l. Provisions and contingent liabilities
Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable that
the Company will be required to settle the
obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account 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 some or all of economic benefits
required to settle a provision are expected to
be recovered from a third party, a receivable is
recognised as on asset if it is virtually certain that
reimbursements will be received and amount of
the receivable can be measured reliably.
A disclosure for a contingent liability is made
when there is a possible obligation or a present
obligation that may, but probably will not,
require an outflow of resources. When there is a
possible obligation or a present obligation that
the likelihood of outflow of resources is remote,
no provision or disclosure is made.
m. Leases
Where the Company is the lessee
Leases where the lessor effectively retains
substantially all the risks and benefits of
ownership of the leased asset are classified as
operating leases. Operating lease payments are
recognisised as an expense in the Statement of
profit and loss.
Where the Company is the lessor
Lease income is recognised in the Statement of
profit and loss as per contractual rental unless
another systematic basis is more representative
of the time pattern in which the benefit derived
from the leased asset is diminished.
n. Cash and cash equivalents
Cash and cash equivalents in the balance sheet
comprise cash on hand, cheques and drafts on
hand, balance with banks in current accounts
and short-term deposits with an original maturity
of three months or less, which are subject to an
insignificant risk of change in value.
o. Earning Per Share
Basic earnings per share is computed and
disclosed using the weighted average number
of equity shares outstanding during the period.
Dilutive earnings per share is computed and
disclosed using the weighted average number
of equity and dilutive equity equivalent shares
outstanding during the period, except when the
results would be anti-dilutive.
p. Exceptional items
In certain occasions, the size, type, or incidences
of the item of income or expenses pertaining to
the ordinary activities of the Company is such
that its disclosure improves the understanding of
the performance of the Company, Such income
or expenses are classified as an exceptional
item and accordingly, disclosed in the financial
statements.
q. Significant accounting judgements, estimates
and assumptions
In the application of the Company's accounting
policies, which are described as stated above,
the Directors of the Company are required to
make judgements, estimates and assumptions
about the carrying amounts of assets and
liabilities that are not readily apparent from
other sources. The estimates and associated
assumptions are based on historical experience
and other factors that are considered to be
relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the
period in which the estimate is revised if the
revision affects only the period of the revision
and future periods if the revision affects both
current and future periods.
Key sources of uncertainty
In the application of the Company accounting
policies, the management of the Company
is required to make judgements, estimates
and assumptions about the carrying amounts
of assets and liabilities that are not readily
apparent from other sources. The estimates
and associated assumptions are based on
historical experience and other factors that are
considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the
period in which the estimate is revised if the
revision affects only that period or in the period
of the revision and future periods if the revision
affects both current and future periods.
The following are the areas of estimation
uncertainty and critical judgements that the
management has made in the process of
applying the Company's accounting policies
and that have the most significant effect
on the amounts recognised in the financial
statements:
a. Useful lives of depreciable tangible assets
Management reviews the useful lives of
depreciable/amortisable assets at each
reporting date.
b. Fair Value measurements and valuation
processes
Some of the Company's assets and liabilities
are measured at fair value for financial
reporting purposes.
Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date. The
fair value measurement is based on the
presumption that the transaction to sell
the asset or transfer the liability takes place
either:
i) In the principal market for the asset or
liability, or
ii) In the absence of a principal market, in
the most advantageous market for the
asset or liability.
The principal or the most advantageous
market must be accessible by the Company.
The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when pricing
the asset or liability, assuming that market
participants act in their economic best
interest.
A fair value measurement of a non¬
financial asset takes into account a market
participant's ability to generate economic
benefits by using the asset in its highest and
best use or by selling it to another market
participant that would use the asset in its
highest and best use.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are available
to measure fair value, maximising the use of
relevant observable inputs and minimising
the use of unobservable inputs.
In order to show how fair values have
been derived, financial instruments are
classified based on a hierarchy of valuation
techniques, as summarised below:
Level 1 financial instruments - Those
financial instruments where the inputs used
in the valuation are unadjusted quoted
prices from active markets for identical
assets or liabilities that the Company has
access to at the measurement date. The
Company considers markets as active only
if there are sufficient trading activities with
regards to the volume and liquidity of the
identical assets or liabilities and when there
are binding and exercisable price quotes
available on the balance sheet date.
Level 2 financial instruments - Those
financial instruments where the inputs that
are used for valuation and are significant,
are derived from directly or indirectly
observable market data available over the
entire period of the instrument's life. Such
inputs include quoted prices for similar
assets or liabilities in active markets, quoted
prices for identical instruments in inactive
markets and observable inputs other than
quoted prices such as interest rates and
yield curves, implied volatilities, and credit
spreads. In addition, adjustments may be
required for the condition or location of
the asset or the extent to which it relates to
items that are comparable to the valued
instrument. However, if such adjustments
are based on unobservable inputs which
are significant to the entire measurement,
the Company will classify the instruments
as Level 3.
Level 3 financial instruments - Those
financial instruments that include one or
more unobservable input that is significant
to the measurement as whole.
The Company recognises transfers between
levels of the fair value hierarchy at the end
of the reporting period during which the
change has occurred. No such instances
of transfers between levels of the fair
value hierarchy were recorded during the
reporting period.
c. Contingent Liability
In ordinary course of business, the
Company faces claims by various parties.
The Company annually assesses such
claims and monitors the legal environment
on an ongoing basis, with the assistance of
external legal counsel, wherever necessary.
The Company records a liability for any
claims where a potential loss probable and
capable of being estimated and discloses
such matters in its financial statements,
if material. For potential losses that are
considered possible, but not probable,
the Company provides disclosures in the
financial statements but does not record a
liability in its financial statements unless the
loss becomes probable.
d. Impairment testing
Judgment is also required in evaluating
the likelihood of collection of customer
debt after revenue has been recognised.
This evaluation requires estimates to be
made, including the level of provision to be
made for amounts with uncertain recovery
profiles. Provisions are based on historical
trends in the percentage of debts which
are not recovered or on more detailed
reviews of individually significant balances.
Determining whether the carrying amount
of these assets has any indication of
impairment also requires judgment. If an
indication of impairment is identified, further
judgment is required to assess whether
the carrying amount can be supported by
the net present value of future cash flows
forecast to be derived from the asset. This
forecast involves cash flow projections and
selecting the appropriate discount rate.
Impairment of non-financial assets,
wherever applicable
The Company assesses at each balance
sheet date whether there is any indication
that non-financial asset may be impaired
due to events or changes in circumstances
indicating that their carrying amounts may
not be realised. If any such indication exists,
the Company estimates the recoverable
amount of the asset. If such recoverable
amount of the asset is less than its carrying
amount, the carrying amount is reduced
to its recoverable amount. The reduction
is treated as an impairment loss and is
recognised in the statement of profit and
loss. If at the balance sheet date there is
an indication that a previously assessed
impairment loss no longer exists, the
recoverable amount is reassessed and the
asset is reflected at the revised recoverable
amount, subject to maximum of the
depreciated historical cost.
e. Tax
The Company's tax charge is the sum of
the total current and deferred tax charges.
The calculation of the Company's total
tax charge necessarily involves a degree
of estimation and judgment in respect of
certain items whose tax treatment cannot
be finally determined until resolution has
been reached with the relevant tax authority
or, as appropriate, through a formal legal
process.
Accruals for tax contingencies require
management to make judgments and
estimates in relation to tax related issues
and exposures.
The recognition of deferred tax assets is
based upon whether it is more likely than
not that sufficient and suitable taxable
profits will be available in the future against
which the reversal of temporary differences
can be deducted. Where the temporary
differences are related to losses, the
availability of the losses to offset against
forecast taxable profits is also considered.
Recognition therefore involves judgment
regarding the future financial performance
of the particular legal entity or tax Company
in which the deferred tax asset has been
recognised.
(f) Split of Shares
The Board of Directors of the Company at their meeting held on 7th August, 2024 had considered and
approved sub-division/Split of each equity share having a face value of ' 5/- fully paid up into five equity
shares of the face value of ' l/- each and the same has been approved by the shareholders of the
Company at the Annual General Meeting held on 30th September, 2024. Further, the Board of Directors of the
Company at their meeting held on 10th October, 2024 has intimated the Record date i.e. 30th October, 2024
from which equity shares of face value ' 5/- (Rupees Five only) each of the Company existing on the record
date shall stand sub-divided into five equity shares of face value ' 1/- (Rupees one only) each fully paid.
As a result of sub-division/Split, 2,24,53,200 equity shares of ' 5/- each have been sub-divided/split into
11,22,66,000 equity shares of Re. 1/- each.
(g) Conversion of Warrants
The Board of Directors of the Company at their meeting held on 26th June, 2024 has considered and
approved the allotment of 3,12,500 Equity Shares of face value of ' 5/-. Further, the Board of Directors of
the Company at their meeting held on 20th August, 2024 has considered and approved the allotment of
3,87,500 Equity Shares of face value of ' 5/-.
The management assessed that cash and cash equivalents and bank balances, loans and advances, other
financial assets, certain investments, trade payables and other current liabilities approximate their fair value
largely due to the short-term maturities of these instruments. Difference between carrying amount and fair
value of bank deposits, other financial assets, other financial liabilities and borrowings subsequently measured
at amortised cost is not significant in each of the year presented.
39.2 Fair value hierarchy
The fair value of financial instruments have been classified into three categories depending on the inputs
used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets
for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3
measurements)
Level 1:
Quoted prices in an active market: This level of hierarchy includes financial instruments that are measured by
reference to quoted prices (unadjusted) in active markets for identical instruments.
Level 2:
Valuation techniques with observable inputs: This level of hierarchy includes financial assets and liabilities,
measured using inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3:
Valuation techniques with unobservable inputs: This level of hierarchy includes instruments measured using
inputs that are not based on observable market data (unobservable inputs). Fair value is 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 instruments nor based on available market data.
The following table provides an analysis of financial instruments that are measured at fair value and have been
grouped into Level 1, Level 2 and Level 3 below:
The following methods and assumptions were used to estimate the fair values:
Quoted equity investments: Fair value is derived from quoted market prices in active markets.
Unquoted equity investments: Fair value is derived on the basis of net asset value approach, in this approach
the net asset value is used to capture the fair value of these investments.
Quoted mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net
asset value (nav) for mutual fund declared by mutual fund house.
Unquoted debentures/other funds: Fair value is determined by reference to quotes from fund houses/portfolio
management services companies/on market basis.
39.3 Financial Risk Management
This note explains the risk which company is exposed to and policies and framework adopted by the Company
to manage these risks.
The Company's activities expose it mainly to the market risk, credit risk and liquidity risk.
The monitoring and management of such risks is undertaken by the senior management of the Company. There
are appropriate policies and procedures in place through which such financial risks are identified, measured
and managed by the Company. The Audit Committee and the Board are regularly apprised of these risks and
measures used to mitigation these risks.
a. Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of adverse changes in market rates and prices such as currency risk, interest rate risk, other price risk etc.
(i) Currency Risk
Currently company does not have transaction in foreign currencies and hence the Company is not
exposed to currency risk
(ii) Interest rate risk
Since the Company does not have any significant financial assets or financial liabilities bearing floating
interest rates, any change in interest rates would not have any significant impact on the financial
statements of the Company.
(iii) Price Risk
The Company is exposed to price risk arising from investments held by the Company and classified
in the balance sheet either as at fair value through profit or loss or at fair value through other
comprehensive income. To manage its price risk arising from investments, the Company diversifies its
portfolio in equity, debt, money market and other instruments (including through funds). The Company
also has strategic asset allocation benchmarks and risk limits.
Sensitivity analysis
The paragraph below summaries the impact of increase/decrease in the prices of investments held
at the end of the year on the Company's profit and other comprehensive income for the year. The
analysis is based on the assumption that prices of investments are increased or decreased by 5% with
all other variables held constant:
(i) In respect of investments measured at fair value through other comprehensive income, other
comprehensive income for the year ended 31st March, 2025 would have been increased/
decreased by ' 226.97 million (31st March, 2024: 167.02 million) as a result of the changes in prices
of investments.
b. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its
contractual obligations.
Financial instruments that are subject to concentrations of credit risk principally consist of receivables,
cash and cash equivalents, bank deposits, investments in debentures, mutual funds & other funds and
other financial assets.
The maximum exposure to credit risk was ' 2126.02 million and ' 1761.82 million, as at 31st March, 2025 and 31st
March, 2024 respectively, being the total carrying value of loans and advances, cash and cash equivalents,
balances with bank, investments (excluding equity investments) and other financial assets.
To manage the credit risk, the credit worthiness of the receivables is evaluated on an ongoing basis and
investment is made only after considering counterparty risks based on multiple criteria including Tier I
capital, Capital Adequacy Ratio, Credit Rating, Profitability, NPA levels and deposit base of banks and financial
institutions etc. These risks are monitored regularly as per its risk management programme.
As at the end of the reporting period, all the investments have been fair valued and receivables, bank
balances and other financial assets are considered to be good.
c. Liquidity Risk
Liquidity risk refers to the risk that the Group cannot meet its financial obligations. The Group's principal
source of liquidity are cash and cash equivalents and the cash flow i.e. generated from operations. The
Group consistently generated strong cash flows from operations which together with the available cash
and cash equivalents and current investment provides adequate liquidity in short terms as well in the long
term.
The table below provides details regarding the contractual maturities of financial liabilities including
estimated interest payments as at:
NOTE 41 ADDITIONAL REGULATORY INFORMATION AS PER DIVISION III SCHEDULE III OF COMPANIES ACT, 2013
a) No funds have been advanced or loaned or invested by the Company to or in any other persons or
entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, 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 provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
b) No funds have been received by the Company from any persons or entities, including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
c) The Company does not have any long-term contracts including derivative contracts for which there are
any material foreseeable losses.
d) There were no amounts which were required to be transferred to the Investor Education and Protection
Fund by the Company.
e) No proceedings have been initiated or pending against the Company for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988).
f) The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender.
g) During the year, the Company has not entered into any transactions with companies struck off under
section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
h) There are no transactions which have not been recorded in the books of accounts and which have been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961.
i) During the current year the Company has not traded or invested in Crypto currency or Virtual Currency
NOTE 42
Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current
year's classification/disclosure.
As per our Report of even date
For Bhushan Aggarwal & Co. For and on behalf of the Board
Chartered Accountants
FRN: 005362N
Sd/- Sd/- Sd/-
Shashi Bhushan Rajinder Kumar Singhania Harjeet Singh Arora
Proprietor Director Managing Director
Membership Number 084005 DIN-00077540 DIN-00063176
Sd/- Sd/-
Place: Ludhiana Sunil Kumar Vikas Gupta
Date: 29th May, 2025 Chief Financial Officer Company Secretary
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