ICDS X - Provisions, Contingent Liabilities and Contingent Assets
Provisions involving a substantial degree of estimation in measurement are recognized when there is a present
obligation as a result of past events and it is reasonably certain that there will be an outflow of resources. A provision
is not discounted to its present value and is determined based on the last estimate required to settle an obligation at the
year end. These are reviewed every year end and adjusted to reflect the best current estimates. Contingent Liabilities
are not recognized.
1.13 RISK MANAGEMENT FRAMEWORK
A wide range of risks may affect the company’s business and operational or financial performance. The risks that
could have significant influence on the company are credit Risk, Liquidity & Funding Risk, Market Risk and
Operational Risk. The management has a process to identify and analyze the risks faced by the company, to set
appropriate risk limits and to control and to monitor risks and adherence to these limits. The risk management
framework aims to:
I create a stable business planning environment by reducing the impact of interest rate fluctuations on the company’s
business plan.
II achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.
A) CREDIT RISK
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the trade and other receivables, cash and cash equivalents
and other bank balances.
It is measured as the amount at risk due to repayment default by customers or counterparties to the company. Various
metrics such as instalment default rate, overdue position, instalment moratorium, restructuring, one-time resolution
plan, debt management efficiency, credit bureau information etc. are used as leading indicators to assess credit risk.
It is monitored using level of credit exposures, portfolio monitoring, and contribution of repeat customers, bureau
data, and concentration risk of geography, customer and portfolio; and assessment of any major change in the business
environment including economic, political as well as natural calamity/pandemic.
It is managed by a robust control framework by the risk and debt management unit. This is achieved by continuously
aligning credit and debt management policies and resourcing, obtaining external data from credit bureaus and reviews
of portfolios and delinquencies by senior and middle management team comprising of risk, analytics, debt
management and risk containment along with business.
(a) Loans, Trade & Other Receivables
Credit risk from loans, trade & other receivables is managed by establishing credit limits, credit approvals and
monitoring creditworthiness of the customers. Outstanding customer receivables are regularly monitored. The
ageing of loans & trade receivables is as follows:
(b) Cash & Cash Equivalents & Other Bank Balances
The Company holds cash and cash equivalents and other bank balances of Rs.42.19 Lakhs at 31st March 2024.
The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing
basis and is considered to be good.
B) LIQUIDITY & FUNDING RISK
Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset.
Funding risk arises from:
• Inability to raise incremental borrowings and deposits to fund business requirement or repayment
obligations
• When long term assets cannot be funded at the expected term resulting in cash flow mismatches
• Amidst volatile market conditions impacting sourcing of funds from banks and money markets
It is measured by:
• Identification of gaps in the structural and dynamic liquidity statements.
• Assessment of incremental borrowings required for meeting the repayment obligation, the company’s
business plan and prevailing market conditions.
• Liquidity coverage ratio (LCR) in accordance with guidelines.
The Company does not have any kind of Liquidity and Funding Risk as on 31.03.2024.
C) MARKET RISK
Market risk is the risk of loss of future earnings, fair values of future cash flows that may result from adverse changes
in market rates and prices or in the price of market risk-sensitive instruments a a result of such adverse changes in
market rates & prices. Market risk comprises Currency Risk, Interest Risk & Price Risk.
It is measured using changes in equity prices, and sensitivities like Value at Risk (‘VAR’) basis point value (PV01),
modified duration analysis and other measures to determine movements in our portfolios and impact on our income,
including the sensitivity of net interest income. Market risks for the company encompass exposures to equity
investments, Interest rate risks on investment portfolios as well as the floating rate assets and liabilities with differing
maturities.
It is monitored by assessments of fluctuation in the equity price, interest rate sensitivities under simulated stress test
scenarios given range of probable interest rate movements on both fixed and floating assets and liabilities.
It is managed by the company’s treasury team under the guidance of Board.
(a) Currency Risk
The Company’s operations are only in India which results in no foreign currency risk exposure.
(b) Interest Risk
Interest rate risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because
of changes in market interest rates. The Company is exposed to interest rate risk through the impact of rate changes
on interest-bearing liabilities and assets. The company manages its interest rate risk by monitoring the movements
in the market interest rates closely.
(c) Price Risk
The company is exposed to equity price risk arising from investments held by the company. To manage its price
risk arising from investment in equity securities, the company diversifies its portfolio. Diversification of the
portfolio is done in accordance with the limits set by the company. However, the company has very little
investment in equity market.
D) OPERATIONAL RISK
Operational risk is the risk arising from inadequate or failed internal processes, people or systems, or from external
events. The company manages operational risks through comprehensive internal control systems and procedures laid
down around various key activities in the company viz. loan acquisition, customer services, IT operations, fiance
function etc. Internal Audit also conducts a detailed review of all functions at least once a year, this helps to identify
process gaps on timely basis. Further IT and Operations have a dedicated compliance and control units within the
function who on continuous basis review internal processes. This enables the management to evaluate key areas of
operational risks and the process to adequately mitigate them on an ongoing basis.
The Company has put in place a robust disaster recovery (DR) plan and business continuity plan (BCP) to ensure
continuity of operations including services to customers, if any eventuality is to happen such as natural disasters,
technological outage etc. Robust periodic testing is carried, and results are analyzed to address gaps in the framework,
if any.
1.14 Confirming of various debit and credit balances, loans and advances given and other liabilities etc. have not been
received in some cases, which may have a revenue impact.
1.15 TAXATION
Income tax expenses represents the sum of the current tax and deferred tax.
Current Tax:
The tax currently payable is based on taxable profit under the Income Tax Act for the year. The Companies current
tax is calculated using tax rates that have been enacted by the end of the reporting period.
Deferred Tax:
Deferred tax expense or benefit is recognized on timing difference between taxable income and accounting income
that originates in one period and are capable of reversal in one or more subsequent periods.
1.16 DIVIDENTS
The final dividend on shares is recorded as a liability on the date of approval by shareholders and interim dividend are
recorded as liability on the date of declaration by the Company’s Board of directors.
However, during the financial year, the company has not declare any dividend.
1.17 EARNIG PER SHARE
Basic earnings per share is computed by dividing the Profit/ (loss) after tax (including the post - tax effect of
extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted
earnings per share is computed by dividing the profit/ (loss) after tax (including the post - tax effect of extraordinary
items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share since
the company have not issued any securities which can be potential equity shares.
Company has not convertible securities which can be converted to stock, hence working for basic EPS and diluted
EPS are same.
1.22 OTHER STATUTORY INFORMATION
(i) Company does not have any benami property, where any proceeding has been initiated or pending against
the company for holding any benami property.
(ii) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.
(iii) The company has not advanced or loaned funds to any person or entities, including foreign entities
(Intermediaries) with the understanding that the intermediary shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries other than in the
ordinary course of the business.
(iv) The Company has not received any funds from any person or entities, including foreign entities other than
those disclosed above with the understanding that the company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(v) The company does not have any transactions which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(vi) The company has no transactions with stuck off companies during the year.
(vii) Term loans were applied for the purpose they were obtained. Further, short term loans availed have not been
utilized for long term purposes by the company.
(viii) The Company has not been declared as wilful defaulters by any bank or financial institutions of government
of any government authority.
1.23 Figures have been rounded to nearest Lacs Rupee.
Ashok Mittal Anil Kumar Agarwal Rakesh Kumar Mittal
Chairman Whole Time Director Director
Place: Agra Kusum Singhal Deepa Poptani Ayesha Jain Mahajan
Date: 29th May, 2024 Director CFO Company Secretary
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