NOTES FORMING PART OF THE FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of brparation of financial statements

The financial statements are brpared in accordance with Generally Accepted Accounting Principles ("GAAP") in India under the historical cost convention, on accrual basis. GAAP comprises mandatory Accounting Standards issued by the Companies (Accounting Standards) Amendment Rules, 2008 and the relevant provisions of the Companies Act, 2013. The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year.

b) Inventories

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any, except in case of by-products which are valued at net realisable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective brsent location and condition. Cost of raw materials, packing materials, trading and other products are determined on weighted average basis. Inventories are determined on First-in-First-Out (FIFO) basis.

c) 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 amounts 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. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revision to the accounting estimates is recognized prospectively.

d) Revenue recognition

1. Income from Operation is recognised upon transfer of significant risks and rewards of ownership to the buyer.

2. Other Income is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

3. Dividend is recognised when the shareholders' right to receive payment is established at the balance sheet date.

e) Fixed Assets Tangible Assets

Fixed assets are stated at cost, less accumulated debrciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Capital work in progress includes expenditure incurred till the assets are put into intended use.

Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation / depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

f) Debrciation

Debrciation on tangible assets is provided using the Straight Line Method over the useful lives of the assets estimated by the Management. Debrciation for the assets purchased / sold during the year is proportionately charged as brscribed in Schedule II to the Companies Act, 2013. Intangible assets are amortised over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the Company for its use.

g) Impairment of assets

The carrying amounts of assets are reviewed at each balance sheet dates and if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. If at the balance sheet date, there is an indication that a brviously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to extent of the carrying value of the asset that would have been determined (net of amortization / debrciation), had no impairment loss been recognized.

After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life.

h) Investments

Investments that are readily realizable and intended to be held for not more than one year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value determined on individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary decline in the value of the investments.

i) Taxation

Tax expense comprises of current income tax and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed debrciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. Minimum Alternative Tax (MAT) credit is recognised as an asset and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.

j) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).

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

k) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise has a brsent obligation as a result of past event it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate 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 estimates.

Possible future obligations or brsent obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, is disclosed as contingent liabilities in the notes to accounts of financial statements.

Contingent Assets are neither recognized nor disclosed in the financial statements.

l) Cash Flow Statement

Cash flow statement has been brpared under the 'Indirect Method'. Cash and cash equivalents, in the cash flow statement comprise unencumbered cash and bank balances.

2. Employee benefits

Provision for retirement benefits to employees was not provided on accrual basis, which is not in conformity with Accounting Standard-15 issued by ICAI and the amount has not been quantified because actuarial valuation report is not available. However, in the opinion of the management the amount involved is negligible and has no material impact on the Profit & Loss Account.

3. CONTINGENT LIABILITY & CAPITAL COMMITMENTS:

4. As per information available with the Company, none of the creditors has confirmed that they are registered under the Micro, Small and Medium enterprises Development Act, 2006.

5. Trade Receivable, Trade Payable, Short Term Borrowings and Short Term Loans and Advances balances are subject to confirmation and reconciliation.

6. The financial assets of the company constitute more than 50% of the total assets of the company. During the year, the company has started a new business of trading in Textile, the income from which is approximately 50% of the gross income of the company. Hence, the company fulfills the NBFC criterion brscribed in terms of section 45-IA of the RBI Act, 1934 in the current financial year (as was applicable last year) and is liable to obtain NBFC Certificate of Registration (CoR). However, in the coming future the management is confident of expanding the textile business, the income from which will be more than 50% of gross income of the company. Hence, the NBFC criterion will not be fulfilled and the company won't be liable to obtain NBFC Certificate of Registration (CoR).

7. Majority of the loans given are demand loans, therefore in some cases the terms of repayment and loan agreement are not available. In view of the management all the loans outstanding are considered good and therefore no provision has been made for bad and doubtful assets. Demand and other loans given are governed by the Board policies. Considering the close monitoring of Board no appraisal, renewal, Policies, Procedure, Committee or documents have been brscribed and executed.

8. Purchase and Sale of unquoted securities are done as per demand and supply forces of the market. Therefore the rationale for the same is not available. In view of the management all the unquoted securities in stock are considered as good and therefore no provision for diminutions has been made for Investments. Purchase and sale decisions are governed by the Board policies. Considering the close monitoring of Board no appraisal, Policies, Procedure, Committee or documents have been brscribed and executed.

9. As the intention is to hold the unquoted securities for sale in short term and in absence of flow of periodic data, absence of liquidity and market related data closing stock of unquoted shares are valued at cost.

10. Chief Financial Officer (CFO) of the company has resigned on 22nd December 2014. However, no CFO has been appointed till date signing of Balance Sheet.

11. The company does not have Internal Auditors for conduct of Internal Audit.

12. Segment Information:

The Company has identified business segments as its primary segment. Business segments are primarily "Finance & Securities" and "Textile Trading". Revenue and expenses, assets and liabilities directly attributable to segments are reported under each reportable segment.

13. The company has made investment in Kayaguru Capital Market Private Limited (Shareholding 20.88%) and Rockon Capital Market Private Limited (shareholding 27.63%). The Investment is acquired and held exclusively with a view for its subsequent disposal in the near future held as stock in Trade. Hence, as per AS 23 issued by ICAI Para no 7, these investments are excluded for brparing consolidated financial statements.

14. Previous year's figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current's classification/ brsentation.

AS PER OUR REPORT OF EVEN DATE

FOR PRAVIN CHANDAK & ASSOCIATES

Chartered Accountants

(Firm Registration No. 116627W)

Sd/- Pravin Chandak

Partner

Membership No. 049391

FOR AND ON BEHALF OF THE BOARD OF TILAK FINANCE LIMITED

Sd/- Girraj Kishor Agrawal (Director)

Sd/- Jatinkumar Agarrwal (Director)

Sd/- Shruti Shah Company Secretary

Sd/- Seema Sidhu Director

Place: Mumbai

Date: 29th May, 2015.