INVESTMENT POLICY

Investment Policy of The Company approved by the Board Directors in their 112th Meeting held on 10th August 2018

Meaning of Investment:

1. Whenever the Company has excess fund above the current requirement either as working Capital or for Capital Expenditure, the Company park such amount in prudent financial portfolios with the intention of generating income either in the form of revenue or capital gain and also to make available such amount instantaneously whenever any need arises.

2. The Company always intend to invest the surplus fund which has no immediate need for its business purpose.

3. The Investments, the Company does will be of two types.
a. Current Investment: Those investments which the Company can liquidate instantaneously with the intention of making available such fund for the immediate use is called current investment. eg. Investment in capital market, in Mutual Funds, Govt. Securities etc.
b. Long Term Investments: Those investments made by the Company not with the intention of liquidating the same immediately or it has some initial stipulated locking period which will not allow the Company to liquidate the investment within the locking period. Investments in subsidiaries, investment in securities, investment in unquoted debentures depending upon the tenure of such dentures for the purpose of Income Recognition and asset classification, investment in immovable properties etc.

4. The Company shall classify every investment either as ‘current’ or ‘Long Term’ at the time of investment itself.

5. The classification of investments once made by the Company will not be altered. However if any change in classification has become very much needed it shall be effected only at the beginning of each half year either on 1st of April or1st of October with the approval of the Board. Further the investments shall be transferred scrip-wise from ‘current’ to ‘long term ‘or vice versa at book value or market value whichever is lower.

6. Income from dividend on shares of corporate Bodies and units of Mutual Funds shall be taken into account on cash basis. However it is provided that the income from dividend on shares of Corporate Bodies shall be taken into account on accrual basis when such dividend has been declared by the corporate body in its annual general meeting and the applicable NBFCs right to receive payment is established. Income from Bonds and debentures of Corporate Bodies and from Govt. Securities /bonds shall be taken into account on accrual basis.

7. The depreciation/diminution in value of the investment which is long term (more than a year) and substantial if any, in each strip shall be fully provided for and appreciation if any shall be ignored.

8. The Depreciation/ diminution in one scrip shall not be set off against appreciation in another scrip at the time of such inter class transfer even in respect of the scrip of the same category.

9. Quoted current investments shall, for the purposes of valuation, be grouped into the following categories, viz.
a. Equity shares
b. Preference shares
c. Debentures and bonds
d. Govt. Securities including treasury bills
e. Units of Mutual Funds and
f. others

10. Quoted Current Investments for each category shall be valued at cost or market value whichever is lower. For this purpose the investment in each category shall be considered scrip wise and the cost and market value aggregated for all investments in each category. If the aggregate market value for the category is less than the aggregate cost for that category , the net depreciation shall be provided for or charged to the Profit and Loss Account . If the aggregate market value for category exceeds the aggregate cost for the category, the net appreciation shall be ignored. Depreciation in one category of investments shall not be set off against appreciation in another category

11. Unquoted equity shares in the nature of current investments shall be valued at cost or break up value whichever is lower. If the Board feels fit it can substitute fair value for the break up value of the shares. If the Balance Sheet of the investee Company is not available for two years continuously such shares shall be valued at one rupee only.

12. Unquoted preference shares in the nature of current investment shall be valued at cost or face value whichever is lower.

13. Investments in unquoted Govt. Securities or Govt. guaranteed bonds shall be valued at carrying cost.

14. Unquoted investments in the units of mutual funds in the nature of current investments shall be valued at the net asset value declared by the mutual fund in respect of each particular scheme.

15. Investments in commercial paper shall be valued at carrying cost.

16. A long term investment shall be valued in accordance with the Accounting Standard issued by ICAI.

17. Since the Company feels that the fund available with the Company is not adequate enough for its business purpose, no investment is contemplated by the Company in the immediate future. However the Company will continue to invest minimum amount in allowable portfolios for maintaining its SLR with respect to the quantum of Public Deposit acceptance as per the Directions of Reserve Bank of India.

18. The Company shall hold all investments in its name and there will not be any investment other than the above at any point of time.

19. Of the aggregate investment required to meet the SLR purpose not less than two third will be always in Govt. Securities ( both central and state) and the remaining will be in ‘non lien’ Fixed Deposits maintained at any Scheduled Bank chosen by the Company.

20. The Govt. Securities shall be maintained in ‘D’ mat Format and the fixed Deposit Certificates shall be at the safe custody of any designated bank with intimation to the Reserve Bank of India’


For Sreeragh General Finance Ltd.
Mg Director
R Badrinarayanan