i. Provisions and contingencies
A provision is recognized if, as a result of a past event, the Company has a present legal or
constructive 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
discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognized as finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but will probably not, require an outflow of resources. When there is a
possible obligation of a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision disclosure is made.
j. Cash and cash equivalents
Statement of cash flows is prepared in accordance with the indirect method prescribed in the
relevant Accounting Standard. For the purpose of presentation in the Statement of cash flows,
cash and cash equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank overdrafts. However, Bank overdrafts are
shown within borrowings in current liabilities in the balance sheet for the purpose of
presentation.
k. Financial Instruments
a. Financial assets
i. Recognition and initial measurement
Trade receivables and debt instruments issued are initially recognized when they are
originated. All other financial assets are initially recognized when the Company becomes a
party to the contractual provisions of the instrument.
A financial asset is initially measured at fair value. In the case of financial assets which are
recognized at fair value through profit and loss (FVTPL), the transaction costs are recognized
in the statement of profit and loss. In other cases, the transaction costs are attributed to the
acquisition value of the financial asset.
ii. Classification
On initial recognition, a financial asset is classified as measured at
- amortised cost; or
- fair value through profit or loss (FVTPL); or
- fair value through other comprehensive income (FVOCI) - debt investment or equity
investment.
Financial assets are not reclassified subsequent to their initial recognition, except if and in the
period the Company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions
and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is
not designated as at FVTPL:
- the asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may
irrevocably elect to present subsequent changes in the investment’s fair value in OCI
(designated as FVOCI - equity investment). This election is made on an investment- by¬
investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above
are measured at FVTPL. This includes all derivative financial assets. On initial recognition,
the Company may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial assets that are held for trading or are managed and whose performance is evaluated
on a fair value basis are measured at FVTPL.
iii Subsequent measurement and gains and losses
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognized in profit or loss.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains
and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition
is recognized in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income under the effective
interest method, foreign exchange gains and losses and impairment are recognized in profit or
loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses
accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income in
profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognized in OCI and are not reclassified to profit
or loss.
iv. Derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire, or it transfers the rights to receive the contractual cash flows
in a transaction in which substantially all of the risks and rewards of ownership of the
financial asset are transferred or in which the Company neither transfers nor retains
substantially all of the risks and rewards of ownership and does not retain control of the
financial asset.
If the Company enters into transactions whereby it transfers assets recognized on its balance
sheet, but retains either all or substantially all of the risks and rewards of the transferred
assets, the transferred assets are not derecognized.
v. Impairment of financial assets
In accordance with Ind AS 109, the company applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment loss on the following financial assets and credit
risk exposure:
i. Financial assets that are debt instruments, and are measured at amortised cost e.g., loans,
debt securities, deposits, and bank balance.
ii. Trade receivables.
The application of simplified approach does not require the company to track changes in
credit risk. Rather it recognizes impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
b. Financial liabilities
i. Recognition and initial measurement
All financial liabilities are initially recognized when the Company becomes a party to the
contractual provisions of the instrument.
A financial liability is initially measured at fair value. In the case of financial liabilities which
are recognized at fair value through profit and loss (FVTPL), the transaction costs are
recognized in the statement of profit and loss. In other cases, the transaction costs are
attributed to the acquisition or issue of financial liability.
ii Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial
liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or
it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at
fair value and net gains and losses, including any interest expense, are recognized in profit or
loss. Other financial liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange gains and losses are
recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or
loss.
iii. Derecognition
The Company derecognizes a financial liability when its contractual obligations are
discharged or cancelled, or expire.
The Company also derecognizes a financial liability when its terms are modified and the cash
flows under the modified terms are substantially different. In this case, a new financial
liability based on the modified terms is recognized at fair value. The difference between the
carrying amounts of the financial liability extinguished and the new financial liability with
modified terms is recognized in profit or loss.
iv. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance
sheet when, and only when, the Company currently has a legally enforceable right to set off
the amounts and it intends either to settle them on a net basis or to realise the asset and settle
the liability simultaneously.
l. Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares are shown in equity as a deduction net of tax from the proceeds. Par value of the
equity share is recorded as share capital and the amount received in excess of the par value is
classified as share premium.
m. Dividend Distribution to equity shareho1ders
The Company recognizes a liability to make cash distributions to equity holders when the
distribution is authorized and the distribution is no longer at the discretion of the Company.
As per the corporate laws in India, a distribution is authorized when it is approved by the
shareholders. A corresponding amount is recognized directly in other equity along with any
tax thereon.
n. Foreign Currency Transactions
The Financial Statements of Company are presented in INR, which is also its functional
currency. In preparing the Financial Statements, transactions in currencies other than the
entity’s functional currency are recognized at the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are translated at the rates prevailing at that date. Non-monetary items denominated
in foreign currency are reported at the exchange rate ruling on the date of transaction.
Exchange differences on monetary items are recognized in the Statement of Profit & Loss in
the period in which they arise.
(d) Terms / rights attached to equity shares :
The Company has only one class of equity shares having a face value of Rs.10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays
dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
During the year ended on 31 st March 2024, no dividend was declared either interim or final (Previous year Rs.Nil including interim dividend of Rs.Nil).
In the event of liquidation of the Company, the equity shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held by the shareholders.
25. Segment Reporting - Disclosures under Ind AS 108 - “Operating Segment”:
The Company operates mainly in the business segment of fund based financing activity. All
other activities revolve around the main business. Further, all activities are carried out within
India. As such, there are no separate reportable segments as per the provisions of IND AS
108 on ‘Operating Segments’.
26. Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity
holders by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by
the weighted average number of Equity shares outstanding during the year plus the weighted
average number of Equity shares that would be issued on conversion of all the dilutive
potential Equity shares into Equity shares.
In accordance with IND AS - 33 Earnings per share, the computation of earnings per share is
set out below:
27. The Company believes that no impairment of assets arises during the year as required
under IND AS 36 “Impairment of Assets”
28. Contingent liabilities:
Contingent liabilities Rs. Nil (Previous year Rs. Nil).
29. Based on the intimation received by the Company, none of the suppliers have confirmed
to be registered under “The Micro, Small and Medium Enterprises Development (‘MSMED’)
Act, 2006”. Accordingly, no disclosures relating to amounts unpaid as at the year end
together with interest paid / payable are required to be furnished.
30. In the opinion of the Management, the Current Assets, Loans & Advances are realizable
in the ordinary course of business at least equal to the amount at which they are stated in the
Balance Sheet. The provision for all known liabilities is adequate and not in excess of the
amount reasonably necessary.
The company offsets tax assets and liabilities if and only if it has a legally enforceable right
to set off current tax assets and current tax liabilities and the deferred tax assets and deferred
tax liabilities related to income taxes levied by the same tax authority.
Significant management judgement is required in determining provision for income tax,
deferred income tax assets and liabilities and recoverability of deferred income tax assets.
The recoverability of deferred income tax assets is based on estimates of taxable income and
the period over which deferred income tax assets will be recovered. Any changes in future
taxable income would impact the recoverability of deferred tax assets.
33. The Company do not have any relationship and transaction with struck off companies
during the financial year 2023-24.
34. Analytical Ratios: Company is a Non Deposit taking Non Systemically Important Non
Banking Finance Company (NBFC-ND-NSI). Information is being provided herewith to the
extent available:-
35. Previous year figures are regrouped, reclassified and rearranged wherever necessary to
align with the current year figures.
The accompanying notes are an integral part of the financial statement.
In terms of our report of even date
For, Anand Jimnani & Associates For and on behalf of the board of directors
Chartered Accountants
Firm Registration No.009604C
(Danmal Porwal) (Rakesh Porwal)
Chairman cum MD Director
Anand Jimnani DIN 00581351 DIN 00495444
(Partner)
Membership No. 079015
Place: Kolkata (Jainendra Kumar Jain) (Sunny Jain)
Date: 27th May, 2024 Company Secretary Chief Financial Officer
UDIN: 24079015BKCQMN2389
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