A.  Basis of preparation of Financial Statements
 
 The accompanying financial statements are prepared and presented under
 the historical cost convention, on the accrual basis of accounting
 unless otherwise stated and comply with the Accounting Standards
 prescribed by the Companies (Accounting Standard) Rules, 2006 and the
 relevant provisions of the Companies Act, 1956 to the extent
 applicable. The financial statements are presented in Indian rupees
 rounded off to the nearest crore upto two decimal places.
 
 The Company complies in all material respects, with the prudential
 norms relating to income recognition, asset classifcation and
 provisioning for bad and doubtful debts and other matters, specified in
 the directions issued by the Reserve Bank of India (RBI) in terms of
 Non-Banking Financial Companies Prudential Norms (Reserve Bank)
 Directions, 2007, as applicable to it.
 
 C.  Use of Estimates and Judgments
 
 The preparation of financial statements is in conformity with generally
 accepted accounting principles (GAAP) and requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosure of contingent liabilities on the
 date of the financial statements. The estimates and assumptions used in
 the accompanying financial statements are based upon management''s
 evaluation of the relevant facts and circumstances as of the date of
 the financial statements. Actual result could differ from those
 estimates. Any revision to accounting estimates is recognised
 prospectively in current and future periods.
 
 D.  Revenue Recognition
 
 i) Interest Income
 
 Interest income is recognised in the profit and Loss Account as it
 accrues except in the case of Non Performing Assets (NPAs) where it
 is recognised, upon realisation.
 
 ii) Dividend Income
 
 Dividend income is recognised when the right to receive payment is
 established.
 
 iii) Income from Investments
 
 profit earned from sale of securities is recognised on a trade date
 basis. The cost of securities is computed based on weighted average
 basis.
 
 iv) Lease Rental Income
 
 Income from operating lease is recognised as rental as per the lease
 agreement over the period of lease.
 
 v) Discount on investments
 
 The difference between the acquisition cost and face value of debt
 instruments is recognised as interest income over the tenor of the
 instrument.
 
 vi) Redemption Premium on Investments in Preference Shares
 
 Redemption premium on investments in Preference shares is recognised as
 income over the tenor of the investment.
 
 vii) Share of profits or Losses in Partnership Firm
 
 Share of profit/loss on share in partnership firm is accounted for once
 the amount of the share of profit/loss is ascertained and
 credited/debited to the Company''s account in the books of the
 partnership frm.
 
 viii) Loan Processing Fee Income
 
 Loan processing fee income is accounted for upfront as and when it
 becomes due.  ix) Management fee income
 
 Management fee income is recognized based on the contractual terms with
 the parties.
 
 x) Income from Assignment / Securitisation
 
 a) In case of assignment of loans, the assets are derecognised when all
 the rights, title, future receivables and interest thereof along with
 all the risks and rewards of ownership are transferred to the
 purchasers of assigned loans. On derecognition, the difference between
 book value of the loans assigned and consideration received, as reduced
 by the estimated provision for loss/expenses and incidental expenses
 related to the transaction, is recognised as gain or loss arising on
 assignment.
 
 b) In case of securitisation of loans, the transferred loans are
 de-recognised and gains/losses are accounted for only if the Company
 surrenders the rights to benefits specified in the underlying securitised
 loan contract. In accordance with the RBI guidelines for securitisation
 of standard assets, which is effective from February 1, 2006, the
 Company has recognised any loss arising from securitisation immediately
 at the time of sale and premium arising from securitisation is
 amortized over the life of securities issued or to be issued by the
 special purpose vehicle to which the assets are sold.  Income on
 retained interest in securitised assets is booked on accrual basis.
 
 E.  Fixed Assets
 
 Fixed assets are stated at cost of acquisition less accumulated
 depreciation. Cost includes all expenses incidental to the acquisition
 of the fixed assets.
 
 F.  Leased Assets
 
 All assets given on operating lease are shown in fixed assets net of
 depreciation.
 
 Initial direct costs in respect of leases are expensed in the year in
 which such costs are incurred.
 
 G.  Intangible Assets
 
 Intangible assets comprising of software purchased / developed and
 licensing costs.
 
 H.  Depreciation / Amortisation
 
 Depreciation on fixed assets, lease assets and intangible assets are
 provided as follows:
 
 i) Own assets : All assets other than lease hold improvements, on
 Written Down Value method at the rates and in the manner prescribed in
 Schedule XIV to the Companies Act, 1956 and lease hold improvements are
 amortised over the primary period of the lease on Straight Line Basis.
 
 ii) Leased assets: Depreciated on Straight Line Method over the useful
 life of assets. The estimated useful lives of the assets for the
 different types of assets are:
 
 a) Vehicle for personal use – 8 years
 
 b) Vehicle for commercial use (Taxi) – 6 years
 
 c) Vehicle for commercial use (Lorries) – 8 years
 
 d) Plant & Machinery – 8 years
 
 iii) Intangible Assets : Intangible Assets are depreciated on straight
 line basis over the useful life of the software up to a maximum of five
 years commencing from the month in which such software is first
 installed.
 
 The Company provides pro-rata depreciation from the day the asset is
 put to use and for any asset sold, till the date of sale.
 
 I.  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 is less than the 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 depreciable historical cost.
 
 J.  Investments
 
 Investments are classified as long term or current based on intention of
 the management at the time of purchase.
 
 Current investments are valued, scrip wise, at cost or fair value,
 whichever is lower.
 
 Long-term investments are carried at carrying cost less diminution in
 value which is other than temporary, determined separately for each
 individual investment.
 
 K.  Stock-in-trade
 
 Securities held as stock-in-trade are valued scrip wise at weighted
 average cost or fair value, whichever is lower.
 
 L.  Assets Held for Sale
 
 Assets held for sale are valued at cost or market value, whichever is
 lower.
 
 M.  Repossession of Assets
 
 Assets repossessed against the settlement of loan are carried in the
 balance sheet at outstanding loan amount or market value, whichever is
 lower. The difference between the outstanding loan amount and the
 market value is charged to profit and Loss Account in the year of
 repossession of assets.
 
 N.  Loan Origination/Acquisition Cost
 
 The direct commission cost incurred for the loan origination is written
 off over the average tenure of the loan.
 
 O.  Security of Loans Given
 
 Housing loans/loans against property granted are secured by equitable
 registered mortgage of property and / or undertaking to create a
 security. Secured loans in the nature of commercial vehicle, auto
 finance are secured against hypothecation of respective vehicle.
 
 P.  Discount on Commercial Paper
 
 The difference between the issue price and the redemption value of
 commercial papers is apportioned on time basis and recognised as
 discounting expense.
 
 Q.  Employee Retirement benefits
 
 i) Provident Fund
 
 Contributions payable to the recognised provident fund, which is a
 defined contribution scheme, are charged to the profit and Loss Account.
 
 ii) Gratuity
 
 The Company''s gratuity benefit scheme is a defined benefit plan. The
 Company''s net obligation in respect of the gratuity benefit scheme is
 calculated by estimating the amount of future benefit that employees
 have earned in return for their service in the current and prior
 periods; that benefit is discounted to determine its present value, and
 the fair value of any plan assets, if any, is deducted.
 
 The present value of the obligation under such defined benefit plan is
 determined based on actuarial valuation using the Projected Accrued
 benefit Method (same as Projected Unit Credit Method), which recognises
 each period of service as giving rise to additional unit of employee
 benefit entitlement and measures each unit separately to build up the
 final obligation.
 
 The obligation is measured at the present value of the estimated future
 cash flows. The discount rates used for determining the present value of
 the obligation under defined benefit plan, are based on the market yields
 on Government securities as at the Balance Sheet date.
 
 Actuarial gains and losses are recognised immediately in the profit and
 Loss Account.
 
 iii) Leave Encashment
 
 Leave encashment which is a defined benefit, is accrued for based on an
 actuarial valuation at the Balance Sheet date carried out by an
 independent actuary.
 
 iv) Compensated Absences
 
 The employees of the Company are entitled to compensated absence. The
 employees can carry forward a portion of the unutilised accrued leave
 balance and utilise it in future periods. The Company records an
 obligation for compensated absences in the period in which the employee
 renders the service that increases the entitlement. The Company
 measures the expected cost of compensated absence as the amount that
 the Company expects to pay as a result of the unused entitlement that
 has accumulated at the balance sheet date.
 
 R.  Employee Stock Option Scheme (ESOS)
 
 The Employees Stock Option Scheme (the Scheme) provides for grant of
 equity shares of the Company to Directors (including whole-time) and
 employees of the Company and its subsidiaries. The Scheme provides that
 employees are granted an option to acquire equity shares of the Company
 that vests in a graded manner. The options may be exercised within a
 specified period. The Company follows the intrinsic value method to
 account for its stock-based employee compensation plans. Compensation
 cost is measured as the excess, if any, of the fair market price of the
 underlying stock over the exercise price on the grant date and is
 amortized over the vesting period of the option on a Straight Line
 Basis.
 
 The fair market price is the latest closing price, immediately prior to
 the date of the Board of Directors meeting in which the options are
 granted, on the stock exchange on which the shares of the Company are
 listed. If the shares are listed on more than one stock exchange, then
 the stock exchange where there is highest trading volume on the said
 date, is considered.
 
 S.  Foreign Currency Transactions
 
 Transactions denominated in foreign currencies are normally recorded at
 the exchange rate prevailing at the time of the transaction.  Exchange
 differences, if any arising out of transactions settled during the year
 are recognised in the profit and Loss Account.
 
 Monetary assets and liabilities denominated in foreign currencies at
 the year end are restated at year end rates.
 
 T.  Borrowing Costs
 
 Borrowing costs, which are directly attributable to the
 acquisition/construction of fixed assets, till the time such assets are
 ready for intended use, are capitalised as part of the cost of the
 assets. Other borrowing costs are recognised as an expense in the year
 in which they are incurred. Brokerage costs directly attributable to a
 borrowing are expended over the tenure of the borrowing.
 
 U.  Operating Leases
 
 Lease payments for assets taken on an operating lease are recognised as
 an expense in the profit and Loss Account on a Straight Line Basis over
 the lease term.
 
 V.  Earnings Per Share
 
 The basic earnings per share is computed by dividing the net profit /
 loss attributable to the equity shareholders for the period by the
 weighted average number of equity shares outstanding during the
 reporting period. Diluted earnings per share reflect the potential
 dilution that could occur if securities or other contracts to issue
 equity shares were exercised or converted during the year. Diluted
 earnings per share is computed by dividing the net profit after tax by
 the weighted average number of equity shares and dilutive potential
 equity shares outstanding during the year.
 
 In computing dilutive earnings per share, only potential equity shares
 that are dilutive and that reduce profit / loss per share are included.
 
 W.  Provisions for Non Performing Assets (NPA) and Doubtful Debts
 
 Assets including loans and advances, receivables are identifed as bad/
 doubtful based on the duration of the delinquency.  The duration is set
 at appropriate levels for each product. NPA provisions are made based
 on the management''s assessment of the degree of impairment and the
 level of provisioning meets the prudential norms prescribed by RBI.
 
 X.  Provisions for Standard Assets
 
 Provisions on Standard Assets are made in line with the prudential
 norms prescribed by RBI.
 
 Y.  Taxation
 
 Income tax expense comprises current tax (i.e. amount of tax for the
 period determined in accordance with the income tax law), deferred tax
 charge or credit (refecting the tax effects of timing differences
 between accounting income and taxable income for the period).
 
 Deferred Tax
 
 The deferred tax charge or credit and the corresponding deferred tax
 liabilities or assets are recognised using the tax rates that have been
 enacted or substantively enacted by the balance sheet date. Deferred
 tax assets are recognised only to the extent there is reasonable
 certainty that the assets can be realised in future; however, where
 there is unabsorbed depreciation or carried forward loss under taxation
 laws, deferred tax assets are recognised only if there is virtual
 certainty of realisation of such assets.  Deferred tax assets are
 reviewed as at each balance sheet date and written down or written up
 to reflect the amount that is reasonably / virtually certain (as the
 case may be) to be realised.
 
 Z.  Provisions, Contingent Liabilities and Contingent Assets
 
 The Company creates a provision when there is a present obligation as a
 result of past events and it is probable that there will be outflow of
 resources and a reliable estimate of the obligation can be made of the
 amount of the obligation. Contingent liabilities are not recognised but
 are disclosed in the notes to the financial statements. A disclosure for
 a contingent liability is made when there is a possible obligation or a
 present obligation that may, but probably will not, require an outflow
 of resources. When there is a possible obligation or a present
 obligation in respect of which the likelihood of outflow of resources is
 remote, no provision or disclosure is made.
 
 Provisions are reviewed at each balance sheet date and adjusted to
 refect the current best estimate. If it is no longer probable that the
 outflow of resources would be required to settle the obligation, the
 provision is reversed.
 
 Contingent assets are not recognised in the financial statements.
 However, contingent assets are assessed continually and if it is
 virtually certain that an economic benefit will arise, the asset and
 related income are recognised in the period in which the change the
 change occurs.