A) SIGNIFICANT ACCOUNTING POLICIES
 
 1) General:
 
 The financial statements have been prepared on the historical cost
 convention on accrual basis and in accordance with generally accepted
 accounting principles in India.
 
 2) Revenue Recognition:
 
 a) Hire-Purchase finance charges are recognised under the : Internal
 Rate of Return method for agreements executed on or after 1st April
 2001 and for all earlier agreements under the Sum Of Digits method
 and the additional finance charges are recognised as per the terms of
 the agreements.
 
 b) Income on Lease transactions are recognized on the basis of Internal
 Rate of Return method and additional finance charges are recognized as
 per the terms of the agreements.
 
 c) Interest/Additional Interest on loans is recognized at contracted
 rates.
 
 d) The transaction of securitisation is in the nature of sale of
 portfolio. Gain or loss arising on securitisation being difference
 between book value of securitised assets and consideration for the
 same, is recognised in the year of transfer of assets.
 
 e) Income from power generation is recognised on supply of power to the
 grid.
 
 f) Income from services is recognised as per the terms of the
 contracts.
 
 g) The prudential norms for income recognition and provisioning for bad
 and doubtful debts prescribed by the Reserve Bank of India for
 Non-Banking Financial Companies have been followed.
 
 3) Fixed Assets and Depreciation:
 
 a) Fixed Assets have been stated at historical cost less accumulated
 depreciation and Impairment Loss.
 
 b) Depreciation on Fixed Assets has been provided under Straight Line
 Method at the rates prescribed under Schedule XIV of the Companies Act,
 1956.
 
 i. On the Assets acquired up to 15.12.93 at the rates applicable to
 said Assets till that date.
 
 ii. On the Assets acquired on or after 16.12.93 at revised rates
 prescribed in the said Schedule XIV.
 
 iii. Assets costing Rs.5000/- or less have been fully depreciated.
 
 c) The depreciation for the year includes the difference between the
 book value of the leased assets and the value realised in respect of
 the termination of the said assets during the year. In respect of the
 Leased assets, lease equalisation/adjustment accounts are created for
 the shortfall in Capital recovery and adjusted in Depreciation/Fixed
 Assets.
 
 4) Investments:
 
 All the Investments are classified as Long Term Investments by the
 management and are valued at cost in terms of Non Banking Financial
 Companies Prudential Norms (Reserve Bank) Directions, 1998 and
 provision is made to recognize any decline in the value of investments
 other than temporary. The Profit/Loss on the sale of investments is
 dealt with at the time of actual sale/redemption.
 
 5) Stock on Hire :
 
 Stock under hire-purchase agreements is stated at the amount advanced
 including finance charges, additional finance charges and expenses
 recoverable, as reduced by the amounts received upto 31st March 2005
 and net of assets securitised.
 
 6) Financial Lease :
 
 As per AS-19 on leases issued by The Institute of Chartered Accountants
 of India, assets given on Financial Lease after 01/04/2001 onwards are
 stated at the amount advanced including finance charges, additional
 financial charges and expenses recoverable as reduced by the amounts
 received upto 31st March 2005.
 
 7) Hypothecation Loans :
 
 Hypothecation Loans are stated at the amount advanced including
 interest, additional finance charges and expenses recoverable, as
 reduced by the amounts received upto 31st March 2005 and net of assets
 securitised.
 
 8) Equity share and Preference share Issue expenses :
 
 Equity Share and Preference Share issue expenses are written off over a
 period of 10 years.
 
 9) Expenses on Mobilisation of Deposits/Debentures:
 
 Expenses on mobilisation of deposits/debentures have been charged to
 Profit & Loss Account in the year they are incurred.  However expenses
 incurred upto 31.03.2003 have been charged to Profit & Loss Account on
 the basis of duration of deposits/debentures.
 
 10) Retirement Benefits:
 
 a) The monthly contributions towards Provident Fund and Employee's
 State Insurance Scheme are charged against revenue.
 
 b) Liability in respect of gratuity and leave encashment to employees
 is accounted on the basis of actuarial valuation.
 
 11) Lease Portfolio Management Scheme:
 
 a) The Lease rentals payable and the lease rentals receivable under the
 scheme are accounted based on the terms of the said lease agreements,
 and the additional finance charges are recognised as per the terms of
 the Agreements.
 
 b) The security deposit paid and received relating to these
 transactions are set off and the net amount appears in the Balance
 Sheet under the head Security Deposits. The consequential adjustments,
 if any, required in respect of the said Deposits will be made at the
 time of termination of Lease/Sub Lease Agreements.