Ekam Leasing & Finance Company Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1. GENERAL INFORMATION

Ekam Leasing and Finance Co. Limited is a Public Limited Company whose shares are listed in BSE. Ekam Leasing and Finance Co. Limited. is a NBFC subject to relevant RBI Guidelines applicable.

2. MATERIAL ACCOUNTING POLICIES

a) Basis of preparation

These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III). These standalone financial statements are presented in INR Lakhs and all values are rounded to the nearest lakhs, except when otherwise indicated.

The Standalone Financial Statements were approved by the Board of Directors of the Company in their meeting held on 30th May, 2025.

The regulatory disclosures as required by Master Directions for Non-Banking Financial Company by Reserve Bank of India (Non-Banking Financial Company — Scale Based Regulation) Directions, 2023 (''the NBFC Master Directions'') to be included as a part of the Notes to Accounts are prepared as per the Ind AS financial statements.

b) Use of estimates and judgements

The preparation of standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires the management to make estimates and assumptions that affect the balances of assets and liabilities, disclosures of contingent liabilities as at the date of the standalone financial statements and the reported amounts of income and expenses for the periods presented. The Company has a policy to review these estimates and underlying assumptions on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.

c) Revenue recognition Interest Income

Under Ind AS 109 interest income is recorded using the effective interest rate (''EIR'') method for all financial instruments measured at amortised cost. The EIR is the rate that discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

Other income

Other income comprises dividend income and gains / (losses) on disposal of investments.. Dividend income is recognized when the right to receive payment is established.

d) Employee Benefits Expense

Provisions of Provident Fund Act & Employee State Insurance Act are not applicable to the Company for the period under consideration.

e) Property, Plant and Equipment

(i) Measurement

Items of Property, plant and equipment, are measured at cost (which includes capitalized borrowing costs, if any) less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment includes its purchase price, duties, taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that it will increase the future economic benefits from the existing asset beyond its previously assessed standard of performance/life. All other expenses on existing Property, plants and equipment, including day to day repair and maintenance and cost of replacing parts are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.

(iii) Derecognition

An item of Property, plant and equipment is derecognized upon its disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the same (calculated as the difference between the net disposal proceeds and its carrying amount) is recognized in the Statement of Profit and Loss in the period the item is derecognized.

(iv) Depreciation

Depreciation is calculated using written down value method over the useful lives of assets and is recognized in the Statement of profit and loss. Depreciation for assets purchased / sold during the period is proportionately charged. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

f) Impairment of Non-financial Assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if available.

If no such transactions can be identified, an appropriate valuation model is used. Impairment losses including impairment on inventories are recognized in the Statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

g) Investment in Subsidiaries and Associate

Investment in Subsidiaries and associates are carried at cost in accordance with the option available in Ind AS 27, ''Separate Financial Statements''. Where the carrying amount of an investment in greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. Upon disposal of investment, the difference between the net disposal proceeds and the carrying amount is credited or charged to the Statement of Profit and Loss.

h) Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet and in the Statement of Cash flows comprise of cash in hand and balance with banks in current accounts.

i) Borrowing Costs

Borrowing cost includes interest and other costs incurred in connection with the borrowing of funds and charged to Statement of Profit & Loss on the basis of effective interest rate (EIR) method. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are recognized as expense in the period in which they occur.

j) Exceptional Items

Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a full understanding of the Company''s financial performance. Items which may be considered exceptional are significant restructuring charges, gains or losses on disposal of investments in subsidiaries, associates and joint venture and impairment losses/ write down in value of investment in subsidiaries, associates and joint venture and significant disposal of fixed assets etc.

k) Provisions and Contingent Liabilities

Provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

l) Tax Expense

Income tax expense represents the sum of the tax currently payable and deferred tax. Current tax and deferred tax is recognized in the Profit and Loss except when it relates to items that are recognized in Other Comprehensive Income.

Current tax

Current tax is the amount of expected tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

Deferred tax

Deferred tax is recognized using the Balance Sheet approach. It represents temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill. The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as a Deferred tax asset if there is convincing evidence that the Company will pay normal income tax in future years. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting year.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

m) Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial Assets

The Company classifies its financial assets in the following measurement categories:

^ Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss).

^ Those measured at amortized cost.

The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them.

Initial recognition and measurement

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.

Subsequent measurement

For purposes of subsequent measurement financial assets are classified in following categories:

^ Financial assets at amortized cost

^ Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and

losses (debt instruments)

^ Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

^ Financial assets at fair value through profit or loss

Financial assets at amortized cost

A ''financial asset'' is measured at the amortized cost if both the following conditions are met:

Business Model Test: The objective is to hold the financial asset to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realize its fair value changes) and;

Cash flow characteristics test: The contractual terms of the financial asset give rise on specific dates to cash flows that are solely payments of principal and interest on principal amount outstanding.

This category is most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of EIR. EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. The EIR amortization is included in other income in profit or loss. The losses arising from impairment are recognized in the profit or loss. This category general applies to trade and other receivables.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognized in the statement of profit and loss.

Financial assets designated at fair value through Other Comprehensive Income (OCI)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement of profit and loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Company''s statement of financial position) when:

^ The rights to receive cash flows from the asset have expired, or

^ the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass through” arrangement and either;

• the Company has transferred substantially all the risks and rewards of the asset, or

• the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the right and obligations that the Company has retained.

Impairment of financial assets

In accordance with IND AS 109, the Company applies expected credit losses (ECL) model for measurement and recognition of impairment loss on the following financial asset and credit risk exposure

^ Financial assets measured at amortized cost;

^ Financial assets measured at fair value through other comprehensive income(FVTOCI);

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

The Company follows “simplified approach” for recognition of impairment loss allowance on:

^ Trade receivables or contract revenue receivables without significant financial element;

^ All lease receivables resulting from the transactions within the scope of Ind AS 116 —Leases

Under the simplified approach, the Company does not track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward looking estimates are analyzed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the statement of profit and loss.

(ii) Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, loans and borrowings, and payables, net of directly attributable transaction costs. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company financial liabilities include loans and borrowings, trade payables, trade deposits, retention money, liabilities towards services, sales incentive and other payables.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in two categories:

^ Financial liabilities at fair value through profit or loss ^ Financial liabilities at amortized cost (loans and borrowings)

Financial liabilities at Fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments.

Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in IND AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to profit and loss. All other changes in fair value of such liability are recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.

Financial liabilities at Amortized cost

After initial recognition, interest-bearing borrowings are subsequently measured at amortized cost using the Effective interest rate method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the Effective interest rate amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the Effective interest rate. The Effective interest rate amortization is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

Offsetting of financial instruments

Financials assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

n) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all potentially dilutive equity shares.

o) Segment Information

The accounting policies adopted for Segment reporting are in line with the accounting policies of the Company with the following additional policies:

Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the Segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to Segments on a reasonable basis have been included under “Unallocable”.

Assets and liabilities have been identified to segments on the basis of their relationship to the operating activities of the Segment. Assets and liabilities, which relate to the enterprise as a whole and are not allocable to Segments on a reasonable basis have been included under “Unallocable”.

p) Fair value measurement

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

A fair value measurement of a non- financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to fair value measurement as a whole ) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

q) Standards issued but not effective

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

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Mar 31, 2014

(i) Basis of preparation of Financial Statements

These financial statements are prepared under the historical cost convention on an accrual basis, in accordance with applicable accounting standards issued by Institute of Chartered Accountants of India and provisions of the Companies Act, 1956.

(ii) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although, these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(iii) Fixed Assets

Tangible fixed assets are stated at cost of acquisition including incidental expenses less depreciation. All costs including financing costs till the assets are ready to be put to use are adjusted to the carrying amount of fixed assets.

(iv) Depreciation

Depreciation has been provided on Written Down Value Method in accordance with the rates prescribed in Schedule XIV of the Companies Act, 1956

(v) Investments

All long term unquoted investments are valued at Cost.

(vi) Loans & Advances

Interest on loan given to M/s North East Papers Pvt. Ltd. & Shri Anil Khurana has not been provided. The loan amount of Rs. 7,00,000/- given to M/s North East Papers Pvt. Ltd. Is doubtful of recovery.

(vii) Revenue Recognition

Interest and other dues are recognized on accrual basis. Interest u/s 244A receivable on Refund Income Income Tax Department shall be accounted for on receipt basis.

(viii) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized subject to consideration of prudence in respect of deferred tax assets on timing differences being the difference in income and accounting that originates in one period and capable of reversal in one or more subsequent period.

(ix) Employee Retirement Benefits

1. Provident Fund & ESI

Provisions of Provident Fund Act & Employee State Insurance are not applicable for the period under consideration.

2. Gratuity Fund Scheme

No provsion for gratuity is required to be made,

(x) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

(xi) Cash Flow Statement

Cash Flows are reported using the Indirect Method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of apst or future cash receipts or payments. The cash flows from operating, investing and financing activities of the company are segregated based on the available infomation.

(Xi) RBI Directions

The Company is an NBFC. RBI guidelines and Pprudential Norms applicable on the company have duly been complied with.

(xiii) Contingent Liabilities and Contingent Assets

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an on going basis and only those having a Contingent Assets are not recognized in the Financial Statement.

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Mar 31, 2013

(i) Basis of preparation of Financial Statements

These financial statements are prepared under the historical cost convention on an accrual basis, in accordance with applicable accounting standards issued by Institute of Chartered Accountants of India and provisions of the Companies Act, 1956.

(ii) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although, these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(iii) Fixed Assets

Tangible fixed assets are stated at cost of acquisition including incidental expenses less depreciation. All costs including financing costs till the assets are ready to be put to use are adjusted to the carrying amount of fixed assets.

(iv) Depreciation

Depreciation has been provided on Written Down Value Method in accordance with the rates prescribed in Schedule XIV of the Companies Act, 1956.

(v) Investments

All long-term unquoted investments are valued at cost.

(vi) Loans & Advances

Interest on loan given to North East Papers Pvt. Ltd. has not been provided as the same is considered doubtful of recovery. The management has decided to defer the provision for doubtful debts for one more year, hoping better recovery prospects.

(vii) Inventories

Inventory of shares is valued at cost.

(viii) Revenue Recognition

Interest and other dues are recognized on accrual basis.

(ix) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized subject to consideration of prudence in respect of deferred tax assets on timing differences being the difference in income and accounting that originates in one period and capable of reversal in one or more subsequent period.

(x) Employee Retirement Benefits

1. Provident Fund

Provisions of Provident Fund Act & Employee State Insurance are not applicable for the period under consideration.

2. Gratuity Fund Scheme

No provision for gratuity is required to be made.

(xi) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

(xii) Cash Flow Statement

Cash Flows are reported using the Indirect Method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of apst or future cash receipts or payments. The cash flows from operating, investing and financing activities of the company are segregated based on the available information.

(xiii) RBI Directions

The Company is an NBFC. RBI guidelines and Ppmdential Norms applicable on the company have duly been complied with.

(xiv) Contingent Liabilities and Contingent Assets

Contingent liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an on going basis and only those having a Contingent Assets are not recognized in the Financial Statement.

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Mar 31, 2012

1 a) The Financial Statements have been prepared on the historical cost convention and in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956, as adopted consistently by the Company ' and as a going concern.

b) The Company follows the Mercantile System of Accounting and recognizes income and expenditure on accrual basis, unless specifically stated to be otherwise.

c) Fixed Assets are stated at cost less accumulated depreciation.

d) Depreciation on assets provided on the basis of Written Down Value (WDV) method.

2. REVENUE RECOGNITION

Interest and other dues are recognized on accrual basis.

3. INVESTMENTS

Investments are classified under two categories i.e. current and non current Investment.

4. STOCK / INVENTORIES :

Stock of Shares is Valued at cost as per last accounting year.

5. RBI DIRECTIONS:

The Company is an NBFC. RBI guidelines and Prudential Norms applicable to the company have duly been complied with.

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Mar 31, 2010

A) The Financial Statements have been prepared on the historical cost convention and in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956, as adopted consistently by the Company and as a going concern.

b) The Company follows the Mercantile System of Accounting and recognizes income and expenditure on accrual basis, unless specifically stated to be otherwise.

c) Fixed Assets are stated at cost less accumulated depreciation.

2. STOCK / INVENTORIES :

Stock of Shares is Valued at cost as per last accounting year.

3. RBI DIRECTIONS :

The Company has followed the applicable provisions of Non Banking Financial (Non deposit accepting or holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 and accordingly a provision of 100% on Doubtful Assets amounting to Rs. 2.90 Crores has already been made up to the year 2000-01 The same has now been adjusted towards Bad Debts written off to the extent of Rs 2,89,95,776/-

6. There is no inflow & outflow of Foreign Exchange during the year.

7 Provision of Provident Fund Act & Employee State Insurance are not applicable for the period under consideration.

8. No provision for gratuity is required to be made.

9. Listing Fees of Bombay Stock Exchange, Delhi Stock Exchange & Ludhiana Stock Exchange amounting to Rs. 22,060/- is outstanding up to the year 2009-10. However the same has been provided on accrual basis

10. Calls in arrears amounting to Rs. 1,13,750/- are outstanding since the public issue made in 1995 have now been received in cash during the period.

11. Balances of the Sundry Creditors & Sundry Debtors are subject to confirmation & reconciliation from the parties concerned.

12. Stock in trade as on 31.03.1010 has been physically verified by the management. The stock of shares is held in physical form.

13. No provision for deferred Tax liability in accordance with AS-22 has been provided.

14. No interest has been provided on a Security deposit of Rs 25 Lacs with State Bank of Patiala due to difference of opinion on the applicability of interest on such deposit. The deposit was advanced on 1sl April 2009.

15. An interest free advance of Rs. 7,00,000/- given to M/s North East Paper & Industries Ltd. is over due for recovery before the financial year 2000-01.