The Company creates a provision when there is a present obligation as a result of a past event that
probably requires an outflow of resources, and a reliable estimate can be made of the amount of
the obligation. A disclosure for_§_coQtmgent liability is made when there is a possible obligation or a
._.
present obligation that may, but probably will not, require an outflow of resources. Where there is
possible obligation or a present obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
Provisions for onerous contracts i.e. contracts where the expected unavoidable costs of meeting
the obligations under the contract exceed the economic benefits expected to be received under it,
are recognised when it is probable that an outflow of resources embodying economic benefits will
be required to settle a present obligation as a result of an obligating event, based on a reliable
estimate of such obligation.
I. Financial Instruments
/. Initial recognition of financial instruments:
The Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial assets and liabilities arc recognized at fair
value on initial recognition, except for trade receivables which are initially measured at
transaction price. Financial asset and liability not recorded at fair value through profit and loss
(FVTPL), is initially measured at fair value plus transaction costs that are directly attributable to
its acquisition or issue.
HÝ Subsequent measurement of financial assets:
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible
into known amounts ot cash that are subject to an insignificant risk of change in value and
having original maturities of three months or less from the date of purchase, to be cash
equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted
for withdrawal and usage.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held
within a business whose objective is to hold these assets in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these
financial assets are held within a business whose objective is achieved by both collecting
contractual cash flows that give rise on specified dates to solely payments of principal and
interest on the principal amount outstanding and by selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at
amortized cost or at fair value through other comprehensive income on initial recognition. The
transaction costs directly attributable to the acquisition of financial assets and liabilities at fair
value through profit or loss are immediately recognised in profit or loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest
method. For trade and other payables maturing within one year from the Balance Sheet date,
the carrying amounts approximate fair value due to the short maturity of these instruments. '
/V. De-recognition of financial instruments
The company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire or it transfers the financial asset and the transfer qualifies for de¬
recognition under Ind-As 109. A financial liability (or a part of a financial liability) is
derecognized from the Company's Balance Sheet when the obligation specified in the contract
is discharged or cancelled or expires.
In determining the fair value of its financial instruments, the Company uses a variety of
methods and assumptions that are based on market conditions and risks existing at each
reporting date. The methods used to determine fair value include discounted cash flow
analysis, available quoted market prices and dealer quotes. All methods of assessing fair value
result in general approximation of value, and such value may never actually be realized
v. Fair value measurement
In determining the fair value of its financial instruments, the Company uses a variety of
methods and assumptions that are based on market conditions and risks existing at each
reporting date. The methods used to determine fair value include discounted cash flow
analysis, available quoted market prices and dealer quotes. All methods of assessing fair value
result in general approximation of value, and such value may never actually be realized.
For all other financial instruments, the carrying amount approximates fair value due to the
short maturity of those instruments.
24 Contingent Liabilities
A. Claims against the Company not acknowledged as debt: Provision is not considered necessary for the following Income Tax demands in
respect of which the Company has filed letters with the jurisdictional Assessing Officer disputing the said demands and requesting for
rectification: 6
a. Assessment Year 2015-16 : Rs. 15.90 Lakhs (Previous Year: Rs. 15.90 Lakhs)
b. Assessment Year 2019-20 : Rs.0.54 Lakhs (Previous Year : Rs.0.54 Lakhs)
These claims by the Income Tax Department represent demands raised on account of error in computing the total income of Assessment
Year 2015-16 and brought forward depreciation allowance not considered in computing the total income of Assessment Year 2019-20.
These matters are pending before the jurisdictional Assessing officer and the Management expect that these demands will be ultimately
rectified and cancelled by the Assessing Officer and there will be no material adverse effect on the Company's financial position and results
of operations.
B. Additional liability, If any, arising pursuant to assessments under various fiscal statutes shall be accounted for in the year of assessment.
C. Contingent liablities as may arise due to delayed compllance/non-compliance, if any, of various fiscal statutes-amount not ascertainable
27 Financial Instruments by Category
Financial assets and financial liabilities are measured at fair value In the financial statement and are grouped into three levels of a fair
value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Fair value hierarchy
Level 1: quoted prices (unadjusted) in active markets for financial instruments.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
Level 3: unobservable inputs for the asset or liability.
ii) Risk Management
The Company's activities expose it to market risk, credit risk and liquidity risk. The Company's Board of Directors has overall
responsibility for the establishment and oversight of the Company's risk management framework. This note explains the sources
of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
A) Credit risk
Credit risk arises from the possibility that the counterparty will cause financial loss to the company by failing to discharge its
obligation as agreed. To manage this, the Company periodically assesses the financial reliability of the counter parties, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.
Credit risk arises primarily from financial assets such as trade receivables, investments, other balances with banks and loan and
advances.
The company provides for expected credit loss in case of trade receivables when there is no reasonable expectation of recovery.
The company continues to engage to recover the receivable due. Where recoveries are made, these are recognised in profit or
loss. Credit risk arising from investments in mutual funds and other balances with banks is limited as the counterparties are
banks and financial institutions with high credit ratings.
The company did not have any outstanding receivables as at March 31, 2024 and March 31, 2023. Accordingly, the company has
not made any ECL provisions
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. The objective of liquidity risk management is to maintain
sufficient liquidity and ensure that funds are available for use as per requirements. The Company's principal sources of liquidity
are cash and cash equivalents and investments. The Company has consistently generated sufficient cash flows from its operations
and believes that these cash flows along with its current cash and cash equivalents and funding arrangements are sufficient to
meet its financial obligations as and when they fall due. Accordingly, liquidity risk is perceived to be low.
C) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices. The value of a financial instrument may change due to changes in the interest rates. Financial instruments affected by
market risk includes quoted equity shares and debt mutual funds.
ISf if,
29 Capital Management
The Company's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to
maximise shareholder value.
For the purpose of the Company's capital management, capital includes capital and all other equity reserves. The Company
manages its capital structure and makes adjustments in the light of changes in the economic environment. In order to maintain or
achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business
based on its long term financial plans. As at March 31, 2024, the Company has only one class of equity shares. Hence, there are
no externally imposed capital requirements.
30 Segment Reporting
The Company primarily operates in single business and geographical segment. Hence, no additional disclosures are required to be
given as per Ind AS IDS on Operating Segments, other than those already given in the financial results.
31 Corporate Social Responsibility
The company does not meet the eligibility criteria set out in section 135(1) of Companies Act 2013. CSR obligation is not aplicablc
to the company.
32 Dues To Micro And Small Enterprises
Information related to Micro, Small and Medium Enterprises Development Act, 2006 (Act) has been determined to the extent
such parties have been identified on the basis of information available with the Company. There outstanding balance due to such
parties at year end is Rs. Nil (Previous Year Nil).
33 Events after reporting date
There have been no events after the reporting date that require disclosure in this financial statement.
34 The disclosure on the following matters required under Schedule III as amended, not being relevant or applicable In case of the
Company, are not covered:
a The Company has not traded or invested in crypto currency or virtual currency during the financial year.
b No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
c I he Company has no transactions with the Companies struck oft under the Companies Act, 2013 or Companies Act, 1956
d Thp Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.
e No satisfaction of charges are pending to be filed with ROC.
f There arc no transactions which arc not recorded in the books of account which have been surrendered or disclosed as income
dunng the year in the tax assessments under the Income Tax Act, 1961.
g Therp havp hppn no revaluation of revaluation of Plant, Property and Equipment during the current year.
h The Company has not entered into scheme of arrangement in current or previous financial year.
i The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
other kind of funds) to or in any other person or entity, including foreign entity ("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 Benpficiarips") or prnvirip any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
j The Company has not received any funds (which are material either individually or in the aggregate) from any person or entity,
including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company
shall, 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.
35 Previous year’s figures have been regrouped/reclassified wherever required.
FOR KAMDAR DALAL & ASSOCIATES For and on behalf of the Board of Directors
FIRM REGISTRATION NO. : 129596W - ---. SHRFENATH INVESTMENT COMPANY LIMITED
CHARTERED ACCOUNTANTS
iff,' Z'%
------ 9 ( Cn nlantSl ^ JATIN JAIN ^HWINJAIN
S.K.KAMDAR \l^iAccOU ' JS}JJ MANAGING DIRECTOR DIRECTOR
PARTNER ’v? ^ DIN: 08521872 DIN: 00173983
MEMBERSHIP NO. : 032878 (uY*
PRIYADHANUKA M/tfUR KADAKIA
COMPANY SECRETARY CHIEF FINANCIAL OFFICER
Membership No. A34564
Mumbai: Dated 23/05/2024 /^
(If MUMBAIj!j
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