a) The inventory has turned NPA hence the same is treated as Non-Current Asset.

b) Other Assets including some bank balances which are disputed / inaccessible have been treated as non-current.

c) Police has submitted a charge-sheet with the criminal court against fraud perputuated by two employees in 2008-09 involving an amount of Rs. 140.62 lakhs. However full provisions has been made against the amount.

d) On recommendation from Registrar of Companies, Kolkata, Ministry of Corporate Affairs, Government of India directed Serious Fraud Investigation Office (SFIO) to carry out investigation against the company under section 235 of the Companies Act, 1956 which has been partially completed and follow up action in respect of them has been initiated.

e) Positive balance lying in the current accounts with the members of the consortium bank, i.e. Rs.162.11 Lacs (P.Y. Rs.162.11 Lacs) in UCO Bank, Rs.0.19 Lacs (P.Y. Rs.0.19 Lacs) in Bank of Baroda, Rs.3.01 Lacs (P.Y. Rs.3.01 Lacs) in Canara Bank, Rs.0.10 Lacs (P.Y. Rs.0.10 Lacs) in Central Bank of India, Rs.0.01 Lacs (P.Y. Rs.0.01 Lacs) in United Bank of India, Rs.42.53 Lacs (P.Y. Rs.42.53 Lacs) in Indian Overseas Bank, Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in State Bank of Mysore, Rs.0.20 Lacs (P.Y. Rs.0.20 Lacs) in State Bank of Travancore amounting in total Rs 208.20 Lacs (P.Y. Rs 208.20 Lacs) remain unconfirmed and inaccessible for the reasons stated in Note 2.3.ix.

f) Balance of Rs.2.20 Lacs (P.Y Rs 2.20 Lacs) from other Banks also remain unconfirmed.

g) Fixed deposit made by the company with the members of the consortium bank, i.e. Rs.13.46 Lacs (P.Y. Rs.13.46 Lacs) with Bank of Baroda, Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in Indian Overseas Bank and with other bank amounting to Rs.0.25 Lacs (P.Y. Rs.0.25 Lacs) amounting in total Rs 13.76 Lacs (P.Y. Rs 13.76 Lacs) remain unconfirmed and accordingly was provided for.

h) Other receivable forming part of other current assets represents dues from Managing Director (Rs. 7.23 Lakhs).

i) Adequate provisions is lying in the books against all doubtful assets.

2.1 : FINANCE COST

a) Subsequent to cessation of SWAP agreement with UCO Bank, foreign currency loan has been valued at the rate prevailing as at close of 31.03.2014 and exchange difference arising from foreign currency borrowing to the extent that they are regarded as an adjustment to interest cost shown above.

2.2 RBI has cancelled the Certificate of Registration of the Company to carry out Non-Banking Financial activities of the Company vide it's order dated 31st March, 2005 against which Company has preferred an appeal before appellate authority for NBFC, Joint Secretary, Ministry of Finance, Govt. of India, New Delhi which is also pending. In view of the above, the accounts of the company has been prepared on going concern concept based on the legal opinion obtained.

2.3 The Company has complied with the guidelines issued by the Reserve Bank of India in respect of Prudential Norms for income recognition, accounting standards, provisions/ write-downs of bad and doubtful debts unless mentioned otherwise except for maintaining excess provision against Non Performing Assets (NPA) to cover any future eventualities.

2.4 Disclosure regarding Contingent Liabilities :

a) Claims/Disputed liabilities not acknowledged as debt

The Company has received the following demands which are disputed by the Company and are not provided for:

Nature of Contingent  Status of the     As at          As at
liability             case              31st March     31st March
                                        2014           2013 
                                        (Rs. in lacs)  (Rs. in lacs)

Contingent liability  The disputed 
w.r.t Central         demand is pending
and State Sales Tax   before W.B.Comm
(A.Y. 1995-1996       ercial Taxes
to 2004-2005)         Appellate & 
                      Revisional Board.    27.50         27.50

Total                                      27.50         27.50

b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year Rs.26.53 lacs) was issued in favour of Assistant Commissioner of Commercial Tax, Bangalore against an appeal preferred by the company and pending before the Karnakata Appellate Tribunal for Commercial Tax at Bangalore.

c) UTKAL Auto has filed a claim against the company before Arbitrator at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs. 76.90 Lacs) against which the company filed a counter claim of Rs.482.74 lacs against UTKAL Auto before the Arbitrator. An award was passed on 31st December, 2011 and the claim is partly accepted amounting to Rs.2.78 lacs with interest at the rate 12% from 1st September, 2006 and the counter claim was rejected. An appeal has been filed in the Hon'ble High Cort of Calcutta against the said order which was admitted on 15th May, 2012 by the Hon'ble High Court.

2.5 No exercise of impairment was undertaken as authorised under para vi of AS 28.

2.6 Segement Reporting as per Accounting Standard - 17 prescribed under the Act.

The company is primarily engaged in the business of Hire Purchase and Leasing. Revenue from sale of power has not exceeded 10% of total revenue including write back. Hence, there is no other reportable segment as defined under the Accounting Standard 17 "Segment Reporting" issued by The Companies (Accounting Standards) Rules, 2006.

2.7 Disclosure for Lease under Accounting Standard (AS-19)

All the Lease deals of the company has already been matured. Hence, no separate disclosure under AS-19 is required.

2.8 Information pursuant to Accounting Standard (AS-22)

In view of uncertainty of future profits net deferred tax asset arising as at 31.03.2014 has not been recognized in the books of accounts.

2.9 Related Party disclosures

Related party disclosures as required under Accounting Standard (AS) - 18 on 'related party disclosures' issued by the Institute of Chartered Accountants of India are given below :

Nature of Relationship Name of the Party

1. Subsidiary Company Nicco Insurance Agents & Consultants Ltd.

2. Associates                Alliance Management & Fiscal Services Ltd.

3. Key Management personnel  L. N. Kaul - Managing Director
                             J. Mukherjee - Chief Financial Officer 
                             S. S. Majumdar - Company
                             Secretary

2.10 Other receivable Rs. 7.23 Lacs - Key Management Personnel.

F. The plan assets created against the Gratuity and Leave Encashment liability of the company wholly comprised of the rights under insurance policies taken from the LICI.

G. Super Annuation Fund - The entitlement of pension accrues to the eligible employee after completion of 15 years of service beyond a specific grade at normal retirement age. As total service period as on 31.03.2014 is less than 15 years for the concerned employees of the company there is no eligibility for pension as on date.Upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to the super annuation fund amounting to Rs.1.36 Lacs (P.Y. Rs.1.30 Lacs) was made as per the service rules of the company for the eligible employees and was debited to 'Expenses on Employees'.

H. In respect of Provident funds for eligible employees maintained by a trust, in the nature of defined benefit plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However contribution to those provident funds amounting to Rs.0.95 Lacs during the year (P.Y. Rs. 0.98 Lacs) is recognised as expenses and included in 'Employee Benefit Expenses'. Shortfall of Rs. 0.03 (P.Y. Rs. 0.25 ) in contribution to such provident funds has been provided to the extent of the information available with the company.

2.11 Reserve Bank of India vide Notification No. DNBS.167/CGN (OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append to its balance sheet prescribed under the Companies Act 1956, the particulars in the format as set out in the schedule annexed, which has been complied with.

2.12 A fire broke out at the Registered office of the company at Nicco House on 27th March, 2009 affecting the operations of the company apart from causing damage to Building, Furniture & Fixture, Computer system, certain records for earlier years. General Diary for fire was lodged by the company and insurance claims was received in earlier years in full and final settlement to the satisfaction of the company which was utilised for repair, renovation and rehabilitation work in the office premises.

2.13 The areas have been identified where there is a scope of improvement for internal control system and steps have been taken for the said improvement.

2.14 Land & Building (in excess of its own use) & shares (unquoted shares other than of subsidiary companies or company in the same group) amounting to Rs. 292.85 lacs & 6.80 lacs respectively held by the company in contravention of Para 19 of Non Banking Financial ( Deposit accepting or holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007 in regards to Restriction on investment in land and building and unquoted shares.

However most of such assets are charged with Bank and Financial Institutions and cannot be liquidated to bring the same within limits of prudential norms as mentioned above.

2.15 A writ petition has been filed by the company before Hon'ble Calcutta High Court against the decision of the MINISTRY OF CORPORATE AFFAIRS inrespect of extension of period of appointment of Mr. L. N. Kaul, Managing Director. Pending further development, as a matter of abundant precaution, the amount paid to him between 15.04.13 and 31.03.14 against his emoluments has been shown under other receivables.

2.16 The previous year figures have been regrouped / restated wherever considered necessary.