A. Accounting Convention
 
 These accounts have been prepared in accordance with historical cost
 convention, applicable Accounting Standards notified by the Companies
 (Accounting Standards) Rules, 2006, relevant provisions of the
 Companies Act, 1956 and the applicable guidelines issued by the Reserve
 Bank of India (RBI).
 
 B. System of Accounting
 
 The Group adopts accrual concept in the preparation of the accounts.
 The preparation of the 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. The Management believes that the estimates
 used in preparation of the financial statements are prudent and
 reasonable. Future results could differ from these estimates.
 
 C.Investments
 
 (i) Non Banking Financial Company (NBFC)
 
 The Holding Company is regulated as NBFC – IFC (Infrastructure Finance
 Company) and a subsidiary company is regulated as NBFC by the Reserve
 Bank of India (RBI). Accordingly, Investments are classified under two
 categories i.e. Current and Long-Term, and are valued in accordance
 with the RBI guidelines and Accounting Standard 13 on ‘Accounting for
 Investments as notified by the Companies (Accounting Standards) Rules,
 2006.
 
 - ‘Long-Term Investments are carried at acquisition cost. A provision
 is made for diminution other than temporary on an individual basis.
 
 ‘Current Investments are carried at the lower of cost and fair value
 on an individual basis. Commercial Papers, Certificate of Deposits and
 Treasury Bills are valued at carrying cost.
 
 (ii) Other than NBFC
 
 ‘Long-Term Investments are valued at cost except where there is a
 diminution in value other than temporary in which case the carrying
 value is reduced to recognise the decline. ‘Current Investments are
 valued at lower of cost and market value.
 
 D. Infrastructure Loans and Advances
 
 In accordance with the RBI guidelines, all loans and advances are
 classified under any of four categories i.e. (i) Standard Assets, (ii)
 Sub-standard Assets, (iii) Doubtful Assets and (iv) Loss Assets.
 
 E. Fixed Assets
 
 Fixed assets are stated at cost of acquisition, including any cost
 attributable for bringing the asset to its working condition, less
 accumulated depreciation.
 
 F. Intangible Assets
 
 Intangible Assets comprising of system software are stated at cost of
 acquisition, including any cost attributable for bringing the asset to
 its working condition, less accumulated amortisation. Any technology
 support cost or annual maintenance cost for such software is charged
 annually to the Profit and Loss Account. Consideration paid by a
 subsidiary for transfer of Tenancy Rights is capitalised as an
 Intangible Asset.
 
 G.Impairment
 
 The Group assesses at each Balance Sheet date whether there is any
 indication that an asset may be impaired based on internal/external
 factors. If any such indication exists, the Group 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 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 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 the depreciable historical cost.  H. Provisions and
 Contingencies
 
 Adequate provision for diminution is made as per the regulatory
 guidelines applicable to Non-Performing Advances and the provisioning
 policy of the Holding Company in respect of Loans and Debentures in the
 nature of advances.
 
 - Provision on restructured advances is arrived at in accordance with
 the RBI guidelines.
 
 Provision for Contingencies is made as per the provisioning policy of
 the Holding Company, which includes a general provision at 0.25% of the
 outstanding standard assets in accordance with the RBI guidelines and
 provision under Section 36(1)(viia) of the Income-tax Act, 1961.  I.
 Depreciation and Amortisation - Tangible Assets
 
 Depreciation on Fixed Assets, excluding certain electronic items, is
 provided on the written down value method, at the rates prescribed by
 Schedule XIV of the Companies Act, 1956. Certain electronic items are
 depreciated over a period of two years on straight line method based on
 the Managements estimate of the useful life of assets. Depreciation on
 additions during the year is provided on a pro-rata basis. Assets
 costing
 
 less than Rs. 5,000 each are written off in the year of capitalisation.
 Leasehold improvements are amortised on straight line method over the
 primary period of the lease, except in case of a subsidiary where
 leasehold improvements are amortised on straight line method over
 period of extended lease or five years whichever is shorter.
 
 - Intangible Assets
 
 Intangible assets consisting of computer software are being amortised
 over a period of three years on straight line method. Tenancy Rights
 are amortised over a period of ten years on straight line method.
 
 J. Operating Leases
 
 Leases of assets under which all the risks and benefits of ownership
 are effectively retained by the lessor are classified as operating
 leases.  Payments made under operating leases are charged to the Profit
 and Loss Account on a straight line basis over the lease term. Lease
 rental income is recognised in accordance with Accounting Standard 19
 on ‘Leases as notified by the Companies (Accounting Standards) Rules,
 2006.  Initial direct costs incurred specifically for operating leases
 are recognised as expenses in the year in which they are incurred.
 
 K. Employee Benefits
 
 - Defined Contribution Plans
 
 The Groups contribution paid/payable during the year towards Provident
 Fund and Superannuation Fund is charged to the Profit and Loss Account.
 
 - Defined Benefit Plan
 
 The net present value of the Groups obligation towards gratuity to
 employees is actuarially determined as at the Balance Sheet date based
 on the projected unit credit method. Actuarial gains and losses are
 recognised in the Profit and Loss Account.
 
 L.Income-Tax
 
 The accounting treatment for income-tax is based on Accounting Standard
 22 on ‘Accounting for Taxes on Income as notified by the Companies
 (Accounting Standards) Rules, 2006. The provision made for income-tax
 in the accounts comprises both, the current tax and the deferred tax.
 The deferred tax assets and liabilities for the year arising on account
 of timing differences are recognised in the Profit and Loss Account and
 the cumulative effect thereof is reflected in the Balance Sheet.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the Balance Sheet date. Deferred
 tax assets, other than on carry forward losses and unabsorbed
 depreciation, are recognised only to the extent that there is
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.
 Deferred tax assets on carry forward losses and unabsorbed depreciation
 is recognised only to the extent there is virtual certainty supported
 by convincing evidence that there will be sufficient future taxable
 income.
 
 M. Revenue Recognition
 
 (a) Interest and other dues are accounted on accrual basis except in
 the case of non-performing assets (NPAs) where it is recognised upon
 realisation, as per the income recognition and asset classification
 norms prescribed by the RBI.
 
 (b) Income on discounted instruments is recognised over the tenure of
 the instrument on straight line basis.
 
 (c) Dividend is accounted on accrual basis when the right to receive is
 established.
 
 (d) Front end fees on processing of loans are recognised upfront as
 income.
 
 (e) Brokerage is recognised on trade date basis and is net of statutory
 payments.
 
 (f) Management Fees are recognised on accrual basis.
 
 (g) Performance Fees relating to Investment Advisory are recognised on
 an annual basis.
 
 (h) All fees are recognised when reasonable right of recovery is
 established, revenue can be reliably measured and as and when they
 become due except commission income on guarantees, is recognised
 pro-rata over the period of the guarantee.
 
 (i) Premium on interest rate reduction is accounted on accrual basis
 over the residual life of the loan.
 
 (j) Profit/loss earned on sale of investments is recognised on trade
 date basis. Profit/loss on sale of investments is determined based on
 the FIFO cost for current investments and weighted average cost for
 long-term investments.
 
 (k) Profit on securitisation is recognised over the residual life of
 the loan in terms of the RBI guidelines. Profit on sale of loan assets
 through direct assignment, without any recourse obligation, is
 recognised at the time of sale. Net loss arising on account of
 securitisation and direct assignment of loan assets is recognised at
 the time of sale.
 
 (l) Revenue from Power Supply is accounted on accrual basis.
 
 (m) Income from trading in derivatives is recognised on final
 settlement or squaring up of the contracts.
 
 N. Foreign Currency Transactions
 
 Foreign currency transactions are accounted at the exchange rates
 prevailing on the dates of the transactions. Foreign currency monetary
 items outstanding as at the Balance Sheet date are reported using the
 closing rates of exchange. Gains and losses resulting from the
 settlement of such transactions and translation of monetary assets and
 liabilities denominated in foreign currencies are recognised in the
 Profit and Loss Account. Premium in respect of forward contracts is
 accounted over the period of the contract. Forward contracts
 outstanding as at the Balance Sheet date are revalued at the closing
 rate.
 
 [See Note 2 (I)(viii)]
 
 0. Derivatives
 
 - Interest Rate Swaps
 
 Interest rate swaps are booked with the objective of managing the
 interest rate risk on liabilities. Interest rate swaps in the nature of
 hedge are recorded on an accrual basis and these transactions are not
 marked to market. Any resultant gain or loss on termination of hedge
 swaps is amortised over the life of swap or underlying asset/liability
 whichever is shorter.
 
 - Currency Interest Rate Swaps
 
 Currency interest rate swaps in the nature of hedge are recorded on an
 accrual basis and these transactions are not marked to market. Any
 resultant gain or loss on termination of hedge swaps is amortised over
 the life of swap or underlying asset/liability whichever is shorter.
 The foreign currency balances on account of principal of cross currency
 swaps outstanding as at the Balance Sheet date are revalued using the
 closing rate.
 
 - Stock Futures
 
 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 – Stock Futures Account,
 represents the net amount paid or received on the basis of movement in
 the prices of Stock Futures till the Balance Sheet date.
 
 As on the Balance Sheet date, the profit/loss on open positions in
 Stock Futures are accounted for as follows:
 
 (a) Credit balance in the Mark-to-Market Margin – Stock Futures
 Account, being anticipated profit, is ignored and no credit is taken
 in the Profit and Loss Account.
 
 (b) Debit balance in the Mark-to-Market Margin – Stock Futures
 Account, being anticipated loss, is recognised in the Profit and Loss
 Account.
 
 On final settlement or squaring-up of contracts for 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 – Stock Futures Account is recognised in the
 Profit and Loss Account upon expiry of the contracts. When more than
 one contract in respect of the relevant series of 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 method
 for calculating profit/loss on squaring-up.
 
 Initial Margin Account – Stock Futures, representing initial margin
 paid is disclosed under Loans and Advances.
 
 P. Employee Stock Option Scheme
 
 The Holding Company has formulated Employee Stock Option Schemes (ESOS)
 in accordance with the SEBI (Employee Stock Option Scheme and Employee
 Stock Purchase Scheme) Guidelines, 1999. The Schemes provides for grant
 of options to employees of the Holding Company and its Subsidiaries to
 acquire equity shares of the Holding Company that vest in a graded
 manner and that are to be exercised within a specified period. In
 accordance with the SEBI Guidelines, the excess, if any, of the closing
 market price on the day prior to the grant of the options under ESOS
 over the exercise price is amortised on a straight line basis over the
 vesting period.