depreciation on Written Down Value Method at the rates and in the manner specified in the Schedule XIV to The Companies Act, 1956. No depreciation is provided on assets sold during the year.

7 Investments

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on "Accounting for investments'' as notified under the Companies (Accounting Standards) Rules, 2006. Current investments also include current maturities of long-term investments.

8 Loans

In accordance with the RBI guidelines, all loans are classified under any of four catagories i.e (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.

9 Revenue Recognition

Interest on loans and advances are recognised on accrual basis. In respect of loans under litigation, it is the company''s policy to recognise interest on realisation basis.

10 Retirement Benefits

Contribution to Provident Fund is funded as a percentage of salary. Adequate provisions have been made in the accounts for the liability for Gratuity of employees.

11 impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

12 Cash and Cash Equivalents

Cash and Cash Equivalents for the purpose of the cash flow statement comprises of cash on hand.cash in bank, fixed deposits and other short term highly liquid investments with an original maturity of three months or less, that are readily convertible into known amount of cash and which are subject to an insignificant risk of exchange in value.

13 Cash Flow Statement

Cash Flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Group are segregated and profit before 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.

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Mar 31, 2012

1 Basis of Preparation

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis and comply in all material aspects with the accounting standards notified under Section 211(3C), Companies(Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI) / RBI. The company follows mercantile system of accounting and recognises income and expenditure on accrual basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2 Inter Branch Transfers

Inter Branch Transfers of currency are at cost.

3 Valuation of Inventories

Currencies in stock are valued at cost.

4 Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period like provision for employee benefit provisioning for receivables, provision for credit enchancement for assets de-recognised, net realizable value of repossessed assets, useful lives of fixed assets. Management believes that the estimates used in the preparation of the financial statemetns are prudent and reasonable. Future results may vary from these estimates.

5 Provision, Contigencies Liabilities & Assets - AS 29

Provisions are recognised only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements.

A contingent provision against standard assets has been created at 0.25% of the outstanding standard assets in terms of the RBI circular Ref. No.DNBS(PD) CC No.225/03.02.001/ 2011-12 dated July 1,2011

6 Fixed Assets and Depreciation

Fixed assets are stated at cost less Depreciation on Written Down Value Method at the rates and in the manner specified in the Schedule XIV to The Companies Act, 1956. No depreciation is provided on assets sold during the year.

7 Investments

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on "Accounting for investments'' as notified under the Companies (Accounting Standards) Rules, 2006. Current investments also include current maturities of long-term investments.

8 Loans

In accordance with the RBI guidelines, all loans are classified under any of four catagories i.e (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.

9 Revenue Recognition

Interest on loans and advances are recognised on accrual basis. In respect of loans under litigation, it is the company''s policy to recognise interest on realisation basis.

10 Retirement Benefits

Contribution to Provident Fund is funded as a percentage of salary. Adequate provisions have been made in the accounts for the liability for Gratuity of employees.

11 Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

12 Cash and Cash Equivalents

Cash and Cash Equivalents for the purpose of the cash flow statement comprises of cash on hand,cash in bank, fixed deposits and other short term highly liquid investments with an original maturity of three months or less, that are readily convertible into known amount of cash and which are subject to an insignificant risk of exchange in value.

13 Cash Flow Statement

Cash Flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Group are segregated and profit before 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.

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Mar 31, 2011

1 General

The financial statements are prepared under the historical cost convention, on the basis of a going concern and as per the applicable accounting standards. The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis.

The company has followed prudential norms perscribed by the R.B.I in respect of Income Recognition, capital Adequacy and Provision for Bad and Doubtful Debts.

2 Inter Branch Transfers

Inter Branch Transfers of currency are at cost.

3 Valuation of Inventories

Currencies in stock are valued at cost.

4 Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date the date of the financial statements and the reported income and expenses during the reporting period like provision for employee benefits, provisioning for receivables, provision for credit enchancement for assets de-recognised, net realizable value of repossessed assets, useful lives of fixed assets. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results may vary from these estimates.

5 Provision , Contigencies Liabilities & Assets - AS 29

Provisions are recognised only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements.

6 Contigencies & Events Occuring After the Balance Sheet Date AS-4

Sundry Debtors of Rs.18,45,221.35 have been recovered after the Balance Sheet date

7 Fixed Assets and Depreciation

Fixed assets are stated at cost less Depreciation on Written Down Value Method at the rates and in the manner specified in the Schedule XIV to The Companies Act, 1956. No depreciation is provided on assets sold during the year.

8 Investments

Investments are held on long term basis and valued at cost. Diminution in the value of investments is not provided for, as the management is of the opinion that the diminution is of temporary nature.

9 Revenue Recognition

Interest on loans and advances are recognised on accrual basis. In respect of loans under litigation, it is the company''s policy to recognise interest on realisation basis.

10 Retirement Benefits

Contribution to Provident Fund is funded as a percentage of salary. Adequate provisions have been made in the accounts for the liability for Gratuity of employees.

11 Impairment of Assets

The Company has not provided for impairment of any assets.

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Mar 31, 2009

1 General

The financial statements are prepared under the historical cost convention, on the basis of a going concern and as per the applicable accounting standards. The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis.

The company has followed prudential norms prescribed by the R.B.I in respect of Income Recognition, capital Adequacy and Provision for Bad and Doubtful Debts.

2 Inter Branch Transfers

Inter Branch Transfers of currency are at cost.

3 Valuation of Inventories Currencies in stock are valued at cost.

4 Fixed Assets and Depreciation

Fixed assets are stated at cost less Depreciation on Written Down Value Method at the rates and in the manner specified in the Schedule XIV to the Companies Act, 1956. No depreciation is provided on assets sold during the year.

5 Investments

Investments are held on long term basis and valued at cost. Diminution in the value of investments is not provided for, as the management is of the opinion that the diminution is of temporary nature.

6 Revenue Recognition

Interest on loans and advances are recognized on accrual basis. In respect of loans under litigation, it is the company's policy to recognize interest on realization basis.

7 Retirement Benefits

Contribution to Provident Fund is funded as a percentage of salary. Adequate provisions have been made in the accounts for the liability for Gratuity of employees.

8 Impairment of Assets

The Company has not provided for impairment of any assets.