2.05 Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a
past event exists and it is probable that an outflow of resources embodying economic benefits will be
required to settle such obligation and the amount of such obligation can be reliably estimated. If the
effect of time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognized as a finance cost. 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 embodying economic benefits or the amount of such obligation
cannot be measured reliably. When there is a possible obligation or a present obligation in respect of
which likelihood of outflow of resources embodying economic benefits is remote, no provision or
disclosure is made.
2.06 Cash and Cash Equivalents
Cash and cash equivalents comprise cash and cheques in hand, bank balances, demand deposits with
banks where the original maturity is three months or less and other short term highly liquid
investments.
2.07 Employee Benefits
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits and they are recognized in the period in which the employee renders the
related service. The Company recognizes the undiscounted amount of short-term employee benefits
expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting
any amount already paid.
The company has been legally advised that Payment of Gratuity Act, 1972 is not applicable to the
company.
2.08 Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the interest cost. Borrowing costs, if any, directly
attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalized, if any. All other
borrowing costs are expensed in the period in which they occur.
2.09 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating
resources and assessing performance of the operating segments of the Company.
2.10 Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the
end of the reporting period, the impact of such events is adjusted within the financial statements.
Otherwise, events after the balance sheet date of material size or nature are only disclosed.
2.11 Property, plant & equipment
Measurement at recognition
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at
cost. Following initial recognition, items of property, plant and equipment are carried at its cost less
accumulated depreciation and accumulated impairment losses.
The cost of an item of property, plant and equipment comprises of its purchase price including import
duties and other non-refundable purchase taxes or levies, directly attributable cost of bringing the asset
to its working condition for its intended use and the initial estimate of decommissioning, restoration and
similar liabilities, if any. Any trade discounts and rebates are deducted in arriving at the purchase price.
Cost includes cost of replacing a part of a plant and equipment if the recognition criteria are met. Items
such as spare parts, stand-by equipment and servicing equipment that meet the definition of property,
plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of
repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.
Depreciation
Depreciation on each part of an item of property, plant and equipment is provided using the written
down value method based on the useful life of the asset as prescribed in Schedule II to the Act.
De-recognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when
no future economic benefits are expected from its use or disposal. The gain or loss arising from the de¬
recognition of an item of property, plant and equipment is measured as the difference between the net
disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and
Loss when the item is derecognized.
First time adoption of Ind AS
The Company had elected to consider the carrying value of all its property, plant and equipment
appearing in the financial statements prepared in accordance with Accounting Standards notified under
the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts)
Rules, 2014 and used the same as deemed cost in the opening Ind AS Balance sheet prepared on 01
April 2018.
2.12 Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the
Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an
asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by valuation multiples, quoted share prices for
publicly traded companies or other available fair value indicators.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether
there is an indication that previously recognised impairment losses no longer exist or have decreased.
If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A
previously recognised impairment loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor
exceed the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit
or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a
revaluation increase.
2.13 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to
equity shareholders (after deducting attributable taxes) by the weighted-average number of equity
shares outstanding during the period. The weighted-average number of equity shares outstanding
during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted-average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares.
NOTE - 28 : Other Disclosures
28 (a) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating
resources and assessing performance of the operating segments of the Company. The Company is in
a single business segment (primary segment) of giving loans and making investments. The entire
revenues are billable within India and there is only one geographical segment (secondary segment).
28 (b) Contingent Liabilities :
- There were 8 (Eight) open Option Contracts in Derivative Segments at the Balance Sheet Date.
The net credit balance of ? 2,51,737/- on those contracts have been shown in Options Outstanding
A/c under Other Financial Liabilities.
- A demand of' 6,15,010/- has been raised by the Income Tax Department for the A.Y. 2014 - 2015.
The Company has preferred an appeal for the same and the appeal is pending before the office of
Commissioner of Income Tax (Appeals) - 21 (Kolkata).
- A partition suit under the Indian Partion Act, 1893 has been filed by Mr. Manoj Kumar Gupta in the
Hon'ble Calcutta High Court to which the company is also a respondent party. The amount to be
provided for contingent liability is indeterminate under the current circumstances and nature of the
case. As on the date of Balance Sheet, the case is pending before the Hon'ble Caclutta High Court.
- A case u/s 200 of Code of Criminal Procedure,1973 r.w.s. 138 of the Negotiable Instruments Act,
1881 for dishonour of cheque of value ' 3,18,58,875/- has been filed by Manoj Kumar Gupta
HUF(Karta : Mr. Manoj Kumar Gupta) against the company before the Hon'ble Karnataka High Court.
In response to the same, the Company has filed for quashing off of said case before the Hon'ble
Karnataka High Court. As on the date of Balance Sheet, the case filed by Manoj Kumar Gupta HUF
against the company is stayed with as per the interim orders of Hon'ble Karnataka High Court.
- A case u/s 200 of Code of Criminal Procedure,1973 r.w.s. 138 of the Negotiable Instruments Act,
1881 for dishonour of cheque of value ' 3,18,58,875/- has been filed by Mrs. Reena Gupta (Wife of
Mr. Manoj Kumar Gupta) against the company before the Hon'ble Karnataka High Court. In response
to the same, the Company has filed for quashing off of said case before the Hon'ble Karnataka High
Court. As on the date of Balance Sheet, the case filed by Mrs. Reena Gupta against the company is
stayed with as per the interim orders of Hon'ble Karnataka High Court.
- The Company has obtained an Unsecured Loan from Ipsa Credit Pvt. Ltd (Enterprise over which
relative of Key Management Personnel (KMP) exercises control / significant influence). The Co. has
not provided for the interest of ? 2,62,500/- on such loan due to a dispute going on between the
Company and the directors of Ipsa Credit Pvt. Ltd. (Manoj Gupta - DIN : 00333122, Reena Gupta -
DIN : 00333272, Ipsa Gupta - DIN : 02132914)
28 (d) No proceedings have been initiated or is pending against the Company fold holding any benami
property under the Benami Transactions (Prohibhition) Act, 1988 (45 of 1988) and the rules made
thereunder.
28 (e) The Company has not been declared wilful defaulter by any bank or financial Institution or other
lender.
28 (f) The Company does not have any transactions with companies struck off under section 248 of the
companies Act, 2013 as on the Balance Sheet date.
28 (g) To the best of the knowledge and belief of the management, as on the date of balance sheet, 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), including foreign
entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, 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.
28 (h) To the best of the knowledge and belief of the management, no funds (which are material either
individually or in the aggregate) have been received by the Company from any person or entity,
including foreign entity (“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.
28 (i) All applicable charges and/or satisfaction thereof are duly registered with the Registrar of Companies.
28 (j) Balance Confirmation from various parties are still awaited as on Balance Sheet date.
Previous year figures have been regrouped and re-arranged, wherever necessary, to confirm to the
28 (k) current year's classification.
(III) Fair value of assets and liabilities measured at cost/amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost are a reasonable approximation of
their fair values since the Company does not anticipate that the carrying amount would be significantly different from the values
that would be eventually received or settled. Management assessed that fair values of cash and cash equivalents, bank deposits,
loans, trade receivables, and other financial liabilities approximate their carrying amounts of these instruments, as discussed
below:
29 (c) Financial risk management
The Company is a Non-Banking Financial Company registered with the Reserve Bank of India. On account of it's business activities it is
exposed to various financial risks associated with financials products such as credit or default risk, market risk, interest rate risk, liquidity
risk and inflationary risk. However, the Company has a robust financial risk management system in place to identify, evaluate, manage
and mitigate various risks associated with its financial products to ensure that desired financial objectives are met. The Company's senior
management is responsible for establishing and monitoring the risk management framework within its overall risk management
objectives and strategies, as approved by the Board of Directors. Such risk management strategies and objectives are established to
identify and analyse potential risks faced by the Company, set and monitor appropriate risk limits and controls, periodically review the
changes in market conditions and assess risk management performance. Any change in Company's risk management objectives and
policies needs prior approval of it's Board of Directors.
(I) Credit risk
This risk is common to all investors who invest in bonds and debt instruments and it refers to a situation where a particular bond issuer is
unable to make the expected principal payments, interest rate payments, or both. Similarly, a lender bears the risk that the borrower may
default in the payment of contractual interest or principal on its debt obligations, or both. The entity continuously monitors defaults of
customers and other counterparties and incorporates this information into its credit risk controls.
Financial instruments
Risk concentration is minimized by investing in highly rated, investment grade bonds and debt instruments, particularly Government and
PSU Bonds which has the least risk of default. The Company lends to borrowers with a good credit score . Investments and loans are
reviewed by the Board of Directors on a regular basis.
(II) Market risk:
Market risk is a form of systematic risk associated with the day-to-day fluctuation in the market prices of shares and securities and such
market risk affects all securities and investors in the same manner. These daily price fluctuations follows its own broad trends and cycles
and are more news and transaction driven rather than fundamentals and many a times, it may affect the returns from an investment.
Market risks majorly comprises of two types - interest rate risk and other price risk, such as equity price risk and commodity risk.
Financial instruments affected by market risks include borrowings and investments.
Interest rate risk
Interest rate risk is a type of systematic risk that particularly affects fixed rate debt instruments like bonds and debentures. The value of
the fixed-rate debt instruments generally decline due to rise in interest rates and vice versa. The rationale is that a bond is a promise of a
future stream of payments; an investor will offer less for a bond that pays-out at a rate lower than the rates offered in the current market.
A rising interest rate scenario also affects the Company's interest expenditure on borrowed funds.
The Company monitors the interest rate scenarios on a regular basis and accordingly takes investments decisions as whether to invest
in fixed rate debt instruments, shares and securities at a particular point of time. Further, the Company’s borrowings are short-term in
nature and carry a fixed rate of interest and the company is in a position to pass on the rise in interest rates to its borrowers. However,
the borrowings of the Company are not significant to the financial statements.
Price risk
Price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. It arises from financial
assets such as investments in equity instruments, bonds, mutual funds etc. The Company is exposed to price risk arising mainly from
investments carried at fair value through FVTPL or FVOCI which are valued using quoted prices in active markets (level 1 investments).
A sensitivity analysis demonstrating the impact of change in market prices of these instruments from the prices existing as at the
reporting date is given below:
(III) Liquidity risk:
Liquidity refers to the readiness of the Company to sell and realise its financial assets. Liquidity risk is one of the most critical risk factors
for Companies which is into the business of investments in shares and securities. It is the risk of not being able to realise the true price of
a financial asset, or is not being able to sell the financial asset at all because of non-availability of buyers. Unwillingness to lend or
restricted lending by Banks and Financial Institutions may also lead to liquidity concerns for the entities.
The Company maintains a well-diversified portfolio of investments in shares and securities which are saleable at any given point of time.
A dedicated team of market experts are monitoring the markets on a continuous basis, which advises the management for timely
purchase or sale of securities. The management ensures to manage it's cash flows and asset liability patterns to ensure that the financial
obligations are satisfied in timely manner.
(IV) Inflationary risk:
Inflationary or purchasing power risk refers to the variation in investor returns caused by inflation. It is the risk that results in increase of
the prices of goods and services which results in decrease of purchasing power of money, and likely negatively impact the value of
investments. The two important sources of inflation are rising costs of production and excess demand for goods and services in relation
to their supply. Inflation and interest rate risks are closely related as interest rates generally go up with inflation.
The Company closely monitors the inflation data and analyses the reasons for wide fluctuations thereof and its effect on various sectors
and businesses. The main objective is to avoid inflationary risk and accordingly invest in securities and debt instruments that provides
higher returns as compared to the inflation in long-term.
29 (d) Capital management
For the purpose of Company's capital management, capital includes issued equity share capital, other equity reserves and borrowed
capital less cash and cash equivalents. The primary objective of capital management is to maintain an efficient capital structure to
reduce the cost of capital, support corporate expansion strategies and to maximize shareholder's value.
- - — - ----— — - -1----
NOTE - 30 : Scale Based Regulation (SBR) - Disclosure
The following disclosures are being made pursuant to Paragraph 27 of the Master Direction - Reserve Bank
of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 issued on 19.10.2023
by the Reserve Bank of India.
For the purpose of the Scale Based Regulation Disclosures, the Company falls under the category of NBFCs
- Base Layer (NBFC - BL) entity. Henceforth, the disclosures hereunder have been made as applicable to
NBFC Base Layer entities.
(a) LOAN TO DIRECTORS, SENIOR OFFICERS AND RELATIVES OF DIRECTOR
The following amount of Loans have been sanctioned to the following category of persons in accordance
with the policy approved by the Board for grant of Loan to directors, senior officers
and relatives of directors and to entities where directors or their relatives have major
5) Unhedged Foreign Currency Exposure
The Company does not have any exposure in Foreign Currency in Current Year & Previous Year. Hence, the
Company has no Unhedged Foreign Currency Exposure.
(C) RELATED PARTY DISCLOSURE (Attached in a separate sheet annexed)
(D) DISCLOSURE OF COMPLAINTS
The Company has not received any complaints from customers and from the Offices of the Ombudsman
under The Reserve Bank - Integrated Ombudsman Scheme, 2021 during the Current Year as well as
Previous Year. Hence, no separate disclouse is made in this regard.
As per our report of even date For and on behalf of the Board
FOR, MANDAWEWALA & CO.
Chartered Accountants
Sd/-
SANJAY KUMAR GUPTA
Sd/- Executive Director, DIN 00213467
[CA. ANIL KR. MANDAWEWALA]
Partner
FRN: 322130E, M. NO: 055939 Sd/-
ALOKE KUMAR GUPTA
Chief Financial Officer, DIN 00825331
1, British Indian Street.
1st Floor, Suite No. 110D,
Kolkata - 700 069. Sd/-
SANJAY KUMAR GUPTA
Dated : The 29th day of May , 2024 Company Secretary
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