Cviirni tt» ry 2022-23 6 2021-24 ,C»Ut* ismlim-n u iiMniiova xk~ a iK4viiM u ho- porod ocrori du» loonwan Iron. »i>d riiuuurtn-** in.«i tin *-itityi fi <«<-*.»>! iMMnMt ol earliest prior periotfc m per paragraph 42 subject 10 paragraph 43 0/ lid « t 'Accounting Pottifcs.t'iangM li Accounting Estiirnicsar«J Errors.*! ;or -.1* said standard.the entity shall conce? mate’ll pt-or per**) wren retrapeohety new to the ertern the* r, » ir-pnKticatfe to deterrrrn* wvr tv period -sseclttc effect* er the cjnUst'w ««PCt c4 the error in the t ry set c4 ‘i-aiow

lUIrrMib npirwl lir miv iftir Pw darmny by:

.atresia ling the co*iparalve arwuits for the price pehodfs) presented In -Kch the enrer occurrcdio'

|V>< tin M ior ortu-fied twfere t»*i m-lfes: pro- prind prnMTitod.'inUtny tv openng tulmiH of •nMts.l.tblilm muI «|.lty <!» the «4r.W« prior penad pioumtrd

Ounnj the h-«n<t«l yen 2022-21 «i 2Q21-24.«*ule unowsons the prpcec.rti end pr-xessei » the jhiltrsot registered e4'K»o< the cmwv Iron, the pma^ctMn or »oC-Cvnji to ReOComtoto-r the lo-ipjrrr dstCMitod shjilcal tfinvcMUfulmof unw tnvasinMnt* rruda In tin ptsl.lhosv slum vwra iWnuUru. sad <nd Ucught to tin i!«rut ecuxail ol tin lonparr/.TV irron o' thir erter pe-.xh -ere restated rc'.rospectney.b, rcsutni fc opting balance ot 0-i.estment -Mote no. 11) and ecrrespondngly In tv coering usance cf Other Eo.ily iMote r«. »K

The compi/iy lv»s issued Secured Jrilistec Redeemable Nonconvertible Debenttres <the-Debentcres'l Airing the year aiming to incense the fund *iR<rw in trenches,and in Asmaierialiced form to the proposed Personisi be.onging to Promoter Catesofy and cr to Personal belonging to Nonpromoter category, by way of Private Placement ('Debenture issue"!.

for meeting One prospective financial needs directing towards 'ts growth and expansion, your company has raised Ks. 1.07b crcres trem 31 persons belonging to promote' and non promote* category through issuance of Seared unlisted Redeemable Non-Convertibte Debentures by way of private placement In dematerlallzed form In the las: ijuatw. The Company has allotted 10750 Secured unisled Redeemable Non-Conveitible Debentures at the rate of Rs.lCOO each.

Terms/ rights attached to equity shares

The Company has only or>e class of equity shares having a per value of Rs. 10/- pc- share. Faeh holder o' equity shares is entitled to cne vote per share. The Company declares and pays dividends in Indian rupees. Tne dividend proposed by the Board of Directors (if anyi is subject to the app'oval of the shareho.ders in the ensuing Annual General Meeting

lr the event o' liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after clstrlbutson of all preferential amounts. The distribution wi.l be m proportion to the number o' equity shares held by the shareholders. Consequent upon the approval of shareholders of the Company accorded for preferential issue through postal ballot on March 17. 2022 and In-prMc'pte approval accorded by the BSC Limited on March 23. 2022.alloted ol 2.CO.OOO (Two Lakh only) Equity Shares of face value Rs. 10/- (Rupees Ten only) each, at a price of Rs.25/- (Rupees Twenty five only) each, including a premium of Rs.15/- (Rupees Fifteen only)each to Mr Anu T Chertyanla non promoter i. Additionally in Octctier 2022 . 2 lakns equity shares were issued as a result of conversion of 2 lakh converaiale warrants of face value Rs. 10/- iRupees Ten only) each, at a price of Rs.25/- (Rupees Twenty five only) each, including a premium of Rs.15/- (Rupees Fifteen onlyieach to Share wea.th Securities Limited (a promoter).

As per the records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial intc-est. the above shareho.dirg represents both lega. and beneficial ownership of shares.

Nature and purpose of Reserves

Statutory reserve (Statutory Reserve pursuant to Section 45-IC of The RBI Act, 1934): Section 45IC of Reserve Bank of India Act, 1934 ("RBI Act, 1934") defines that every non banking finance institution which is a Company shall create a reserve fund and transfer therein a sum not less than twenty percent of its net profit every year as disclosed in the statement of profit and loss before any dividend is declared. The Company has not created any special reserve (20% of Profit) under Section 45-IC of RBI Act, 1934 for Current year (FY 2022-23) and Previous year (FY 2021-22) since, the Company has incurred lossess._

Mote 37: Retirement Benefit Plan Defined Contribution Plan

The Company makes Provident Fund contribution which is defined contribution plan for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 4.27 lakhs (31 March 2023: Rs. 1.74 Lakhs) for Provident Fund contribution in the Statement of Profit and Loss. The contribution payable to these plans by the Company are at rates specified in the rules of the scheme.

Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets s gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

Mote 38: Convertible Warrants

During the year the company has allotted 2,00,000 equity shares against the conversion of 2,00,000 Convertible Warrants held by Mr.Anu T Cheriyan on 05.10.2023.

Note 41 H): Contingent Liabilities

The Company is not exposed to any contingent liabilities during the current and previous year.

11.. (ii)i .Cflmmitnwnto.

The Company does not have any irrevocable commitments as at 31st March 2023 and 31st March 2022.

Note 41 (iii).l.,Lease Discloairgsientity as a lessee)

The Company has not recognised ROU asset and lease liability for all lease contracts since, all such

leases are either low value leases or short term leases (lease term of twelve months or less)._

Note 42: Fair Value Measurement

42.1 Valuation principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions , regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques.

42.2 Valuation governance

The Company's process to determine fair values is part of its periodic financial close process. The Audit Committee exercises the overall supervision over the methodology and models to determine the fair value as part of its overall monitoring of financial close process and controls. The responsibility of ongoing measurement resides with business units . Once submitted, fair value estimates are also reviewed and challenged by the Risk and Finance functions.

42.4 Valuation techniques Equity instruments

The majority of equity instruments are actively traded on public stock exchanges with readily available active prices on a regular basis. Such instruments arc classilicd as Level 1. Units held in funds arc measured based on their published net asset value (NAV), taking into account redemption and/or other restrictions. Such instruments are generally Level 2. Equity instruments in non listed entities included investment in private equity funds are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case and classified as Level 3.

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Group’s financial statements. These fair values were calculated for disclosure purposes only.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and balances, balances other than cash and cash equivalents, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 2 on the basis that no ad)ustments have been made to the balances In the balance sheet.

Loans and advances to customers

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, foreign exchange risk, probability of default and loss given default estimates.

tisk is an integral part of the Company's business and sound risk management is critical to the success. As a financial intermediary, :he Company is exposed to risks that are particular to its lending and the environment within which it operates and primarily ncludes credit, liquidity and market risks. The Company has a risk management policy which covers risk associated with the financial issets and liabilities. The Board of Directors of the company are responsible for the overall risk management approach, approving isk management strategies and principles. The company have a risk management policy which covers all the nsk associated with its assets and liabilities.

The Company has Implemented comprehensive policies and procedures to assess, monitor and manage risk throughout the Company, rhe risk management process Is continuously reviewed, improved and adapted in the changing risk scenario and the agility of the risk nanagement process is monitored and reviewed for its appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event-driven basis.

Hie Company has an elaborate process for risk management. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Credit Risk

Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting In financial loss to the Company. The Company's main income generating activity is lending to customers and therefore credit risk Is a principal risk. Credit isk mainly arises from loans and advances.

rhe credit risk management policy of the Company seeks to have following controls and key metrics that allows credit risks to be dentified, assessed, monitored and reported in a timely and efficient manner in compliance with regulatory requirements.

- Standardize the process of identifying new risks and designing appropriate controls for these risks

- Maintain an appropriate credit administration and loan review system

• Establish metrics for portfolio monitoring

- Minimize losses due to defaults or untimely payments by borrowers

• Design appropriate credit risk mitigation techniques

n order to mitigate the impact of credit risk in the future profitability, the company makes reserves basis the expected credit loss [ECU model for the outstanding loans as balance sheet date.

Fhe below discussion describes the Company’s approach for assessing impairment as stated in the significant accounting policies.

rhe Company considers a financial instrument defaulted and therefore Stage 3 (credit impaired) for ECL calculations In all cases vhen the borrower becomes 180 days past due on its contractual payments.

Vs a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of instances that may ndicate unlikeness to pay. When such events occur, the Company carefully considers whether the event should result in treating the :ustomer as defaulted and therefore assessed as Stage 3 for ECL calculations or whether Stage 2 is appropriate.

Exposure at Default (EAD)

The outstanding balance at the reporting date is considered as EAD by the Company. Considering that the PD determined above factors in amount at default, there is no separate requirement to estimate EAD.

The Company don't have historical information and hence uses the PD default rates stated by external reporting agencies. Considering the different products and schemes, the Company has bifurcated Its loan portfolio Into various pools.

Loss Given Default

The Company determines its recovery rates by analysing the recovery trends over different periods of time after a loan has defaulted. Based on its analysis of historical trends, the Company has assessed that significant recoveries happen in the year in which default has occurred.

LGD Rates have been considered based on proxy FIRB rates for all loans.

The Company has applied management overlays to the ECL Model to consider the impact of the Covid 19 pandemic on the provision. The adjustment to the probability of default has been assessed considering the likelihood of increased credit risk and consequential default due to the pandemic.

The provision computed under ECL is lower when compared with the provision prescribed as per RBI norms taking into account the time lag between an account becoming non-performing, Its recognition as such, the realisation of the security and the erosion over time in the value of security charged,make provision against sub standard assets, doubtful assets and loss assets as provided by RBI norms. Hence provisioning is considered as per RBI guidelines.

The entity shall after taking into account the degree of well defined credit weaknesses and extent of dependence on collateral security for realisation, classify its lease/hire purchase assets, loans and advances and any other forms of credit into the following classes namely.standard.substandard.doubtful assets and Loss assets.

For Loss assets,the entire asset shall be written off. If the assets are permitted to remain In the books for any reason, 100* of the outstandings is provided.

The company has decided to write off the unrecovcred Nonperforming Assets worth Rs. 14.27 Lakhs and group under other expenses to give a true and fair view of the accounts.

And for Doubtful aastes.100% provision to be created to the extent to which the advance is not covered by the realisable value of the searlty to which the entity has a valid recourse shall be made. The realisable value Is estimated on a realistic basis.

Asset 6 Liability management

Asset and Liability Management (AIM) is defined as the practice of managing risks arising due to mismatches in the asset and liabilities. Company's funding consist long term source with different maturity patterns and varying interest rates. On the other hand, the asset book also comprises of loans of different duration and interest rates. Maturity mismatches are therefore common and has an impact on the liquidity and profitability of the company. It is necessary for Company’s to monitor and manage the assets and liabilities In such a manner to minimize mismatches and keep them within reasonable limits.

The objective of this potky is to create an institutional mechanism to compute and monitor periodically the maturity pattern of the various liabilities and assets of Company to (a) ascertain in percentage terms the nature and extent of mismatch In different maturity buckets, especially the 1-30/31 days bucket, which would indicate the structural liquidity (b) the extent and nature of cumulative mismatch In different buckets indicative of short term dynamic liquidity and (c) the residual maturity pattern of repricing of assets and liabilities which would show the likely impact of movement of interest rate in either direction on profitability. This policy will guide the ALM system In Company.

The scope of ALM function can be described as follows:

- Liquidity risk management

• Management of market risks

- Others

Liquidity Risk

Liquidity risk refers to the risk that the Company may not meet Its financial obligations. Liquidity risk arises due to the unavailability of adequate funds at an appropriate cost or tenure. The objective of liquidity risk management, is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generates sufficient cash flows from operating and financial activities to meet its financial obligations as and when they fall due. Our resource mobilisation team sources funds from multiple sources. The resource mobilisation team is responsible for diversifying fund raising sources, managing Interest rate risks and maintaining a strong relationship with banks, financial institutions, mutual funds, insurance companies, other domestic and foreign financial institutions and rating agencies to ensure the liquidity risk is well addressed.

Market Risk

Aarket Risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in narket factor. Such changes in the values of financial instruments may result from changes 1n the interest rates, credit, liquidity, ind other market changes. The Company is exposed to two types of market risk as follows:

nterest Rate Risk

ntcrcst rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest ates.

tie are not subject to interest rate risk, because we lend to clients at fixed interest rates and for periods that may differ from our 'unding sources and our borrowings i.e. subordinated debts are at fixed interest rate for different periods.

’rice Risk

The Company’s exposure to price risk is not material.

Operational and business risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss. The lompany cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework anc jy monitoring arid responding to potential risks. Controls include effective segregation of duties, access, authorisation anc econciliation procedures, staff education and assessment processes, such as the use of internal audit.

1 IAs defined <n point xxv of paragraph 3 of Chapter II of these Directions

2 _Provisioning norms shall bo applicable as prescribed In these Directions_

All Accounting Standards and Guidance Notes issued By ICAI are applicable Including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/ fair value/ NAV In respect of unquoted investments shall be disclosed Irrespective of whether they are classified as long term or current in (5) above.

The Principal business of the company is financing tong and medium term loans and dealing in foreign currency. Though the company has earned income from other sources in the form of dividend on investments, interest and profit on redemption of mutual funds, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, and as such no segment reporting has been made.

Note 49: Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements.

Note 50:Previous year figures

Previous year figures have been regrouped /reclassified, where necessary, to conform current year's classification.

i) Capital to risk-weighted assets ratio,TIER I and TIER II has been computed on a standalone basis as per relevant RBI guidelines.

ii) Liquidity Coverage RatiolHighly Liquid Asset Amount(HQLA)/Total Net Cashflow}