(k) Provisions and other 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 an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the 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.
A present obligation that arises from past events, where it is either not probable that an outflow of resources will be
required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent
liabilities are also disclosed when 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. Claims against the Company, where the possibility of any outflow of resources in settlement is remote,
are not disclosed as contingent liabilities.
Contingent assets are not recognized in the financial statements since this may result in the recognition of income that
may never be realized. However, when the realization of income is virtually certain, then the related asset is not a
contingent asset and is recognized.
(l) Taxes
(i) Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date in the countries where the company operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either
in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted
by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner
in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and
liabilities and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities are
realised simultaneously.
(iii) Current and deferred tax for the year:
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.
(m) Cash and cash equivalents
Cash and cash equivalents comprise the net amount of short-term, highly liquid investments that are readily convertible
to known amounts of cash (short-term deposits with an original maturity of three months or less) and are subject to an
insignificant risk of change in value, cheques on hand and balances with banks. They are held for the purposes of
meeting short-term cash commitments (rather than for investment or other purposes).
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short- term deposits, as
defined above.
3 Significant accounting judgements, estimates and assumptions
The preparation of ?nancial statements in conformity with the Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and future periods are affected. Although these estimates are based on the
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could
result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
In particular, information about signi?cant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most signi?cant effect on the amounts recognized in the ?nancial statements is included in the
following notes:
Critical judgements in applying accounting polices :
(i) Fair value of financial instruments
The fair value of financial instruments 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
(i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from
active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The
inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is
required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs
related to items such as credit risk (both own and counterparty), funding value adjustments, correlation and volatility.
(ii) 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, the company estimates the asset's recoverable amount. An asset's recoverable amount is higher of an
asset's fair value less cost of disposal and its value in use. Where the carrying amount exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount.
(iii) Provision and contingent liabilities
The Company operates in a regulatory and legal environment that, by nature, has a heightened element of litigation risk
inherent to its operations. As a result, it is involved in various litigation, arbitration and regulatory investigations and
proceedings in the ordinary course of its business.
When the Company can reliably measure the outflow of economic benefits in relation to a specific case and considers
such outflows to be probable, the Company records a provision against the case. Where the probability of outflow is
considered to be remote, or probable, but a reliable estimate cannot be made, a contingent liability is disclosed.
Given the subjectivity and uncertainty of determining the probability and amount of losses, the Company takes into
account a number of factors including legal advice, the stage of the matter and historical evidence from similar incidents.
Significant judgment is required to conclude on these estimates.
(iv) Provisions for Income Taxes
Significant judgements are involved in determining the provision for income taxes including judgement on whether tax
positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can
only be resolved over extended time periods.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectation of future events that may have a financial impact on the Company and that are believed to be reasonable
under the circumstances.
4 Recent pronouncements
The Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. On March 31,2023, the MCA amended the Companies
(Indian Accounting Standards) Amendment Rules, 2023, from April 1,2023, as listed below:
(i) IND AS 101 - First time adoption of Indian Accounting Standards
The amendment relates to recognition of deferred tax assets and liabilities arising from single transactions, deferred tax
assets related to leases and decommissioning, restoration and similar liabilities for the transition date falling after April 1,
2022. The amendment has no impact on the Company as IND AS has already been implemented.
(ii) IND AS 102 - Share Based Payment
The amendment relates to the footnote to Paragraph 24 which is clarificatory in nature.
(iii) IND AS 103 - Business Combination
The amendment relates to disclosure to Paragraph 13(2) which is clarificatory in nature. The amendment has no impact
on the Company.
(iv) IND AS 107 - Financial Instruments - Disclosures
The amendment to this Standard is consequential to the amendment made in Ind AS 1.
(v) IND AS 109 - Financial Instruments
The amendment relates to non applicability of Paragraph B4.3.11 to embedded derivative contracts acquired in business
combination. The amendment has no impact on the Company.
(vi) IND AS 115 - Revenue from Contracts with Customers
The amendment relates to realignment of Paragraph 51 and Appendix B. The amendment has no impact on the Company.
(vii) IND AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather than their significant accounting
policies. Accounting policy information, together with other information, is material when it can reasonably be expected to
influence decisions of primary users of general purpose financial statements. The Company/Group does not expect this
amendment to have any significant impact in its financial statements.
(viii) IND AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
Accounting Policies, Changes in Accounting Estimates and Errors The amendments will help entities to distinguish
between accounting policies and accounting estimates. The definition of a change in accounting estimates has been
replaced with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts
in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting
policies require items in financial statements to be measured in a way that involves measurement uncertainty. The
Company/Group does not expect this amendment to have any significant impact in its financial statements
(ix) IND AS 12 - Income Taxes
Paragraph 15 and 24 relating to recognition of deferred tax liability and asset, has been amended to include exemption
for taxable temporary differences arising (i) at the time of transaction, that affects neither accounting profit nor taxable
profit (tax loss) and (ii) at the time of transaction, that does not give rise to equal taxable and deductible temporary
differences.
Paragraph 22A has been inserted to clarify that deferred tax assets and liabilities on Right of Use Assets and Lease
Liabilities to be recognized on gross basis.
This amendment is effective from April 1,2022. The effect of above amendment for the period as of April 1,2022 needs
to be taken to OCI. Other amendments to this Standard are consequential to the above amendment.
(x) IND AS 34 - Interim Financial Reporting
The amendment to this Standard is consequential to the amendment made in Ind AS 1 and is not applicable to the
Company.
4.1 Refer to Note 3.0 on recent pronouncements on IND AS 12 Taxes on Income, which is applicable from April 1,2022
relating to recognition of deferred tax asset/liabilities on Right of Use Assets and Lease Liability. In the next financial year
the lease of the property is terminating; the amount of Right of Use Assets and Lease Liability for the year under
consideration is insignificant and therefore, impact of the amendment has not been considered in the current financial
year
30. SEGMENT REPORTING
The Company is exclusively engaged in the business of of financial activites which includes trading and investment in
shares, granting of loans, etc., since the nature of these business are exposed to similar risks and return profiles, hence they
are collectively operating under a single segment. Accordingly the Company does not have any reportable Segments as per
Indian Accounting Standard 108 "Operating Segments".
31. FAIR VALUE MEASUREMENTS
A. 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 (i.e., an exit price),
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:
Level 1 - Valuation technique using quoted market price: financial instruments with quoted prices for identical instruments in
active markets that Company can access at the measurement date.
Level 2 - Valuation technique using observable inputs: Those 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.
Level 3 - Valuation technique with significant unobservable inputs: Those that include one or more unobservable input that is
significant to the measurement as whole.
C. Valuation Methodologies of Financial Instruments measured at fair value
Mutual Funds
The fair values of investments in mutual fund units is based on the net asset value (‘NAV’) as stated by the issuers of these
mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue
further units of mutual fund and the price at which issuers will redeem such units from the investors.
Equity Shares
Equity shares are fair valued based on their quoted market prices at the end of reporting period. The quoted market price used
for financial asset held by the Company is the current bid price. Such instruments are classified as Level 1.
D. Fair value of financial instrument not measured at fair value
The table below is a comparison, of the carrying amounts and fair values of the Company's financial instruments that are not
carried at fair value in the financial statements. This table does not include the fair values of non-financial assets and non¬
financial liabilities.
E. 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 Company's financial statements. These fair values were calculated for disclosure
purposes only. The below methodologies and assumptions relate only to the instruments in the above tables and, as such,
may differ from the techniques and assumptions explained in notes.
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
are a reasonable approximation of their fair value. Such instruments include: cash and cash equivalents, trade receivables,
other financial assets and other financial liabilities.
Loans
These Financial Assets are recorded at Amortised Cost.
32. FINANCIAL RISK MANAGEMENT
The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse
effects on its financial performance. The financial risks are managed in accordance with the Company’s risk management
policy which has been approved by its Board of Directors. The Company’s Board of Directors has overall responsibility for
managing the risk profile of the Company. The purpose of risk management is to identify potential problems before they occur,
so that risk-handling activities may be planned and invoked as needed to manage adverse impacts on achieving objectives.
(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 Company’s trade and other receivables, cash and cash equivalents,
other bank balances and financial assets measured at amortised cost.“Exposure to credit risk is mitigated through regular
monitoring of collections, counterparty’s creditworthiness and diversification in exposure.
Exposure to Credit Risk
The carrying amount of financial assets represents maximum amount of credit exposure. The maximum exposure to credit
risk is as per the table below, it being total of carrying amount of trade and other receivables and financial assets measured
at amortised cost.
Expected Credit Loss (ECL) on Financial Assets
The Company continuously monitors all financial assets subject to ECLs. In order to determine whether an instrument is
subject to 12 month ECL (12mECL) or life time ECL (LTECL), the Company assesses whether there has been a significant
increase in credit risk or the asset has become credit impaired since initial recognition. The Company applies following
quantitative and qualitative criteria to assess whether there is significant increase in credit risk or the asset has been credit
impaired:
- Historical trend of collection from counterparty
- Company’s contractual rights with respect to recovery of dues from counterparty
- Credit rating of counterparty and any relevant information available in public domain.
ECL is a probability weighted estimate of credit losses. It is measured as the present value of cash shortfalls (i.e. the difference
between the cash flows due to the Company in accordance with contract and the cash flows that the Company expects to
receive).
The Company has following type of financial assets that are subject to the expected credit loss:
(i) Trade and other receivables
Exposures to customers’ outstanding at the end of each reporting period are reviewed by the Company to determine incurred
and expected credit losses. Historical trends of collection from counterparties on timely basis reflects low level of credit risk.
As the Company has a contractual right to such receivables as well as the control over such funds due from customers, the
Company does not estimate any credit risk in relation to such receivables.
(ii) Cash and cash equivalents and other bank balances
The Company holds cash and cash equivalents . The credit worthiness of such banks and financial institutions is evaluated by
the management on an ongoing basis and is considered to be high.
(B) Liquidity Risk
Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the
Company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the
cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset
positions is not available to the Company on acceptable terms.
To limit this risk, management has adopted a policy of managing assets with liquidity in mind and monitoring future cash flows
and liquidity on a regular basis. The Company has developed internal control processes for managing liquidity risk.
The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the
event of an unforeseen interruption in cash flow. The Company assesses the liquidity position under a variety of scenarios,
giving due consideration to stress factors relating to both the market in general and specifically to the company.
(C) Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result
from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Com¬
pany is exposed to market risk primarily related to interest rate risk and price risk.
(i) Interest Rate Risk
The Company is mainly exposed to the interest rate risk for its Loans and Advances. The interest rate risk arises due to
uncertainties about the future market interest rate on these Loans.
As at March 31, 2024 Gross Amount of Loan given is INR 7,96,00,000/- (March 31, 2023: INR 7,56,00,000/-). These are
exposed to interest rate risk.
Sensitivity Analysis
The table below sets out the effect of increase/decrease in interest rates of 1%:
(ii) Price Risk
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related
market variables including interest rate for investments in debt oriented mutual funds and debt securities, whether caused by
factors specific to an individual investment, its issuer or the market. The Company’s exposure to price risk arises from
investments in equity securities and units of mutual funds which are classified as financial assets at Fair Value Through Profit
and Loss and is as follows:
/ A X !.. IKiniAA r>\
33. CAPITAL MANAGEMENT
The Company maintains an actively managed capital base to cover risks inherent in the business which includes issued
equity capital and all other equity reserves attributable to equity holders of the Company.
As an NBFC, the RBI requires to maintain a minimum capital to risk weighted assets ratio (“CRAR”) consisting of Tier I and
Tier II Capital of 15% of our aggregate risk weighted assets. Further, the total of Tier II capital cannot exceed 100% of Tier I
capital at any point of time. The capital management process of the Company ensures to maintain a healthy CRAR at all the
times.
37) The Reserve Bank of India (RBI) vide its circular no. RBI/2021-2022/125 DOR.STR.REC.68/21.04.048/2021-22, dated
12 November 2021 on "Prudential norms on Income Recognition, Asset Classification and Provisioning (IRACP) pertaining to
Advances - Clarifications", had clarified / harmonized certain aspects of extant regulatory guidelines with a view to ensuring
uniformity in the implementation of IRACP norms across all lending institutions. The Company has since taken necessary
steps to implement the provisions of this circular under IRACP norms effective from 12 November 2021. The aforementioned
circular has no impact on the financial results for the quarter and year ended 31 March, 2024 as the Company continues to
prepare financial statements in accordance with Indian Accounting Standards (‘Ind AS’) notified under the Companies (Indian
Accounting Standards) Rules, 2015, as amended and the RBI circular dated 13 March 2020 on "Implementation of Indian
Accounting Standards".
41. OTHER
As per MCA notification dated August 05, 2022, the central Government has notified the Companies (Accounts) fourth
Amendment Rules, 2022. As per the amended rules, Companies are required to maintain daily back-up of the books of
account and other relevant books and papers which are maintained in electronic mode on servers physically located in
India.
The books of account of the Company and other relevant books and papers are maintained in electronic mode other than
certain records and papers which are physically maintained in India. The electronic books of accounts are always readily
accessible from India and currently a daily backup is maintained on servers located outside India. The Company is in the
process of complying with the aforesaid MCA notification.
42. EARNINGS/EXPENDITURE IN FOREIGN CURRENCY
NIL (NIL)
43. TITLE DEEDS OF IMMOVABLE PROPERTIES NOT HELD IN NAME OF THE COMPANY
The Company does not possess any immovable property (other than properties where the Company is the lessee and
the lease agreements are duly executed in favour of the lessee) and hence the said diclosure regarding title deeds is not
applicable to the company.
44. BORROWINGS FROM BANK OR FINANCIAL INSTITUTION
The Company does not have any borrowings from banks or financial institutions that are used for any other purpose
other than the specific purpose for which it was taken.
45. DETAILS OF BENAMI PROPERTY HELD
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) and rules made thereunder.
46. LOANS AND ADVANCES
The Company has not granted any Loans or Advances in the nature of loans to promoters, directors, KMPs and the
related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.
47. SECURITY OF CURRENT ASSETS AGAINST BORROWINGS
The company does not have any borrowings from banks or financial institutions on the basis of security of current assets.
48. INVESTMENT PROPERTY
Since the company does not have any Investment Property as on the reporting date, the disclosure regarding determination
of fair value by Registered valuer, is not applicable to the company.
49. REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
There was no revaluation of Property, Plant & Equipment made by registered valuer during the year.
50. INTANGIBLE ASSETS
The company does not have Intangible asset as on the reporting date and hence the disclosure regarding revaluation by
registered valuer is not applicable to the company.
51. WILFUL DEFAULTER
The Company is not declared as a wilful defaulter by any bank or financial institution or other lender during the any
reporting period.
52. RELATIONSHIP WITH STUCK OFF COMPANIES
The Company has not identified any transactions or balances in any reporting periods with companies whose name is
struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.
53. REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES (ROC)
There is no charge or satisfaction yet to be registered with ROC beyond the statutory period by the company.
54. COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES
The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
55. COMPLIANCE WITH APPROVED SCHEME(S) OF ARRANGEMENTS
There are no schemes or arrangements which have been approved by the Competent Authority in terms of sections 230
to 237 of the Companies Act, 2013 during the reporting periods.
56. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM
A. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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"
B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) 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 Funding Party (Ultimate
Beneficiaries) or“(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries"
57. UNDISCLOSED INCOME
The company has no unrecorded transactions in 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)
58. DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY
The Company has not traded or invested in Crypto currency or Virtual Currency during reporting periods.
59. CSR
Since the company is not covered under section 135 of the Companies Act,2013 and hence disclosures related to CSR
activities is not applicable.
60. Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with current period’s
classification/disclosure.
Material Accounting Policies and Notes forming part 1 to 60
of the Financial Statements
As per our rep°rt of even date attached For and on behalf of the Board of Directors
For Sampat & Mehta
Chartered Accountants .. . . . .. , , .
FR No 109031W Dipen Maheshwari Atul Jain
Managing Director Director
Sanjay Rambhia DIN: 03148904 DIN: 00096052
Partner
M No.046265
Faiyaz Chaudhary Vishal Surve
Place : Mumbai Company Secretary Chief Financial Officer
Date: 24th May, 2024 M No.A68253 PAN: HFBPS9638H
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