A) System of Accounting:
 
 i) The Company follows the mercantile system of accounting and
 recognizes income and expenditure on an accrual basis except in case of
 significant uncertainties.
 
 ii) Financial statements are based on historical cost. These costs are
 not adjusted to reflect the impact of the changing value in the
 purchasing power of money.
 
 iii) The preparation of financial statements in conformity with
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amounts of assets,
 liabilities, revenue and expenses and disclosure of contingent
 liabilities as on the date of financial statements. The estimates and
 assumptions used in the accompanying financial statements are based
 upon managements evaluation of the relevant facts and circumstances as
 of the date of the financial statements. Actual results could differ
 from those estimates. Any revision to accounting estimates is
 recognized prospectively in current and future periods.
 
 B) Fixed Assets, Depreciation and Amortization:
 
 I) (i) Fixed Assets are carried at cost of acquisition.
 
 (ii) Depreciation on additions to Assets relating to leasing Business
 is being provided for as above, on pro-rata basis with reference to the
 month of commencement of the lease Period.
 
 (iii) Depreciation on Assets relating to leasing Business, sold during
 the year, is being provided for at their respective rates up to the
 month in which such asset is sold.
 
 (b) On other Assets:
 
 (i) Depreciation on other assets is being provided on Written Down
 Value Method at the rates specified in Schedule XIV to the Companies
 Act, 1956. Depreciation on additions during the year is being provided
 for on a pro-rata basis with reference to the month of addition.
 
 (ii) Depreciation on assets sold during the year is being provided for,
 at their respective rates up to the month in which such asset is sold.
 
 II) On Intangible Assets and Amortization thereof:
 
 Intangible assets, representing Specialized Software, are recognised
 consistent with the criteria specified in Accounting Standard - 26
 Intangible Assets as prescribed by Companies (Accounting Standards)
 Rules, 2006. The same is amortized over a period of 60 months, being
 the estimated useful life of the software.
 
 C) Investments:
 
 (i) Investments maturing within twelve months from the date of
 acquisition and investments made with the specific intention to dispose
 off within twelve months from the date of acquisition are classified as
 short term / current investments and are carried at their cost or
 market value / realizable value, whichever is lower.
 
 (ii) Investments other than short term / current investments are
 carried at their cost of acquisition. Provision for diminution in value
 of investments, if any, is made if, in the opinion of the management,
 such diminution is other than temporary.
 
 (iii) Fixed income securities with effect from this year are stated at
 cost less amortization of premium/discount as the case may be. (Refer D
 (iii) below)
 
 D) Income from:
 
 (i) Assets under Finance:
 
 The Company has accrued finance charges and service charges in terms of
 contractual commitments with borrowers detailed in the finance
 agreements entered into with hirers except in the case of Non-
 Performing Assets.
 
 (ii) leasing Business:
 
 (a) lease rental income is recognized on accrual basis.
 
 (b) For leases effected prior to 1 April 2001, the Company follows the
 recommendations of the Institute of Chartered Accountants of India
 contained in the Guidance Note on Accounting for leases. Accordingly, a
 matching annual charge is made to the Profit and loss Account
 representing recovery of net investment of leased assets. The said
 charge is calculated by deducting Finance Income for the year (arrived
 at by applying the rate of interest implicit in the lease to the net
 investment in the lease during the year) from the lease rental in
 respect of all its leased assets.  This annual charge comprises of book
 depreciation (as per the policy stated in Para 1(B) (ii)) and a lease
 equalization charge where the annual lease charge is more than book
 depreciation. Where the annual lease charge is less than book
 depreciation a lease equalization charge credit is taken. The balance
 standing in the lease Adjustment Account has been adjusted in the net
 value of leased assets.
 
 For leases effected on or after 1 April 2001, the Company has followed
 the provisions of Accounting Standard – 19 leases as prescribed by
 Companies (Accounting Standards) Rules, 2006.
 
 (iii) Investment
 
 (a) Dividend is accrued when the right to receive is established i. e.
 when declared by the investee entity.
 
 (b) Interest on securities is accounted for on accrual basis except
 where the ultimate collection cannot be established with reasonable
 certainty.
 
 (c) With effect from current year, in order to reflect the contracted
 yield as interest income, the premium/discount on fixed income
 securities is amortized with reference to the yield to maturity
 prevailing on acquisition. The impact of this change in the accounting
 policy on the profit for the year is not material considering the
 consequential release of the provision for diminution in the value of
 investment made in earlier years.
 
 (iv) Other Income:
 
 Other income is mainly accounted on accrual basis, except in case of
 significant uncertainties.
 
 E) Receivables under finance:
 
 (i) Receivables under finance represent principal and matured finance
 charges outstanding at the close of the year but net of amount written
 off.
 
 (ii) The Company assesses all receivables for their recoverability and
 accordingly, makes provisions for non performing assets as considered
 necessary. Further, with effect from the previous year, the Company has
 enhanced its provisioning norms by accelerating provision to an early
 stage based on past experience, emerging trends and estimates. however,
 the Company ensures that the said provisions are not lower that the
 provisions stipulated in the applicable Reserve Bank of India
 Guidelines.
 
 (iii) A general provision is also made by the Company @ 0.25% on the
 standard assets outstanding and disclosed under Provisions in the
 schedule 8 in the financial statements as required by the Reserve Bank
 of India.
 
 F) Employee Benefits:
 
 (i) Gratuity:
 
 Payment for present liability of future payment of gratuity is being
 made to the Approved Gratuity funds, which cover the same under cash
 accumulation policy of the life Insurance Corporation of India (lIC).
 however, any deficits in Plan Assets managed by lIC as compared to
 actuarial liability are recognized as a liability.
 
 (ii) Superannuation:
 
 Defined Contribution to superannuation fund is being made as per the
 scheme of the Company.
 
 (iii) Provident fund contributions are made to Bajaj Auto limited
 Provident Fund Trust. Deficits, if any, of the fund as compared to
 aggregate liability is additionally contributed by the Company and
 recognized as an expense.
 
 (iv) Privilege leave:
 
 Privilege leave entitlements are recognized as a liability, in the
 calendar year of rendering of service, as per the rules of the Company.
 As accumulated leave can be availed and / or encashed at any time
 during the tenure of employment the liability is recognized at the
 actuarially determined value by an Appointed Actuary.
 
 (v) Contribution to Employees Pension Scheme, 1995 is made to
 Government Provident Fund Authority.
 
 G) Taxation:
 
 Provision for Taxation is made on the basis of the Taxable Profits
 computed for the current accounting period in accordance with the
 Income Tax Act 1961. Deferred Tax resulting from timing differences
 between Book Profits and Tax Profits is accounted for at the current
 rate of tax to the extent the timing differences are expected to
 crystallize, in case of Deferred Tax liabilities with reasonable
 certainty and in case of Deferred Tax Assets with reasonable certainty
 that there would be adequate future taxable income against which
 Deferred Tax Assets can be realized. however, Deferred Tax Asset
 arising on account of unabsorbed depreciation and business losses are
 recognized only if there is virtual certainty supported by convincing
 evidence that there would be adequate future taxable income against
 which the same can be realized/set off.
 
 h) Provisions:
 
 Necessary provisions are made for present obligations that arise out of
 past events prior to the Balance Sheet date entailing future outflow of
 economic resources. Such provisions reflect the best estimates based on
 available information.
 
 I) Employee Stock Option Scheme – See Note No. 14