k) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation, as a result of past events,
and when a reliable estimate of the amount of obligation can be made at the reporting date.
These estimates are reviewed at each reporting date and adjusted to reflect the current best
estimates. Provisions are discounted to their present values, where the time value of money is
material.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not wholly within the
control of the Company or
• Present obligations arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of
the obligation cannot be made.
Contingent assets are neither recognised nor disclosed except when realisation of income is
virtually certain, related asset is disclosed.
l) 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
i. 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 dates 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 taking into account 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.
iii. Investments in mutual funds/venture capital funds/alternative investment funds
(AIF) - Investments in mutual funds, venture capital funds and AIF are measured at fair
value through profit and loss (FVTPL).
iv. Investments held for trading purposes - The Company has investments in equity
instruments, mutual funds, debentures, bonds etc. which are held for trading purposes
and therefore, classified as at fair value through profit or loss (FVTPL).
De-recognition of financial assets
Financial assets (or where applicable, a part of financial asset or part of a group of similar
financial assets) are derecognised (i.e. removed from the Company’s balance sheet) when the
contractual rights to receive the cash flows 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 derecognise the financial asset and recognise
separately as assets or liabilities any rights and obligations created or retained in the
transfer.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at
amortised cost using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from 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.
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.
m) 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 all dilutive potential equity shares.
n) Segment reporting
The Company identifies segment basis the internal organization and management structure.
The operating segments are the segments for which separate financial information is available
and for which operating profit/loss amounts are regularly by the executive committee (‘chief
operating decision maker1) in deciding how to allocate resources and in assessing
performance. The accounting policies adopted for segment reporting are in line with the
accounting policies of the Company. Segment revenue, segment expenses, segment assets
and segment liabilities have been identified to segments on the basis of their relationship with
the operating activities of the segment.
o) Significant management judgement in applying accounting policies and estimation
uncertainty
The preparation of the Company’s financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the related disclosures. Actual results may differ from
these estimates.
Significant management judgements
Recognition of deferred tax assets - The extent to which deferred tax assets can be
recognized is based on an assessment of the probability of the future taxable income against
which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets - The evaluation of applicability of
indicators of impairment of assets requires assessment of several external and internal
factors which could result in deterioration of recoverable amount of the assets.
Provisions - At each balance sheet date basis the management judgment, changes in facts
and legal aspects, the Company assesses the requirement of provisions against the
outstanding contingent liabilities. However, the actual future outcome may be different from
this judgement.
Significant estimates
Useful lives of depreciable/amortisable assets - Management reviews its estimate of the
useful lives of depreciable/amortisable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical and economic
obsolescence that may change the utility of assets.
Defined benefit obligation (DBO) - Management’s estimate of the DBO is based on a
number of underlying assumptions such as standard rates of inflation, mortality, discount
rate and anticipation of future salary increases. Variation in these assumptions may
significantly impact the DBO amount and the annual defined benefit expenses.
Fair value measurements - Management applies valuation techniques to determine the fair
value of financial instruments (where active market quotes are not available). This involves
developing estimates and assumptions consistent with how market participants would price
the instrument.
13.1 General reserve
The Mandatory transfer to general reserve is not required under the Companies Act, 2013.
13.2 Retained earnings
All the profits made by the Company are transferred to retained earnings from statement of profit and loss.
13.3 Reserve Fund u/s 45-IC of RBI Act 1934
The Company creates a reserve fund in accordance with the provisions of section 45-IC of the Reserve Bank of India Act, 1934 and transfers therein an amount of euqal
to/more than twenty per cent of its net profit of the year, before declaration of dividend. Accordingly, during the year, the Company has created Statutory Reserve Fund
amounting to Rs. 20.46 Lakhs (March 31, 2022: Rs.36.19 Lakhs).
13.4 Other comprehensive income
(i) The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are
accumulated within the FVOCI reserve within equity. The Group transfers amounts from this reserve to retained earnings when the relevant equity securities are
derecognised.
Note: 27 Provision for Standard Asset and Diminuation in Investment
a) As per RBI Guidelines a Provision of 0.25% (Previous Year - 0.25%) of Standard Asset has been created
b) Diminuation in Value of Investment of Hug Foods Pvt. Ltd has been provided during the year being permanent in nature.
Note : 28
Disclosure of details as required in terms of paragraph 18 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms
(Reserve Bank) Directions, 2016 annexed.
Note : 29
The Company had Investment in Cotton County Retail Limited. As per the scheme of Amalgamation of Cotton County Retail Limited and Nahar Industrial Limited { CP (CAA) no. 37/ CHD/Pb/2022
} approved by honourable NCLT wef. 30.03.2023, Equivalent value of shares of Nahar Industrial Limited are now transferred in the name of the comapny. Cotton County Retail Limited is now
mergered with Nahar Industrial Limited but corporate action is pending till finalization of financials.
Note : 30
Business support services & Financial Consultancy Services are in the nature to create the lead of investment, insurance, stock brokers etc.
Note : 31
Previous year figures have been regrouped/recasted/rearranged/reclassified wherever necessary to make them comparable.
Valuation Techniques for fair value disclosures (Level 1 , Level 2 and Level 3)
a) Investment in Quoted Equity Investments - Level 1 - Investment in listed equity instruments are measured at their readily available quoted price in the market.
b) Investment in Unquoted Equity Investments - Level 3 - the Company has used earning capitalisation method (fair value approach) discounted at a rate to reflect the risk involved in the business.
c) Investment in Mutual funds - Level 1 - Investment in mutual funds are measured at their readily available net asset value (NAV) (per unit) in the market.
d) Investment in Venture Capital Funds and Alternative Investment Funds Level 3 - Investment in venture capital funds and alternative investment funds are measured at their fair value as per the Net
Asset Value (NAV) Certificate shared by the fund/investee party.
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:
Financial assets and liabilities
For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value.
Such instruments include: cash and balances, balances other than cash and cash equivalents, loans, trade payables, short term borrowings, inter company loan and contract liability without a specific
maturity.
In order to avoid excessive concentrations of risk, the Group’s policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks
are controlled and managed accordingly.
Credit risk
Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company's exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances,
investments, loan assets, trade receivables and other financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit
risk controls.
Credit risk management
The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company
assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.
(i) Low credit risk
(ii) Moderate credit risk
(iii) High credit risk
Cash and cash equivalents and bank deposits
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.
Loans
Credit risk related to borrower's are mitigated by considering collateral's/bank guarantees/letter of credit, from borrower's. The Company closely monitors the credit-worthiness of the borrower's through
internal systems and project appraisal process to assess the credit risk and define credit limits of borrower, thereby, limiting the credit risk to pre-calculated amounts. These processes include a detailed
appraisal methodology, identification of risks and suitable structuring and credit risk mitigation measures. The Company assesses increase in credit risk on an ongoing basis for amounts loan receivables
that become past due and default is considered to have occurred when amounts receivable become one year past due.
Other financial assets measured at amortized cost
Other financial assets measured at amortized cost includes loans and advances to employees, security deposits, insurance claim receivables and others. Credit risk related to these other financial assets is
managed by monitoring the recoverability of such amounts continuously.
B) Credit risk exposure
(i) Expected credit losses for financial assets other than loans
- For cash and cash equivalents and other bank balances - Since the Company deals with only high-rated banks and financial institutions, credit risk in respect of cash
and cash equivalents, other bank balances and bank deposits is evaluated as very low
- For investments - Considering the investments are in equity shares, mutual funds, and government securities, credit risk is considered low
- For loans comprising security deposits paid - Credit risk is considered low because the Company is in possession of the underlying asset.
- For other financial assets - Credit risk is evaluated based on Company's knowledge of the credit worthiness of those parties and loss allowance is measured for 12
month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The Company does not
have any expected loss based impairment recognised on such assets considering their low credit risk nature, though the reconciliation of expected credit loss for all
sub categories of financial assets (other than loans) are disclosed below:
ii) Expected credit loss for loans
The Company follows a ‘three-stage’ model for impairment based on changes in credit quality since initial recognition as summarised below:
A financial instrument that is not credit-impaired on initial recognition is classified in ‘Stage 1’ and has its credit risk continuously monitored by the Company i.e. the default in repayment is within the
range of 0 to 30 days.
If a significant increase in credit risk (‘SICR’) since initial recognition is identified, the financial instrument is moved to ‘Stage 2’ but is not yet deemed to be credit-impaired i.e. the default in repayment is
within the range of 31 to 90 days.
If the financial instrument is credit-impaired, the financial instrument is then moved to ‘Stage 3’ i.e. the default in repayment is more than 90 days
The Expected Credit Loss (ECL) is measured at 12-month ECL for Stage 1 loan assets and at lifetime ECL for Stage 2 and Stage 3 loan assets. ECL is the product of the Probability of Default, Exposure
at Default and Loss Given Default. Forward-looking economic information(including management overlay) is included in determining the 12-month and lifetime PD, EAD and LGD. The assumptions
C) 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 due.
The Company maintains felxibility in funding by maintaining availability under committed credit lines. Management monitors the Company's liquidity positions (also comprising the undrawn borrowing
facilities) and cash and cash equivalents on the basis of expected cash flows. The Company also takes into account liquidity of the market in which the entity operates.
(i) Maturities of financial liabilities
The tables below analyses the Company financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash
flows:
Note : 34 Capital management
The Company’s capital management objectives are
- to ensure the Company’s ability to continue as a going concern
- to cmply with externally imposed capital requirement and maintain strong credit ratings
- to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet. Management assesses the Company’s capital
requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. 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. In order to maintain or adjust the
capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Notes:
1 As defined in point xix of paragraph 3 of Chapter 2 of these Directions.
2 Provisioning norms shall be applicable as prescribed in these Directions.
3 All Indian Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets
acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted
investments shall be disclosed irrespective of whether they are classified as long term or current in (5) above.
(i) There are no proceedings initiated or pending against the Company for holding any benami property
under the Prohibition of Benami Property Transactions Act, 1988 and rules made.
(ii) The Company has not been declared a wilful defaulter by any bank or financial institution or
government or any government authority.
(iii) The company has not incurred any transactions with the companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956 for the year ended as at 31 March 2025.
(iv) The Company does not have any charges or satisfaction which are yet to be registered with the
Registrar of Companies beyond the statutory period.
(v) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the
Act read with the Companies (Restriction on number of Layers) Rules, 20I7.
(vi) The Company has not entered into any scheme of arrangement which has an accounting impact on
current or previous financial year.
(vii) The Company has not surrendered or disclosed any transactions, previously unrecorded as income in
the books of account, in the tax assessments under the Income Tax Act, 1961 as at year ended 31 March
2025.
(viii) The Company has not traded or invested in crypto currency or virtual currency during the current or
previous year.
(ix) The title deeds of immovable properties disclosed in the standalone financial statements are held in the
name of the Company.
As per our Report of even date
For YAPL & Company Kovalam Investments and Trading Co Limited
Chartered Accountants
FRN No.017800N
(CA Pankaj Lakhanpal) Navdeep Sharma Komal Jain
Partner Director Director
M.No.097993 DIN: 00454285 DIN:00399948
UDIN : 25097993BMIXXZ5395
Place: Ludhiana
Date: 23.05.2025 Jyoti Sud Jai Karan Singh
Company Secretary cum CFO Manager
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