SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Policies.

1.1 Corporate Information

Capital Trust Limited is a public company incorporated in India under the provisions of the Companies Act, 1956. Its shares are listed on Mumbai Stock Exchange. The Company is engaged in the Business of Small Enterprise Loan.

1.2 Basis of brparation of financial statements

These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles(GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. These Financial statements have been brpared to comply in all material aspects with the accounting sandards noti?ed under Section 211(3C) of companies act 1956. Pursuant to circular no. 15/2013 dated September 13, 2013 of read with circular 08/ 2014 dated 4th April, 2014, till the standards of Accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

1.3 Use of estimates

a) The brparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period.

b) Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

c) The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the brsent value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal.

1.4 Recognition of Income & Expenditure:-

a) Small Enterprise Finance Interest income is accounted in accordance with the terms of agreements with the Borrowers on Accrual basis

b) All other incomes are accounted for on accrual basis.

1.5 Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a brsent legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.6 Debrciation

a) Debrciation is provided on SLM as per schedule II to the Companies Act 2013 on pro-rata basis with reference to the period of use.

b) Debrciation on additions to assets or on sale/discardment of assets is calculated on pro-rata basis from the date of such addition or up to the date of such sale/discardment, as the case may be.

1.7 Fixed Assets:

All Fixed Assets are stated at cost of acquisition or construction less accumulated debrciation. Subsequent expenditure, which substantially enhances the brviously assessed standard performance of the asset, is added to the carrying value.

1.8 Foreign currency transaction:

All incomes or expenditure in Foreign Currency, are recorded at the rates of exchange brvailing on the dates when the relevant transactions take place.

1.9 Retirement Benefits:

The Company has subscribed the "Group Gratuity Scheme of LIC" for purpose of discharging the gratuity liability under the payment of Gratuity Act. The provision of Gratuity is made as per brmium due/payable for the year as per calculation of brmium on Actuarial basis certified by a Certified Actuary as required by AS-15. Out of this provision of gratuity, some portion is also funded by LIC of India. Contributions to the Provident Fund and Superannuation Fund are charged to the Profit & Loss Account.

1.10 Borrowing costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset is capitalizes as part of the cost of that asset wherever applicable. Other borrowing costs are recognized as an expense in the period in which they are incurred.

1.11 Earning Per Share:

The Company reports basic and diluted Earning Per Share in accordance with Accounting Standard-20 on "Earning Per Share". Basic Earning Per Share is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted Earning Per Share is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

1.12 Impairment of Assets:

At the Balance Sheet date, the Company reviews the carrying amount of Fixed Assets to determine whether there is any indication that those assets suffered an impairment loss and provides , if any.

1.13 Taxation:

a) provision for tax is created in view of taxes paid/payable during the Financial year.

b) Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that they can be realized in future.

1.14 Investment

Trade investments are the investments made to enhance the Company's business interests. Investments are either classified as current or non current based on Management's intention at the time of purchase. Current investments are carried at the lower of cost and fair value of each investment individually. Non current investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

1.15 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2 Actual receipts of foreign currency is Rs.NIL (brvious Year Rs.NIL).

3 Foreign currency outflow on travelling and business promotion expenses are 7,13,575 /- (brvious year 1,44,41,14/-)

4 Contingent Liabilities

1) The company has entered into an agreement with MAS Financial Services Ltd for managing of their portfolio and is contingently liable to an extent of Rs. 50,88,66,484 (Interest & Principal) not accounted for in the Accounts.

2) There are 3 legal cases pending against the company with a total amount involved is Rs. 2,81,156/-.

5 Pursuant to enactment of Companies Act, 2013, the company has applied the estimated useful lives as specified in Schedule II, accordingly the unamortized carring value is being debrciated/amortized over the revised/remaining useful life of the Asset In respect of the Fixed Assets whose life has been expired as at 1st of April 2014, Rs. 1,61,659 has been adjusted net of tax from the opening balance of profit and loss account.

6 The debrciation expense in the Statement of Profit and Loss for the year is higher by Rs. 1.89 Lacs consequent to the change in the useful life of the assets.

7 The management is of the opinion that there is a virtual certainty of realizing DTA of Rs 29,57,355/- created in the books (including Rs 23,39,160/- for the brvious year )

8 Sundry debtors/ Advances as at the Balance Sheet date in view of management rebrsent bonafide sums due from debtors for services arising on or before that date and advances for value to be received in cash or in kind respectively. Some of the balances however are subject to confirmation from respective parties

9 Sundry Creditors and other payables as at the Balance Sheet date in view of management rebrsent bonafide sums payable by the company against the services / sums received, which would be paid / disbursed in due course of time. Some of the balances wich are duly reconciled but, are subject to confirmation except related parties who have confirmed the balance outstanding in their account.

10 Segment Reporting

The Company has only one business segment "Financing" as its primary segment and hence disclosure of segment-wise information is not required under Accounting Standard 17 - ''Segmental Information'' notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended).

The Company has only one Geographical Segment. The Company caters mainly to the needs of the domestic market.

11 MSME undertakings as defined under the Micro, Small and Medium Development Act 2006, to whom the Company owes a sum are Rs .NIL Previous year NIL.

12 Previous year figures have been regrouped/reclassified wherever considered necessary, to make them comparable with current year figures.

For VSH & ASSOCIATES

Chartered Accountants

Firm Registration Number 012420 N

Sd/- (VIVEK K. GUPTA)

Partner

M. No.091926

Sd/- Yogen Khosla CEO & Managing Director DIN - 00203165

Sd/- Hari Baskaran Director DIN - 02666053

Sd/- Tanya Sethi Company Secretary

Sd/- Mukesh Sehgal CFO

Place : New Delhi

Date : May 30, 2015