Notes forming part of the Financial Statements for the year ended March 31, 2016

1 Corporate information

TCI Finance Limited ("the Company") is a public company domiciled in India. Its shares are listed in Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Company is a "Loan company" engaged in the business of Non Banking Financial Institution as defined in section 45I(a) of the Reserve Bank of India Act , 1934.

2 Significant Accounting Policies

2.1 Basis of accounting and brparation of financial statements

The financial statements of the Company are brpared on accrual basis, under historical cost convention. The Financial Statements of the Company have been brpared in accordance with G.A.A.P in India ("Indian GAAP") to comply with accounting standards specified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act/ the Companies Act, 1956, as applicable.

The accounting policies adopted in the brparation of financial statements are consistent with those of the brceeding year.

2.2 Use of Estimates

The brparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

2.3 Cash Flow Statement

The Cash Flow Statement is brpared under "Indirect method" in accordance with Accounting Standard-3 on Cash Flow Statements notified in section 133 of the Companies Act, 2013. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.4 Revenue Recognition

2.4.1 Interest Income

Interest income is recognised on accrual basis except in case of non-performing assets. Overdue interest is recognised as income on realisation.

2.4.2 Other Income

Dividend income is accounted on an accrual basis when the Company’s right to receive the dividend is established.

Income from Services is recognised on accrual basis.

2.5 Fixed Assets:

2.5.1 Tangible Assets: Fixed assets are carried at cost of acquisition or construction less accumulated debrciation.

The cost includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

2.5.2 Intangible Assets: Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any.

2.6 Debrciation and Amortisation

Debrciable amount of assets is the cost of an asset, or other amount substituted for cost less its estimated residual value.

Debrciation on tangible fixed assets has been provided on the straight line method as per the useful lives brscribed in schedule II to the Companies Act, 2013 .

Intangible assets are amortised, on the straight line method on the useful lives brscribed in schedule II to the Companies Act, 2013 .

2.7 Investments

Investments are classified as Long term and Current. Long term Investments are carried at cost less provision for other than temporary diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

2.8 Employee Benefits

(i) Provident fund is a defined contribution plan and the contributions as required by the statute to Employees Provident Fund Organisation are charged to Statement of Profit and Loss when due.

(ii) Gratuity liability is defined benefit obligation and is wholly funded. The Company accounts for liability for future gratuity benefits based on actuarial valuation. Actuarial gains / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iii) Compensated Absences - The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee is recognized during the period when the employee renders the service.

2.9 Reserve Bank of India Prudential Norms

The Company follows the guidelines issued by the Reserve Bank of India, in respect of income recognition, asset classification and valuation of investments. Provision for standard assets is made in terms of the notification DNBS.222/CGM(US)-2011 dated January 17, 2011 issued by Reserve Bank of India.

2.10 Taxes:

2.10.1 Current Tax: Provision for current tax is made based on the taxable income computed for the year under the Income Tax Act, 1961.

2.10.2 Deferred Taxes: Deferred tax is recognised on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets are reviewed at each balance sheet date for their realisability.

2.11 Earnings Per Share:

Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

2.12 Provisions, Contingent liabilities liabilities and Contingent Assets:

The Company recognises provisions when there is brsent obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure for Contingent liabilities is made when there is a possible obligation or brsent obligations that may, but probably will not, require an outflow of resources. Contingent assets are neither recognised nor disclosed in the financial statements.

3 Additional information to the Financial Statements

3.1 Inter-Company loans/deposits given by the Company are on the basis that one of the main objects of the Company is to act as financiers. Accordingly, the Company has been advised that Section 186 of the Companies Act, 2013 is not applicable to the Company

3.2  Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

For and on behalf of the Board

Hemant Kaul Chairman DIN No : 00551588

S M Jalan  Director DIN No : 00324182

Lakshmi Sharma Company Secretary M.No: A32617

Ramesh Sivaraman Manager - Chief Executive