{iii) Provisions for standard and non-performing assets
Provisions for standard and non-performing assets are
created in accordance with the Non-Banking Financial (Non-
Deposit Accepting or Holding) Companies Prudential Norms
(Reserve Bank) Directions, 2007.
Further, specific provisions are also created based on the
management's best estimate of the recoverability of non¬
performing assets.
(iv) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at their cost ot
acquisition. The cost comprises purchase price, borrowing
cost if capitalisation criteria are met and directly attributable
cost of bringing the asset to its working condition for the
intended use. Any trade discount and rebates are deducted
in arriving at the purchase price.
Subsequent costs are included in the asset's carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item
can be measured reliably. All other repair and maintenance
costs are recognised in statement of profit and loss.
Subsequent measurement (depreciation method, useful
lives and residual value)
Property, plant and equipment are subsequently measured
at cost less accumulated depreciation and impairment losses.
Depreciation on property, plant and equipment is provided
on the straight-line method over the useful life of the assets
as prescribed under Part 'C’ of Schedule II of the Companies
Act, 2013.
De-recognition
An item of property, plant and equipment and any significant
part initially recognised is de-recognised upon disposal or
when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is recognised
in the statement of profit and loss, when the asset is de¬
recognised.
Capital work-in-progress
Capital work-in-progress are carried at cost, comprising
direct cost and related incidental expenses to acquire
property, plant and equipment. Assets which are not ready
for intended use are also shown under capital work-in-
progress.
(v) Intangible assets
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The
cost comprises purchase price including license fees paid,
import duties and other taxes (other than those subsequently
recoverable from taxation authorities), borrowing cost if
capitalisation criteria are met and directly attributable cost
of bringing the asset to its working condition for the intended
use.
Subsequent measurement (amortisation method, useful
lives and residual value)
Intangible assets are amortised over a period of 3 years
from the date when the assets are available for use. The
estimated useful life (amortisation period) of the intangible
assets is arrived basis the expected pattern of consumption
of economic benefits and is reviewed at the end of each
financial year and the amortisation period is revised to reflect
the changed pattern, if any.
Investment Property
Property that is held to earn rentals and for capital
appreciation. Investment property is measured initially at its
cost, including related transaction costs and where applicable
borrowing costs. Subsequent expenditure is capitalised to
the asset’s carrying amount only when it is probable that
future economic benefits associated with the expenditure
will flow to the group and the cost of the item can be
measured reliably. All other repairs and maintenance costs
are expensed when incurred. When part of an investment
property is replaced, the carrying amount of the replaced
part is derecognized. Subsequent to initial recognition,
investment properties are measured in accordance with Ind
AS 16‘s requirements for cost model.
(vi) Revenue recognition
Revenue is recognised upon transfer of control of promised
product or services to customer in an amount that reflect
the consideration which the company expects to receive in
exchange for those product or services at the fair value of
the consideration received or receivable, which is generally
the transaction price, net of any taxes/duties and discounts.
Revenue from related parties is recognised based on
transaction price which is at arm’s length.
The Company does not disaggregate its revenue from
contracts with customers by industry verticals and nature of
services.
Loans advanced/lnterest bearing securities and deposits
Revenues are recognised as earned on a day-to-day basis.
In case of interest on investments held as stock in trade,
broken period interest on every purchase or sale is split from
the price as accrued interest paid or realised. Such broken
period accrued interesl paid on purchase & received
subsequently on its sale is netted and reckoned as income.
Advisory and consultancy services
Fee is booked on the completion of task/project as per the
terms of agreement. However, where the percentage of
completion is significant enough to ascertain the outcome
reliably, revenue is recognised to the extent it can be
accurately measured.
Trading activities
In the case of trading in bonds, the profit/ loss from the
transaction is recognised on the closure of the deal and
consequent delivery of the bond.
Revenue on account of trading in shares is recognised on
the basis of each trade executed at the stock exchange
during the financial year.
In respect of non-delivery based transactions such as
derivatives and intraday, the profit and loss is accounted for
at the completion of each settlement, however in case of an
open settlement the net result of transactions which are
squared up on FIFO basis is recognised as profit/loss in the
account.
Income from non-performing assets
Income from non-performing assets are recognised as per
the guidelines of the RBI on prudential norms for income
recognition of NBFCs.
Penal interest on delayed payments
They are recognised on cash basis.
Other interest income
Interest Income is recognised on time proportion basis
considering Ihe amount outstanding and the rate applicable.
Dividend
Revenue is recognised when the company’s right to receive
payment is established by the balance sheet date.
Other revenue
In respect of other heads of income, the Company follows
the practice of recognising income on accrual basts.
Revenues recognised are net of GST wherever applicable.
(vii) Expenses
Expenses are recognised on accrual basis and provisions
are made for all known losses and liabilities. Expenses
incurred on behalf of other companies, in India, for sharing
personnel, common services and facilities like premises,
telephones, etc. are allocated to them at cost and reduced
from respective expenses.
Similarly, expenses allocation received from other companies
is included within respective expense classifications.
(viii) Borrowing costs
Borrowing costs that are directly attributable to the acquisition
and/or construction of a qualifying asset, till the time such
qualifying assets become ready for its intended use, are
capitalised. Borrowing cols consists of interest and other
cost that the Company incurred in connection with the
borrowing of funds. A qualifying asset is one that necessarily
takes a substantial period of time to get ready for Its intended
use. All other borrowing costs are charged to the Statement
of Profit and Loss as incurred basis the effective interest
rate method.
(lx) Taxation
Tax expense recognised in Statement of Profit and Loss
comprises the sum of deferred tax and current tax except to
the extent it recognised in other comprehensive income or
directly in equity.
Current tax comprises the tax payable or receivable on
taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years.
Current tax is computed in accordance with relevant tax
regulations. The amount of current tax payable or receivable
is the best estimate of the tax amount expected to be paid
or received after considering uncertainty related to income
taxes, if any. Current 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 assets and liabilities are offset only it there is a
legally enforceable right to set off the recognised amounts,
and it is intended to realise the asset and settle the liability
on a net basis or simultaneously.
Minimum alternate tax ('MAT') credit entitlement is
recognised as an asset only when and to the extent there is
convincing evidence that normal income tax will be paid
during the specified period. In the year in which MAT credit
becomes eligible to be recognised as an asset, the said asset
is created by way of a credit to the Statement of Prolit and
Loss and shown as MAT credit entitlement. This is reviewed
at each balance sheet date and the carrying amount of MAT
credit entitlement is written down to the extent it is not
reasonably certain that normal income tax will be paid during
the specified period.
Deferred tax is recognised in respect of temporary
differences between carrying amount of assets and liabilities
for financial reporting purposes and corresponding amount
used for taxation purposes. Deferred tax assets are
recognised on unused tax loss, unused tax credits and
deductible temporary differences to the extent It is probable
that the future taxable profits will be available against which
they can be used. This is assessed based on the Company's
forecast of future operating results, adjusted for significant
non-taxable income and expenses and specific limits on the
use of any unused tax loss. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date. The measurement of deferred tax
reflects the tax consequences that would follow from the
manner in which the Company expects, at the reporting date
to recover or settle the carrying amount of its assets and
liabilities. Deferred tax assets and liabilities are offset only if
there is a legally enforceable right to set off the recognised
amounts, and it is intended to realise the asset and settle
the liability on a net basis or simultaneously. Deferred tax
relating to items recognised outside statement of profit and
loss is recognised outside statement of profit or loss (either
in other comprehensive income or in equity).
(x) Employee benefits
Short-term employee benefits
Short-term employee benefits including salaries, short term
compensated absences (such as a paid annual leave) where
the absences are expected to occur within twelve months
after the end of the period in which the employees render
the related service, profit sharing and bonuses payable within
twelve months after the end of the period in which the
employees render the related services and non-monetary
benefits for current employees are estimated and measured
on an undiscounted basis.
Post-employment benefit plans are classified into defined
benefits plans and defined contribution plans as under:
Oefined contribution plans
The Company has a defined contribution plans namely
provident fund, pension fund and employees state insurance
scheme. The contribution made by the Company in respect
of these plans are charged to the Statement of Profit and
Loss.
Defined benefit plans
The Company has an obligation towards gratuity, a defined
benefit retirement plan covering eligible employees. Under
the defined benefit plans, the amount that an employee will
receive on retirement is defined by reference to the
employee's length of service and last drawn salary. The legal
obligation for any benefits remains with the Company, even
if plan assets for funding the defined benefit plan have been
set aside. The liability recognised in the statement of linancial
position for defined benefit plans is the present value of the
Defined Benefit Obligation (DBO) at the reporting date less
the fair value of plan assets. Management estimates the
DBO annually with the assistance of independent actuaries.
Actuarial gains/losses resulting from re-measurements of
the liability/asset are included in other comprehensive
income.
Other long-term employee benefits
The Company also provides the benefit of compensated
absences to its employees which are in the nature of long¬
term employee benefit plans. Liability in respect of
compensated absences becoming due and expected to avail
after one year from the Balance Sheet date is estimated in
the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method
as on the reporting date. Actuarial gains and losses arising
from experience and changes in actuarial assumptions are
charged to Statement of Profit and Loss in the year in which
such gains or losses are determined.
However, the Company does not encash compensated
absences.
(xi) Leases
Company as a lessee
The Company's lease asset classes primarily consist of
leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of a contract.
A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified
asset, the Company assesses whether:
(i) the contract Involves the use of an identified asset
(ii) the Company has substantially all the economic benefits
from use of the asset through the period of the lease
and
{iii) the Company has the right to direct the use of the asset
At the date of commencement of the lease, the Company
recognises a right-of-use (ROU) asset and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of 12 months or less (short¬
term leases) and low value leases. For these short-term and
low-value leases, the Company recognises the lease
payments as an operating expense on a straight-line basis
over the term of the lease.
Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is
reasonably certain that they will be exercised.
The ROU assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted
for any lease payments made at or prior to the
commencement date of the lease plus any initial direct costs
less any lease incentives. They are subsequently measured
at cost less accumulated depreciation and impairment losses.
ROU assets are depreciated from the commencement date
on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. ROU assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less
cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate
cash flows that are largely independent of those from other
assets. In such cases, the recoverable amount is determined
for the Cash Generating Unit (CGU) to which the asset
belongs.
The lease liability is initially measured at amortised cost at
the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in
the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of these leases.
Lease liabilities are remeasured with a corresponding
adjustment to the related ROU asset if the Company changes
its assessment of whether it will exercise an extension or a
termination option.
Lease liability and ROU assets have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.
The Company as a lessor
Leases for which the Company is a lessor is classified as a
finance or operating lease. Wheneverthe terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts
for its interests in the head lease and the sublease separately.
The sublease is classified as a finance or operating lease
by reference to the ROU asset arising from the head tease.
For operating leases, rental income is recognised on a
straight-line basis over the term of the relevant lease.
(xii) 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 (interest and other finance cost
associated) for the period attributable to equity shareholders
and the weighted average number of shares outstanding
during the period are adjusted for the effects of al! dilutive
potential equity shares.
(xili) Foreign currency
Transactions and balances
Foreign currency transactions are translated into the
functional currency, by applying the exchange rates on the
foreign currency amounts at the date of the transaction.
Foreign currency monetary items outstanding at the balance
sheet” date are converted to functional currency using the
closing rate. Non-monetary items denominated In a foreign
currency which are carried at historical cost are reported
using the exchange rate at the date of the transaction.
Exchange differences arising on monetary items on
settlement, or restatement as at reporting date, at rates
different from those at which they were initially recorded,
are recognised in the Statement of Profit and Loss in the
year in which they arise.
Transition to Ind AS
The Company has elected to exercise the option for
accounting for exchange differences arising from translation
of long-term foreign currency monetary items recognised in
the financial statements for the period ending immediately
before the beginning of the first Ind AS financial reporting
period as per the previous GAAP.
(xiv) Impairment of assets
a) Impairment of non-tlnancial 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 required, the company estimates the assets
recoverable amount. An asset's recoverable is the
higher of an asset’s fair value less costs ol 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.
If such assets are impaired, the impairment to be
recognised in the statement of Profit and loss is
measured by the amount by which the carrying amount
value of the assets exceeds the estimated recoverable
amount of the asset. An impairment toss is reversed in
the statement of profit and loss If there has been a
change in the estimates used to determine the
recoverable amount. The carrying amount of the asset
is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount
that would have been determined (net of any
accumulated amortisation or depreciation) has no
impairment loss been recognised for the asset in prior
years.
b) Impairment of financial assets
Loan assets
The company recognises loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through profit and loss. Loss
allowance for trade receivables with no significant
financing component is measured at an amount equal
to lifetime ECL. The company applies a simplified
approach in calculating Expected Credit Losses (ECLs)
on trade receivables. Therefore, the company does not
track changes in credit risk, but instead recognise a
loss allowance based on lifetime ECLs at each reporting
date. The company established a provtslon matrix that
is based on its historical credit loss experience, adjusted
for forward looking factors specific to the debtors and
the economic environment.
For all other financial assets, expected credit loss are
measured at an amount equal to the 12 month ECL,
unless there has been a significant increase in credit
risk from initial recognition in which case those are
measured at lifetime ECL. The amount of expected
credit losses (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that
is required to be recognised is recognised as an
impairment gain or loss in the statement of profit and
loss.
(xv) Financial instruments
A Financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Initial recognition and measurement
Financial assets and financial liabilities are recognised when
the Company becomes a party to the contractual provisions
of the financial instrument and are measured initially at fair
value adjusted for transaction costs. Subsequent
measurement of financial assets and financial liabilities is
described below.
Non-derivative financial assets
Subsequent measurement
l. Financial assets carried at amortised cost - a
financial asset is measured at the amortised cost if both
the following conditions are met:
* The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and
♦ Contractual terms of the asset give rise on specified
dales to cash flows that are solely payments of
principal and interest (SPPI) on the principal
amount outstanding.
After Initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost is
calculated by considering any discount or premium on
acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in Interest
income in the Statement of Profit and Loss.
ii. Investments in equity instruments - Investments in
equity instruments which are held for trading are
classified as at fair value through profit or loss (FVTPL).
For all other equity instruments, the Company makes
an irrevocable choice upon initial recognition, on an
instrument by instrument basis, to classify the same
either as at fair value through other comprehensive
income (FVOCI) or fair value through profit or loss
(FVTPL). Amounts presented in other comprehensive
income are not subsequently transferred to profit or loss.
However, the Company transfers the cumulative gain
or loss within equity. Dividends on such investments
are recognised in profit or loss unless the dividend
clearly represents a recovery of part of the cost of the
investment.
De-recognition of financial assets
Financial assets (orwhere applicable, a part of financial asset
or part of a group of similar financial assets) are de¬
recognised (i.e. removed from the Company's balance sheet)
when the contractual rights to receive the cash (lows from
the financial asset have expired, or when the financial asset
and substantially all the risks and rewards are transferred.
Further, if the Company has not retained control, it shall
also de-recognise the financial asset and recognise
separately as assets or liabilities any rights and obligations
created or retained in the transfer.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under
the liability is discharged or cancelled or expired. When an
existing financial liability is replaced by another Irom the
same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of
the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised
in the Statement of Profit and Loss.
First loss default guarantee
First loss default guarantee contracts are contracts that
require the Company to make specified payments to
reimburse the bank and financial institution fora loss it incurs
because a specified debtor fails to make payments when
due, in accordance with the terms of an agreement. Such
financial guarantees are given to banks and financial
institutions, for whom the Company acts as 'Business
Correspondent’.
These contracts are initially measured at fair value and
subsequently measure at higher of:
♦ The amount of loss allowance (calculated as described
in policy for impairment of financial assets)
• Maximum amount payable as on the reporting date to
the respective bank/financial institution which is based
on the amount of loans overdue for more than 75-90
days in respect to agreements with banks and financial
institutions.
Further, the maximum liability is restricted to the cash outflow
agreed in the agreement.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the balance sheet If there is a
currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
(xvi) Operating segments
An operating segment is a component of the Company that
engages in business activities from which it may earn
revenues and incur expenses (including revenues and
expenses relating to transactions with other components of
the Company), whose operating results are regularly
reviewed by the Company's chief operating decision maker
(CODM) to make decisions about resources to be allocated
to the segment and assess its performance, and for which
discrete financial information is available. Operating
segments of the Company are reported in a manner
consistent with the internal reporting provided to the CODM.
(xvii) Stock-in-trade
A financial instrument is classified as held for trading if it is
acquired or incurred principally for selling or repurchasing
in the near term, or forms part of a portfolio of financial
Instruments that are managed together and for which there
is evidence of short-term profit taking, or it is a derivative
not designated in a qualifying hedge relationship. Trading
derivatives and trading securities are classified as held for
trading and recognised at fair value.
2.2 New standards or amendments to the existing standards
and other pronouncements
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. As on 316i March 2025. there is no new standard notified
or amendment to any of the existing standards under
Companies (Indian Accounting Standards) Rules, 2015.
Footnote:
Term loan from HDFC Bank - for Creta Car is taken on 24.08.2022 amounting Rs. 17.07 lac- repayable in 60 equated monthly
installment of Rs. 0.35 lac from Oct 2022 and hypothecated against vehicle purchased. The last installment is due on 05-09-2027.
The interest rate is 7.30 % p.a.
Term loan from Axis Bank - for Toyota Hycross Car is taken on 21.12.2023 amounting Rs-31.00 lac- repayable in 60 equated
monthly installment of Rs. 0.64 lac from Jan 2024 and hypothecated against vehicle purchased. The last installment is due on 05-
12-2028. The interest rate is 8.70 % p.a.
Loan from others represets loan from “Vision Distribution'' which carries an interest rate of 11% p.a. and is repayable on demand.
Overdraft limit of Rs. Nil lac (previous year Rs. 609.17 lacs) is secured byway of pledged securities with Bajaj Finserv, the rate of
interest of which is 9.25% per annum.
Loan from related parties represent loan from "Anemone Holding Pvt Ltd. “ which carries an interest rate of 6.50% p.a. and is
repayable on demand.
Nature and purpose of other reseves:
a) . Securities premium
Securilies premium is used to record the premium on issue of shares. It can only be utilisied for limited purposes in accordance
with the provisions of the Companies Act, 2013.
b) . Special reserve
Special reserve is created as per the terms of section 45-10(1) of the Reserve Bank of India Act, 1934 as a statutory reserve.
c) . Capital reserve
This Capital Reserve was booked on account of sale of company's name in the year of 2007
d) . Capital Redemption Reserve
This Capital Redemption Reserve was booked on account of bought back 9,17,680 equity shares under buyback offer on 25th
July 2022 (i.e. Setlelment date) and the said shares have been extinguished on 28th July 2022.
e) . Retained earnings
Retained earnings represents the surplus in profit and loss account and appropriations.
f) . Other comprehensive income
Other comprehensive income consist of remeasurement gains/ losses on defined benefit plans carried through FVTOCl.
comprises of:
35 Operating segments
A Basis of segmentation
Seqment information is presented in respect of the Company's key operating segments. The operating segments are based on the
Company's management and internal reporting structure. The chief operating decision maker identifies primary segments based on
the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments
are the segments for which separate financial information is available and for which operating profft/loss amounts are evaluated
regularly. All operating segments' operating results are reviewed regularly by the Board of Directors to make decisions about
resources to be allocated to the segments and assess their performance.
The Board of Directors examines the Company’s performance both from a product and geographic perspective and have identified
the following reportable segments of its business:
B Information about reportable segments
Segment assets, segment liabilities and Segment protit and loss are measured in the same way as in the financial statements.
information regarding the results of each reportable segment is included below. Performance is measured based on segment profit
(before tax), as included in the internal management reports that are reviewed by the Group's Board of Directors. Segment profit is
used to measure performance as management believes that such information is the most relevant In evaluating the results of
certain segments relative to other entities that operate within these industries. Inter segment pricing, if any, is determined cn an
arm's length basis.
B Financial Guarantee contracts (FGCs) as per Ind AS 109
The Company has given corporate guarantees of Rs.Nil lac {Previous year Rs.562.84 lac) to the lenders of AGICL, subsidiary of the
Company(AGSL).
As per Ind Asl 09, Financial Guarantee contracts are realised at fair value.The fair value of the guarantee will be the present value
of the difference between the net contractual cash flows required under the loan & the net contractual cash flows that would have
been required without the guarantee.
The corporate guarantee issued by the company was merely to fulfil the requirements of loan. It would not have resulted in savings
in the interest rates.
Therefore the fair value of guarantee which represents the difference in the PV of interest payment over the period is NIL.
As per Ind AS 109, FGCs should be inilially recognised at fair value. Normally the transaction price is usually the fair value unless
it is contrary to arm’s length price.ln our case.it is not possible to reliably identify the market price for similar financial guarantee
identical to those its parent has given to its subsidiary.
Alternatively fair value can also be determined by estimating using a probability adjusted discounted cash flow analysis. However
in our case this method too would not be applicable as the management of ACMS (Parent co issuing corporate guarantee on behalf
of its subsidiary) intend that there is no probability of default by its subsidiaries due to its strong order book & cash (lows in the
forseeable future.So making a small provisioning of loss would not have any material impact in the books of either parent or
subsidiary companies.
However management intend to review the position on every balance shset date over the period of guarantee & make suitable
enlrles in the books of accounts if required,to comply with provisions of Ind as 109 on FGC. In lieu of the above explanations.no
financial entry has been made either in the books of parent or subsidiary co either at the date of inception or on balance sheet date.
B Commitments
The Company does not have any commitments as at March 31,2025 and March 31,2024.
C Contingent assets
The Company does not have any contingent assets as at March 31,2025 and March 31,2024
The Company’s borrowings have been contracted at floating rates of interest. Accordingly, the carrying value of such borrowings
(including interest accrued but not due) which approximates fair value.
The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other financial assets and liabilities,
approximates the fair values, due to their short-term nature. Fair value of non-current financial assets which includes bank
deposits (due for maturity after twelve months from the reporting date) and security deposits issmiliartothe carrying value as
there is no significant differences between carrying value and fair value.
The fair value for security deposits were calculated based on discounted cash flows using a current lending rate. They are
classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty
credit risk.
Valuation processes
The Management performs the valuations of financial assets and liabilities required for financial reporting purposes on a
periodic basis, including level 3 fair values.
b). Financial risk management
The Company has exposure to the following risks arising from financial instruments:
• Credit risk
• Liquidity risk
• Interest rate risk
Risk management framework
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company s risk management
framework. The Board of Directors have authorised senior management to establish the processes and ensure control over risks
through the mechanism of property defined framework in line with the businesses of the company.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate
risks limits and controls, to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect
changes in market conditions and the Company's activities.
The Company has policies covering specific areas, such as interest rate risk, credit risk, liquidity risk, and the use of derivative and
nnn-derivative financial instruments. Compliance with policies and exposure limits is reviewed on a continuous basis.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument tans to meet us
contractual obligations, and arises principally from the Company’s receivables from customers.
The Company's credit risk is primarily to the amount due from customer and investments. The Company maintains a defined
credit policy and monitors the exposures to these credit risks on an ongoing basis. Credit risk on cash and cash equivalents is
limited as the Company generally invests in deposits with scheduled commercial banks with high credit ratings assigned by
domestic credit rating agencies.
b). Financial risk management (continued)
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables are
unsecured and are derived from revenue earned from customers primarily located in India. The Company does monitor the
economic enviorment in which it operates. The Company manages its Credit risk through credit approvals, establishing credit
limits and continuosly monitoring credit worthiness of customers to which the Company grants credit terms in the normal
course of business.
On adoption of tnd AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company
establishes an allowance for impairment that represents its expected credit losses in respect of trade receivable. The management
uses a simplified approach (i.e. based on lifetime ECL) for the purpose of impairment loss allowance, the company estimates
amounts based on the business environment in which the Company operates, and management considers that the trade
receivables are in default (credit impaired) when counterparty fails to make payments for receivable more than 180 days past
due and create provision under provisioning norms of RBI for NBFC.
Since, majority of Company's receivables are from its related parties/ group companies & there have not been any instances
of default/ non payment by said companies. Further, the receivables are from entities other than related parties have been
regular and there are no defaults. Accordingly, the provision matrix couldn’t be applied to calculate a Default Risk Rate and the
Company made a provision of 2% on its interest receivables on loan granted following the prudence approach of accounting
Trade receivables as at year end primarily relate to revenue generated from lending of loans and interest accrued thereon.Trade
receivables are generally realised within the credit period.
This definition of default is determined by considering the business environment in which entity operates and othe macro-
economic factors. Further, the Company does not anticipate any material credit risk of any of its other receivables.
The Company believes that the unimpaired amounts are still collectible in full, based on historical payment behaviour and
extensive analysis of customer credit risk.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due. under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s repulation.
The Company believes that its liquidity position, including total cash (including bank deposits under lien and excluding interest
accrued but not due) of Rs. 758.39 lac as at March 31,2025 (March 31, 2024: Rs.21.43 lac ) and the anticipated future
internally generated funds from operations will enable it to meet its future known obligations in the ordinary course of business.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability ol funding
through an adequate amount of credit facilities to meet obligations when due. The Company s policy is to regularly monitor its
liquidity requirements to ensure that it maintains sufficient reserves of cash and funding from group companies to meet its
liquidity requirements in the short and long term.
The Company's liquidity management process as monitored by management, includes the following.
- Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met.
Maintaining rolling forecasts of the Company’s liquidity position on the basis of expected cash flows.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and includes interest accrued but not due on borrowings. _
(Ill) Market risk
Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, the Company mainly has
exposure to one type of market risk namely: interest rate risk. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk
Interest rate risk is the risk that the future cash flows of a financial Instrument will fluctuate because of changes in market
interest rates. The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the
Company to cash flow interest rate risk.
Exposure to Interest rate risk
The Company’s interest rate risk arises majorly from the term loans from banks carrying floating rate of interest. These
obligations exposes the Company to cash How interest rate risk. Since the company has no variable rate instruments in the
current year, the company is not exposed to interest rate risk.
43 Capital Management
The Company's capital management objectives are:
to ensure the Company's ability to continue as a going concern
to comply with externally imposed capital requirement and maintain strong credit ratings
to provide an adequate return to its shareholders
For the purpose of the Company's capital management, capital includes issued equity share capital and all other equity reserves
attributable to the equity holders of the Company.
Management assesses the Company’s capital requirements in orderto maintain an efficient overall financing structure. The Company
manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics
of the underlying assets.
To maintain or adjust the capital structure, the Company may return capital to shareholders, raise new debt or issue new shares.
The Company monitors capital on the basis of the debt to capital ratio, which is calculated as interest-bearing debts divided by total
capital (equity attributable to owners of the parent plus interest-bearing debts).
45 The Company does not have any material transactions with the companies struck off under section 248 of Companies Act, 2013 or
section 560 of Companies Act. 1956 during the year ended 31 March 2025 and 31 March 2024.
46 The Company has not transferred any assets that are derecognised in their entirety where the Company continues to have continuing
involvement.
47 There are no borrowing costs that have been capitalised during the year ended March 31,2025 and March 31, 2024.
48 The Company does not have any financing activities which affect the capital and asset structure of the Company without the use of
cash and cash equivalents.
49 There have been no events after the reporting date that require adjustments/disclosure in this financial statement.
50 NBFC-ND with asset size of less than Rs.500 crores are exempted from the requirement of maintaining CRAR and, hence these
ratio are not applicable to the company
51 Previous year's figures have been regrouped l reclassified as per the current year's presentation for the purpose of comparability.
Per our report of even date.
For Mohan Gupta & Co. For and on behalf of Board of Directors of
Chartered Accountants Avonmore Capital & Management Services Limited
Firm Registration No. 006519N
Himanshu Gupta Ashok Kumar Gupta Govind Prasad Agrawal
partner Managing Director Director
Membership No.: 527863 DIN: 02590928 DIN: 00008429
UDIN - 25527863BMMKMH7825
Sonal Shakti Singh
Place' New Delhi Company Secretary Chief Financial Officer
Date: 30th May, 2025 ACS: A57027 PAN: BKMPS6127D
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