i) Basis of Accounting:
 
 The financial statements are prepared under the historical cost
 convention on an accrual basis in accordance with the Generally
 Accepted Accounting Principles in India and Accounting Standards (AS)
 as notified by the Companies (Accounting Standards) Rules, 2006.
 
 ii) Prudential Norms:
 
 The Company follows the Reserve Bank of India (RBI) Directions in
 respect of Non Banking Financial (Non- Deposit Accepting or Holding)
 Companies Prudential Norms (Reserve Bank) Directions, 2007 (RBI
 Directions, 2007), dated February 22, 2007 in respect of income
 recognition, income from investments, accounting of investments, asset
 classification, disclosures in the balance sheet and provisioning.
 Accounting Standards (AS) as notified by the Companies (Accounting
 Standards) Rules, 2006 and Guidance Notes issued by The Institute of
 Chartered Accountants of India (ICAI) are followed insofar as they
 are not inconsistent with the RBI Directions, 2007.
 
 iii) Use of Estimates:
 
 The presentation of financial statements in conformity with the
 generally accepted accounting principles requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual result and estimates are recognised in the year in
 which the results are known / materialised.
 
 iv) Revenue Recognition:
 
 Interest Income from financing activities and others is recognised on
 an accrual basis. In terms of the RBI Directions, interest income on
 Non-performing assets (NPAs) is recognized only when it is actually
 realised.
 
 Income from Fee based Advisory Services is recognised on an accrual
 basis.
 
 Commission on insurance policies sold is recognised when the company
 under its
 
 agency code sells the insurance policies and when the same is accepted
 by the principal insurance company.
 
 Transactions in respect of Investment / Dealing in Securities are
 recognised on trade dates.
 
 Commission on Mutual Funds is recognised on accrual basis.
 
 Processing Fee received in respect of loans is accounted for in the
 year in which the loan is disbursed.
 
 Repayment of loans is as stipulated in the respective loan agreements
 or by way of Equated Monthly Installments (EMIs) comprising principal
 and interest. EMIs commence once the entire loan is disbursed.  Pending
 commencement of EMIs, Pre-EMI interest is payable every month and
 accounted for on accrual basis.
 
 Dividend income on equity shares is recognised when the right to
 receive the dividend is unconditional as at the balance sheet date. In
 terms of the RBI Directions, wherever applicable, Dividend Income on
 units of Mutual Fund held by NBFC companies is recognized on cash
 basis.
 
 v) Securitisation / Assignment of Loan portfolio:
 
 Derecognition of loans securitised in the books of the company,
 recognition of gain / loss arising on securitization and accounting for
 credit enhancements provided by the company is based on the Guidelines
 issued by the Reserve Bank of India.
 
 Derecognition of loans assigned in the books of the company is based on
 the concept of surrender of control over the loans resulting in a true
 sale of loans.
 
 Income on Assignment of Loans is recognised on entering into deal
 agreement with the assignee, wherever applicable, and is the difference
 between the Net present value of future assigned loan receivables
 discounted at the assignees rate as agreed upon and the principal
 outstanding at the inception of Deal.
 
 Credit enhancement in the form of cash collateral, if provided by the
 company, by way of deposits is included under Cash and bank balances /
 Loans and Advances, as applicable.
 
 vi) Fixed Assets:
 
 (a) Tangible Assets:
 
 Tangible fixed assets are stated at cost, net of tax / duty credits
 availed, less accumulated depreciation / impairment losses, if any.
 Cost includes original cost of acquisition, including incidental
 expenses related to such acquisition and installation.
 
 (b) Intangible Assets:
 
 Intangible assets are stated at cost, net of tax / duty credits
 availed, less accumulated amortization / impairment losses, if any.
 Cost includes original cost of acquisition, including incidental
 expenses related to such acquisition.
 
 vii) Depreciation / Amortisation:
 
 Depreciation on tangible fixed assets is provided on straight-line
 method at the rates specified in Schedule XIV of the Companies Act, 1
 956. Depreciation on additions to fixed assets is provided on pro-rata
 basis from the date the asset is put to use. Lease hold improvements
 are amortised over the period of Lease. Depreciation on sale /
 deduction from fixed asset is provided for up to the date of sale /
 deduction, as the case may be.  Assets costing less than Rs. 5,000 are
 fully depreciated in the year of purchase.
 
 Intangible assets consisting of Software are amortized on a straight
 line basis over a period of four years from the date when the assets
 are available for use.
 
 viii) 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. The
 recoverable amount is higher of, an assets net selling price and its
 value in use. If such recoverable amount of the asset or the
 recoverable amount of the cash generating unit to which the asset
 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 recognised 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.
 
 ix) Investments:
 
 Investments are classified as long term and current investments. Long
 term investments are carried at cost less provision, if any, for any
 diminution other than temporary in their value. In terms of the RBI
 Directions, 2007, unquoted current investments in equity shares are
 valued at cost or break-up value, whichever is lower. Unquoted current
 investments in units of mutual funds are valued at the net asset value
 declared by the mutual fund in respect of each particular scheme.
 Quoted Current investments are valued at lower of cost and fair value.
 Other unquoted current investments are valued at carrying value.
 
 x) Stock of Securities:
 
 Stock of securities is valued at lower of cost and net realisable
 value. Cost is determined on weighted average basis.
 
 xi) Borrowing Costs:
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalized as part of cost of
 the asset. All other borrowing costs are charged to Profit & Loss
 Account.
 
 xii) Commercial Papers:
 
 The liability is recognised at face value of the commercial paper at
 the time of issue of the commercial paper. The discount on issue of
 commercial paper is amortised over the tenure of the instrument.
 
 xiii) Employee benefits:
 
 Companys contribution to Provident Fund is charged to profit and loss
 account. The company has unfunded defined benefit plans namely leave
 encashment (long term compensated absences) and gratuity for all the
 employees, the liability for which is determined on the basis of an
 actuarial valuation at the end of the year using the Projected Unit
 Credit Method. Superannuation (Pension & Medical coverage) payable to
 certain Director on retirement is actuarially valued at the end of the
 year using the Projected Unit Credit Method. Actuarial gains and losses
 comprise experience adjustments and the effects of change in actuarial
 assumptions and are recognised in Profit and Loss account as income or
 expenses.
 
 xiv) Deferred Employee Stock Compensation Cost:
 
 Deferred employee stock compensation cost for stock options are
 recognised on the basis of generally accepted accounting principles and
 are measured by the difference between the intrinsic value of the
 companys shares of stock options at the grant date and the exercise
 price to be paid by the option holders. The compensation expense is
 amortised over the vesting period of the options. The fair value of
 options for disclosure purpose is measured on the basis of a valuation
 performed, as certified by an independent firm of Chartered Accountants
 in respect of stock options granted.
 
 xv) Taxes on Income:
 
 Current tax is determined as the tax payable in respect of taxable
 income for the year and is computed in accordance with relevant tax
 regulations.
 
 Deferred tax resulting from timing differences between book and tax
 profits is accounted for at the current rate of tax / substantively
 enacted tax rates as on the Balance Sheet date, to the extent that the
 timing differences are expected to crystallise.
 
 Deferred Tax Assets are recognized where realization is reasonably
 certain whereas in case of carried forward losses or unabsorbed
 depreciation, deferred tax assets are recognized only if there is a
 virtual certainty of realization backed by convincing evidence.
 Deferred Tax Assets are reviewed for the appropriateness of their
 respective carrying values at each Balance Sheet date.
 
 xvi) Derivative Transactions:
 
 During the year the Company has entered into Interest Rate Swap (IRS)
 Contract. All outstanding Interest Rate Swap contracts are
 marked-to-market as at the year end. Losses are recognised to the
 profit and loss account based on category of contracts and gains
 towards category of contracts are ignored, in line with the
 Announcement made by the ICAI dated March 29, 2008. Any profit/loss
 arising on cancellation/unwinding of IRS contract are recognized as
 income or expenses for the period.
 
 xvii) Share/Debenture Issue Expenses:
 
 Share/Debenture issue expenses are adjusted against securities premium
 account to the
 
 extent of balance available and thereafter, the balance portion is
 charged off to the Profit and Loss Account, as incurred.
 
 xviii) Equity Index / Stock Futures:
 
 a.  Initial Margin - Equity Index/ Stock Futures, representing the
 initial margin paid, and Margin Deposits representing additional margin
 paid over and above the initial margin, for entering into a contract
 for equity index/ stock futures which are released on final settlement/
 squaring-up of the underlying contract, are disclosed under Loans and
 Advances.
 
 b.  Equity index/ stock futures are marked- to-market on a daily basis.
 Debit or credit balance disclosed under Loans and Advances or Current
 Liabilities, respectively, in the Mark-to-Market Margin - Equity Index/
 Stock Futures Account, represents the net amount paid or received on
 the basis of movement in the prices of index/ stock futures till the
 balance sheet date.
 
 c.  As on the balance sheet date, profit/loss on open positions in
 equity index/ stock futures is accounted for as follows:
 
 - Credit balance in the Mark-to- Market Margin - Equity Index/Stock
 Futures Account, being the anticipated profit, is ignored and no credit
 for the same is taken in the profit and loss account.
 
 - Debit balance in the Mark-to- Market Margin - Equity Index/Stock
 Futures Account, being the anticipated loss, is adjusted in the profit
 and loss account.
 
 d.  On final settlement or squaring-up of contracts for equity
 index/stock futures, the profit or loss is calculated as the difference
 between the settlement/ squaring-up price and the contract price.
 Accordingly, debit or credit balance pertaining to the
 settled/squared-up contract in Mark-to-Market Margin - Equity
 Index/Stock Futures Account after adjustment of the provision for
 anticipated losses is recognised in the profit and loss account. When
 more than one contract in respect of the relevant series of equity
 index/stock futures contract to which the squared-up
 
 contract pertains is outstanding at the time of the squaring-up of the
 contract, the contract price of the contract so squared-up is
 determined using the weighted average cost method for calculating the
 profit/loss on squaring- up.
 
 xix) Leases:
 
 In case of assets taken on operating lease, the lease rentals are
 charged to the profit and loss account in accordance with Accounting
 Standard (AS) 19 - Leases as notified by the Companies (Accounting
 Standards) Rules, 2006
 
 xx) Foreign Currency Transactions:
 
 i.  Transactions denominated in foreign currencies are recorded at the
 exchange rates prevailing on the date of transaction.
 
 ii.  Monetary items denominated in foreign currencies at the year end
 are translated at year end rates. In case of Forward Exchange Contract
 (FEC), the difference between the year-end rate and the rate on the
 date of the contract is recognized as exchange difference and the
 premium on such forward contracts is recognized over the life of the
 forward contract. Any profit/loss arising on cancellation or renewal of
 forward contract is recognized as income or expense for the period.
 
 iii.  Non monetary foreign currency items are carried at cost.
 
 iv.  Any income or expense on account of exchange difference either on
 settlement or on translation is recognized in the Profit and Loss
 Account.
 
 xxi) Provisions, Contingent Liabilities and Contingent Assets:
 
 Provisions are recognised only when there is a present obligation as a
 result of past events and when a reliable estimate of the amount of
 obligation can be made. Contingent liability is disclosed for (1)
 Possible obligations which will be confirmed only by future events not
 wholly within the control of the Company or (2) 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 can not be made.
 
 Contingent Assets are not recognised in the financial statements since
 this may result in the recognition of income that may never be
 realised.