(h) Provisions, contingents Liabilities and contingent Assets
i. A Provision is recognized when the company has present obligation as a result of past
event and it is probable that outflow of resources will be required to settle the obligation
and in respect of which a reliable estimate can be made. Provisions are not discounted to
their present value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
ii. Contingent Liabilities are disclosed separately by way of note to financial statements
after careful evaluation by the managements of the facts and legal aspects of the matter
involved in case of:
a. a present obligation arising from the past event, when it is not probable that an
outflow of resources will be required to settle the obligation.
b. a possible obligation, unless the probability of outflow of resources is remote.
iii. Contingent Assets are neither recognized, nor disclosed in the financial statements
(i) Employee Benefits
Company do not follow the provision of the Indian Accounting Standard-19 “Employee benefits”
as the company do not employ more than 10 personnel. So it is the policy of the company that
any kind of provision mentioned in the Ind AS -19 will not be entertained. And the company does
not make provision for gratuity also.
In case the company’s employee limits goes beyond the prescribed limits then Ind AS-19 for
Employee benefits will be taken into consideration.
(j) Taxation
Current Tax
Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the applicable tax rates and the provision of the Income Tax Act, 1961 and the
other applicable tax laws.
Deferred Tax
Deferred tax corresponds to the net effect of tax on all timing differences, which occur as a result
of items being allowed for income tax purposes during a year different from when they were
recognised in the financial statements.
(k) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to
equity shareholders (after deducting attributable taxes) by the weighted averages number of
equity shares outstanding during the year.
For the purpose of calculating diluted earning per share, the net profit or loss for the year
attributable to equity shareholders and the weighted average number of shares outstanding during
the year are adjusted for the effects of all diluted potential equity shares.
(l) Cash and Cash Equivalents
Cash and cash equivalents in the cash flow statements comprise cash at bank and in hand and
highly liquid investments that are readily convertible into known amount of cash.
(m) Financial instruments
A financial instrument is defined as any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity. Trade receivables and payables,
loan receivables, investments in securities and subsidiaries, debt securities and other borrowings,
preferential and equity capital etc. are some examples of financial instruments
i) All financial assets are recognized at fair value including transaction costs that are
attributable to the acquisition of financial assets except in the case of financial assets recorded
at FVTPL where the transaction costs are charged to profit or loss.
ii) The Company derecognizes a financial asset (or, where applicable, a part of a financial asset)
when the right to receive cash flows from the asset have expired; or the Company has
transferred its right to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under an assignment
arrangement and the Company has transferred substantially all the risks and rewards of the
asset.
iii) All financial liabilities are recognised initially at fair value and, in the case of borrowings and
payables, net of directly attributable transaction costs. The Company’s financial liabilities
include trade payables, other payables, debt securities and other borrowings.
iv) The Company derecognises a financial liability when the obligation under the liability is
discharged, cancelled or expired
(n) Foreign currency translation
The Company’s financial statements are presented in Indian Rupee, which is also the Company’s
functional currency.
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign
currency amount the exchange rate between the reporting currency and the foreign currency at the
date of the transaction.
Foreign currency monetary items are re-translated using the exchange rate prevailing at the
reporting date. Nonmonetary items, which are measured in terms of historical cost denominated
in a foreign currency, are reported using the exchange rate at the date of the transaction.
Exchange differences.
All exchange differences are accounted in the Statement of Profit and Loss.
i. Securities Premium Account
Securities Premium Account had been created consequent to issue of shares at premium. These reserves can be utilised only for purpose in accordance with
the provision of Companies Act, 2013.
ii Investment allowance reserve
Reserve carry forward from last year
ill Reserve Under Section 45(IC) of Reserve Bank of India Act, 1934
Reserve fund is created as per the terms of section 45-IC of the Reserve Bank of India Act, 1934 as a statutory reserve,
iv Retained earning
Retained earning represents the surplus in profit and loss acounts and appropriations
25 Fair value Hierarchy
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3,
as described below:
Quoted prices in an active market (Level 1): Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Valuation techniques with observable inputs (Level 2): Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
cither directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that arc not traded in an active
market and are determined by using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimated.
If all significant inputs required to fair value an instrument are observable, then the instrument is included in level 2.
Valuation techniques with significant unobservable inputs (Level 3): If one or more of the significant inputs is not based on observable market data, the
instrument is included in level 3. This is the case for investment in unlisted equity instruments carried at FVTPI. included in level 3
26 Risk Management
Whilst risk is inherent in the Company’s activities, it is managed through an integrated risk management framework including ongoing identification,
measurement and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Company’s continuing profitability
and each individual within the Company is accountable for the risk exposures relating to his or her responsibilities. The Company is mainly exposed to
market risk, liquidity risk and credit risk. It is also subject to various operating and business risks. The Board of Directors are responsible for the overall risk
management approach and for approving the risk management strategies and principles. The Company has a robust Risk management framework to identify,
evaluate business risk and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the
competitive advantage. The framework has a different risk model which helps in identifying risk trends, exposure and potential impact analysis at a company
level.
a. Market Risk
The Company's Financial Instruments are exposed to market changes as are summarised below:
Foreign currency risk:- The Company does not have any exposure to foreign currency. Hence, any fluctuations on account of foreign currency has not arisen.
Equity price risk:-The Company does not have any exposure to investments in equity instruments. Hence, any change in market reference price in
investment in equity instrument has not arisen.
c. Credit risk
Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations.
The principal business of the Company is to provide financing in the form of loans to its clients. Credit Risk is the risk of default of the
counterparty to repay its obligations in a timely manner resulting in financial loss.Credit risk encompasses both the direct risk of default and
the risk of deterioration of creditworthiness as well as concentration risks. In order to avoid excessive concentrations of risk, the Company’s
policies and procedures include specific guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks are
controlled and managed accordingly.
27 The business of the Company falls within a single primary segment vis. .'Financial Services' and hence, the disclosure requirement of the Ind
AS 108 - "Operating Segments" is not applicable
28 Previous year’s figures have been reworked, regrouped, & reclassified wherever necessary to confirm to the current year presentation.
29 In the opinion of Board of Director, the current Assets, loans & advances have a value on realization in the ordinary course of business at least
equal to the amount at which these are stated.
30 During the year, the Company has not sold any Investments.
31 Statutory Reserve represents the Reserve Fund created u/s 45-IC of the Reserve Bank of India Act, 1934. An amount of Rs. 6,160.26
thousand (Previous Year Rs. 5,481.53 thousand representing 20% of Net Profit is transferred to the fund for the year.
Provision for nonperforming assets (NPAs) is made in the financial statements according to the
Prudential Norms prescribed by RBI for NBFCs. The Company also makes additional provision
towards loan assets, based on the management’s best estimate. Additional provision of 0.40% on
Standard assets has also been made during the year, as per stipulation of RBI on Standard assets.
Company has made provisions for Standard Assets as well as Non-Performing Assets as per the
table below:
33. The company’s business activity falls within single primary/ secondary business segment viz.
Finance Activity. The disclosure requirement of Indian Accounting standard (Ind AS) -108
“Segment Reporting “issued by the Institute of chartered Accountants of India, therefore is not
applicable.
34. The Company has the borrower companies which are involved in the business of Real estate. List
of the borrowers is given below:
35. Information as required by Non Banking Financial (Non Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Direction, 2007 is Furnished vide Annexure -1
Attached Herewith.
36. The disclosures as per Scale Based Regulation (SBR) Disclosures issued by RBI is Furnished
vide Annexure -2 Attached Herewith.
37. There is no micro, Small and Medium Enterprises, to whom the Company owes dues which
outstanding for more than 45 days as at 31st March 2025. This information as required to be
disclosed under the micro, small and medium Development Act, 2006 has been determined to the
extent such parties have been identified on the basis of information available with company.
38. The Company estimates the deferred tax created / (credit) using the applicable rate of Taxation
based on the impact of timing Difference s between financial Statements and Estimated taxable
income for the current Year.
In terms of my report of even date annexed
FOR RAJENDER KUMAR SINGAL FOR SRI AMARNATH FINANCE LIMITED
AND ASSOCIATES LLP
CHARTERED ACCOUNTANTS
FRN No. 016379N
PANKAJ GUPTA RAKESH KAPOOR MANISH KAPOOR
(PARTNER) (Managing Director) (Director)
M. No. 094909 DIN: 00216016 DIN: 00025655
RAHUL KAPASIYA SHWETA GAMBHIR
(Company Secretary) (Chief Financial Officer)
M. No 70811
Place : New Delhi
Date : 29.05.2025s
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