Provisions are recognized when the Company, as a result of a past event, has a present obligation and it is probable that
the Company will be required to settle the obligation for which a reliable estimate can be made.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision
is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of
those cash flows (when the effect of the time value of money is material). When discounting is used, the increase in the
provision due to the passage of time is recognized as a finance cost.
a) there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Company (or)
b) there is a present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the amount cannot be made.
2.21 Earnings Per Share
The basic earnings per share have been computed by dividing the net income attributable to equity shareholders by
weighted average number of shares outstanding during the year.
The diluted earnings per share have been computed using weighted average number of shares adjusted for effects of all
potentially dilutive equity shares.
3. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of financial statements in accordance with Ind AS requires the use of estimates and assumptions for
some items, which might have an effect on their recognition and measurement in the balance sheet and statement of
profit and loss. The estimates and associated assumptions are based on historical experience and other factors that
are relevant. The actual results may differ from these estimates. The Company’s management believes that the estimates
used in preparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is
recognized prospectively in the current and future periods.
Useful lives of Property Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortized over their estimated useful lives, after
taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the
assets annually in order to determine the amount of depreciation / amortization to be recorded during any reporting
period. The useful lives and residual values are based on the Company’s historical experience with similar assets and
take into account anticipated technological changes. The depreciation/ amortization for future periods is revised if there
are significant changes from previous estimates.
Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss
rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation,
based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each
reporting period.
(1) During the year ending 31st March 2025, the company acquired 62.50% stake in M/s. Forge 2000 Private Limited pursuant
to which, the Company has obtained control over M/s. Forge 2000 Private Limited with effect from February 21st, 2025
("acquisition date"). Subsequently the Company acquired the remaining 37.50% stake in M/s. Forge 2000 Private Limited on
17th March, 2025 pursuant to which M/s. Forge 2000 Private Limited had become a wholly owned subsidiary of the Company.
(2) Face value in Omani Riyal
(3) Formerly known as Sundaram Clayton Limited
(4) Formerly known as Sundaram Clayton DCD Private Limited
(5) Investment is made for the specific purpose of reinvesting in Nivabupa Health Insurance Company Limited as per the agreement
entered into with Fettle Tone LLP
(6) During the year ended 31st March 2024, the company subscribed to Rights issue,issued for the purpose of infusing capital to
support its growth, working capital requirement and also investing in Mind Srl, Italy.
* Consequent to the change in rates of capital gains tax and withdrawal of indexation benefit in the Finance Act 2024 enacted in
August 2024, the deferred tax assets and liabilities have been remeasured in respect of investments at fair value in the Profit and
loss account and Other Comprehensive Income (OCl). Accordingly, a reduction of ' 0.24 crore in deferred tax liability has been
recognised In the Profit and loss account and a reduction of '341.76 crores in deferred tax liability has been recognized in OCI
for the year ended 31st March, 2025.
# Transferred from Deferred Tax Liability to income tax provision on account of Sale of Equity instruments measured at FVTOCI.
The primary objective of the Company’s Capital Management is to maximise shareholders value.The Company manages its capital to
ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the
debt and equity balance. The Company’s policy is to maintain a strong capital base so as to maintain investors, creditors and market
confidence to sustain future development of the business.For the purpose of the Company's capital management, capital includes
issued capital and other equity reserves.
Note 26 : Financial instruments - Fair values and risk management
A. Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy.
Fair Value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable
or unobservable and consists of the following three levels:
Level 1 hierarchy - Includes Financial Instruments measured using quoted prices in the active market.
Level 2 hierarchy - The Fair value of Financial Instruments that are not traded in an active market, is determined using valuation
techniques which maximize the use of observable market data.
Level 3 hierarchy - Inputs are not based on observable market data. Fair values are determined in whole or in part using
a valuation model based on assumptions that are neither supported by prices from observable current
market transactions in the same instrument nor are they based on available market data. An adjustment to
a Level 2 input that is significant to the entire measurement results in a fair value measurement categorised
within Level 3 of the fair value hierarchy if the adjustment uses significant unobservable inputs.
B. Measurement of fair values
Financial instruments fair valued under Level 3 hierarchy are measured using Market multiples method.
The carrying amount of trade receivables, cash and cash equivalents , trade payables and other financial liabilities are considered
to be the fair value due to short term nature.
# Investment in Fettle Tone LLP is made for the specific purpose of reinvesting in Nivabupa Health Insurance Company Limited as
per the agreement entered into with Fettle Tone LLP. Since Nivabupa Health Insurance Company Limited was listed on National
Stock Exchange and Bombay Stock Exchange with effect from 14th November 2024, the fair valuation of Fettletone LLP had
been done based on the moving average (from the date of listing till 31st March 2025), of the closing price of Nivabupa Health
Insurance Company Limited in National Stock Exchange, by applying our proportionate share in Fettle Tone LLP. Hence the
level of valuation of Fettle Tone LLP in Fair Value Hierarchy had been transferred from Level 3 to Level 2 for the year ended
31st March 2025.
The Company has exposure to the following risks arising from financial instruments:
• Liquidity risk ;
• Credit risk ; and
• Market risk
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems
are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its
training and management standards and procedures, aims to maintain a disciplined and constructive control environment
in which all employees understand their roles and obligations.
(a) Liquidity 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. The Company’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
The Company regularly monitors the rolling forecasts and the actual cash flows to service the financial liabilities on a
day-to-day basis through cash generation from business and by having adequate banking facilities.
The following table shows the maturity analysis of the Company’s financial liabilities based on contractually agreed
undiscounted cash flows along with its carrying value as at the Balance sheet date.
(b) 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 Company's receivables from customers and loans and advances.
(i) Trade receivables:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer and
the geography in which it operates. Concentration of credit risk with respect to trade receivables are limited as the
customers are reviewed, assessed and monitored regularly on a monthly basis with pre-determined credit limits
assessed based on their payment capacity. Our historical experience of collecting receivables demonstrates that credit
risk is low.
The following table sets out the information about the credit quality of financial assets measured at amortised cost.
(ii) Other financial assets:
The Company’s maximum exposure to credit risk as at 31st March, 2025 is the carrying value of each class of financial
assets as on that date.
(c) Market Risk
Market risk is the risk that the fair value of a financial instrument will fluctuate because of changes in market prices in case
of equity investments and Net Asset Value (NAV) in case of mutual fund investments.The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
Company is having certain investments in unlisted companies where the valuation takes place based on certain market
multiples of similar companies after duly adjusted for discounts to the same if any.
Risk Management Structure
Risk is an inherent and integral part of the business of investments and business process outsourcing. The Company aims
to achieve an appropriate balance between risk and returns by establishing an efficient risk mitigation system. In order
to mitigate risks, the Company has instituted a risk management framework, wherein, the Audit Committee under the
supervision of the Board is tasked with regular assessment and laying down of policies for management of risks.In respect
of certain investments, the Company has established systems to conduct due diligence of proposals received and to ensure
that investments are in line with the overall objectives of the Company.
Note 28: Revenue Recognition
Sale of Services:
The Company derives revenue from providing support services to our captive clients, which primarily include providing back
office administration, data management, contact centre management and training. The Company recognizes revenue when the
significant terms of the arrangement are enforceable, services are being delivered and the collectability is reasonably assured.
The Company recognizes revenue on an accrual basis when services are performed.
When the terms of the agreement specify service level parameters that must be met, the Company monitors such service level
parameters and determine if there are any service credits or penalties that needs to be accounted for. The Company's revenue
is significantly only from group companies, hence it is believed that there is no significant credit risk.
The Company invoices its clients depending on the terms of the arrangement, which include billing based on a per employee
basis, a per transaction basis, a fixed price basis, an outcome-based basis or other pricing arrangements including cost-plus
arrangements.
The Company's revenue is exclusive of taxes and includes reimbursements of communication costs, incentives, etc as defined
in the terms of agreement.
Contracts with customers
There are no other revenue under Contract with Customers other than those which are accounted in Profit and Loss Account
as revenue which comprises of Service income and Learning income. Refer Note 28.a for the details of income earned from
contracts with customers.
Contract Balances
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue.
Refer Note 28.a for the Trade Receivable balances.
Revenue from sale of services and the trade receivable for the year ended March 31, 2025 and March 31, 2024 is as follows:
Note 28.a
(iv) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed
below:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets
underperform this yield, this will create a deficit. Most of the plan asset investments is in fixed income securities with high
grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with
derivatives to minimise risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative
investments which have low correlation with equity securities. The equity securities are expected to earn a return in excess
of the discount rate and contribute to the plan deficit. The Company has a risk management strategy where the aggregate
amount of risk exposure on a portfolio level is maintained at a fixed range. Any deviations from the range are corrected by
rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.
Changes in bond yield: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an
yields increase in the value of the plans’ bond holdings.
Inflation risks: In the pension plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The pension plan obligations are to provide benefits for the life of the member, so increases in life
expectancy will result in an increase in the plan liabilities. This is particularly significant where inflationary increases result
in higher sensitivity to changes in life expectancy.
There have been no transactions involving ordinary shares or potential ordinary shares between reporting date and date of
completing financial statements which would require restatement of EPS.
31b : Dividend
The Board of Directors has recommended a final dividend of '1.55/- per share (31%). In addition, the Board of Directors has
declared a second interim Dividend of '0.60/- per share (12%), which, together with the interim Dividend of '3.70 per share
(74%) paid during the year will make a total Dividend of '5.85/- per share (117%) for the FY 2024-25.
31c : Contingent liabilities and commitments
Estimated amount of investment to be made in JM Financial yield enhancer (Distressed Opportunity ) Fund I - Series I for
Capital Commitment - 31.39 Lakhs.
31g: Other Regulatory Disclosures as required under Schedule III of Companies Act, 2013
(a) All the title deeds of immovable properties are held in the name of the company
(b) The Company has not granted any loans or advances in nature of loans to promotors, directors, KMPs and the related
parties (as defined under the Companies Act, 2013) either severally or jointly with any other persons.
(c) The Company does not have any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)
and rules made thereunder.
(d) The Company does not have any borrowings from banks or financial institutions on the basis of security of current assets.
(e) The Company is not declared as a wilful defaulter by any bank or financial Institution or other lender.
(f) The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.
(g) The company does not have any charges or satisfaction to be registered with ROC beyond stipulated statutory period.
(h) There are no schemes of arrangement approved by the Competent Authority in terms of sections 230 to 237 of the Companies
Act, 2013 approved.
NOTES TO THE STANDALONE FINANCIAL STATEMENTS (Contd.)
(i) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (""intermediaries"")
with the understanding (whether recorded in writing or otherwise) that intermediary shall directly or indirectly lend or
invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) except as disclosed.
The Company has not received any fund from any party(ies) or entity(ies) including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or
invest in other persons or entities identified by or on behalf of the Company (""Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(j) There are no transactions in the nature of undisclosed income or income surrendered which needs to be accounted in
the books of accounts during the year in the tax assessments under the Income Tax Act, 1961.
(k) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
31h: Gain on derecognition of financial instrument
During the year
a. The Company received '1,995.08 lakhs on account of sale of Non convertible debentures of Tata International Limited,
the profit on which was '2.29 lakhs.
b. The Company received '17.57 lakhs on account of redemption of Non convertible redeemable preference shares of
Sundaram Clayton Limited, which was earlier classified in OCI as Items that will be reclassified to P&L.
31i: Adoption of Financial Statements
The Board has adopted the financial statements at its meeting held on 22nd May 2025.
As per our report of even date attached. For and on behalf of the Board of Directors of
For R.G.N. Price & Co. Sundaram Finance Holdings Limited
Chartered Accountants
FR No: 002785S Harsha Viji R. Venkatraman
Vinay M Kothari Chairman Director
Partner
M.No : 234371
Date : 22-05-2025 S.Ravi C. Senthilnathan S Kalyanaraman
Place : Chennai Chief Executive Officer Chief Financial Officer Secretary & Compliance Officer
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