The financial statements have been prepared on a Going Concern basis, on historical cost convention, as per provisions of the Companies Act, 1956 and after taking into account the applicable guidelines issued by the Reserve Bank of India to Non Banking Financial Companies from time to time and in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

Fixed Assets (including assets given on lease upto 31.03.2001) have been stated at cost less accumulated depreciation and impairment, if any. Cost refers to cost of acquisitions/revalued cost.

Long term Investments are valued at cost. Cost refers to actual cost of acquisition / carrying cost. Provisions for diminution in value, if any, is made if decline is permanent nature. Current Investments are valued at lower of cost or market value. Investments in Immovable Properties are valued at cost. Other Investments are stated at cost less provision for decline in value, if any.

Inventories are stated at lower of cost or net realizable value less provision for obsolescence, if any.

Repossessed vehicles in hand are valued at the Principal or Principal and Interest amount due from hirers or at net realisable value, whichever is lower.

a)

Assets on Lease and Assets at Gas Division : Pro-rata on straight line method, as per rates prescribed in Schedule XIV to the Companies Act, 1956.

b)

Other Fixed Assets : Pro-rata on Written Down Value method as per rates prescribed under the Income Tax Act, 1961 or as per rates prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher.

c)

Assets costing Rs.5,000/- or below are fully depreciated in the year of acquisition.

d)

No write off is made in respect of lease relating to leasehold lands.

e)

No depreciation is provided in respect of Investments in Land and Buildings held as Investments, (other than those under development) as the amount set aside under Property Reserve is considered adequate to cover such depreciation.

f)

Depreciation on Land & Building is provided on composite cost, where cost of Land is not seperately ascertained.

Assets are classified into Performing and Non Performing categories based on their record of recovery as prescribed by the Reserve Bank of India's Prudential Norms and after considering adjustments effected, if any. Provisions are being made as per Reserve Bank of India's Prudential Norms.

a)

Finance Charges on hire purchase/ loan against Hypothecation contracts and income from finance lease transactions are computed using Internal Rate of Return method which ensures a constant periodic rate of return on net finance amount outstanding.

b)

Lease Rentals are accounted for as per terms of lease agreements. However, in compliance of the guidance note issued by the Institute of Chartered Accountants of India, and applicable to transactions entered into prior to 01.04.2001, the differential between the Capital Recovery Component comprised (based on the Internal Rate of Return method) in the lease rentals and the depreciation referred to in Para 6(a) above, (for all assets acquired on or beginning from 1st April, 1995 from accounting year 1995-96 and in respect of assets acquired upto 1.4.1995 prospectively from the accounting year 1996-97) is carried to "Lease Equalisation" in the Profit & Loss Account.

c)

Income from Non Performing Assets is recognised when realised.

d)

Bills Discounting Charges are accounted for on accrual basis except in case of Non Performing Assets, wherein it is recognised on realisation basis.

e)

Overdue charges from hires / lessees are accounted for on realisation basis in view of uncertainty thereof.

f)

Interest Income in the Profit & Loss Account is recognised on accrual basis.

g)

Interest on Post Office Savings Bank Account, Insurance claims etc. are accounted for on receipt basis.

h)

Dividend is accounted for on accrual basis when the right to receive dividend is established.

a)

Provision for Gratuity payble to eligible employees and for leave encashment is made based on actuarial valuation.

b)

Providend Fund contribution for all employees is charged to revenue each year

a)

Provision for Gratuity payble to eligible employees and for leave encashment is made on actuatial valuation.

b)

Provident Fund contribution for all employees is charged to revenue each year.

Deferred Tax is recognised, subject to consideration of prudence, on timing differences, representing the difference between the taxable income/ (loss) and the accounting income/ (loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax assets viz. unabsorbed depreciation and carry forward losses are recognised if there is 'virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain impairment based on internal/external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its realisable value. The realisation value is greater of the assets net selling price and value in use.

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if

a)

the Company has a present obligation as a result of past event,

b)

a probable outflow of resources is expected to settle the obligation and

c)

the amount of obligation can be reliably estimated

Reimbursements expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contigent liability is disclosed in the case of.

a)

a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b)

a possible obligation, of which the probability of outflow of resources is remote.

Contingent Assets are neither, recognised nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.