iii. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions
are measured at the best estimate of the expenditure required to settle the present obligation at the
Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its present value
using a current pre-tax rate that reflects the current market assessments of the time value of money
and the risks specific to the obligation. When discounting is used, the increase in the provision due to
the passage of time is recognised as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or a present obligation that arises
from past events where it is either not probable that an outflow of resources will be required to settle
the obligation or a reliable estimate of the amount cannot be made.
Contingent assets are neither recognized nor disclosed except when realisation of income is virtually
certain, related asset is disclosed.
iv. Revenue Recognition:
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company
and that revenue can be reliably measured, regardless of when the payments is being made. Revenue is
measured at the fair value of the consideration received or receivable, taking into account contractually
defined terms of payment and excluding duties and taxes collected on behalf of the Government.
The Company follows the prudential norms for income recognition and provides for /writes off Non¬
Performing Assets as per the prudential norms prescribed by the Reserve Bank of India or earlier as
ascertained by the management.
a. Dividend Income
Income is recognized as and when the Company's rights to receive the payment is established, it is
probable that the economic benefits associated with the dividend will flow to the entity, the
dividend does not represent a recovery of part of cost of the investment and the amount of dividend
can be measured reliably.
In case of interim dividend, the right to receive the payment is established, when the dividend gets
approved by the Board of Directors.
In case of final dividend, the right to receive the payment is established, when the dividend gets
approved by the shareholder's in the annual general meeting.
b. Interest Income
For all the debt instruments measured at amortized cost, interest income is recorded using effective
interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or
receipts over the expected life of the financial instrument or a shorter period, where appropriate, to
the gross carrying amount of the financial asset or to amortized cost of financial liability. When
calculating EIR, the Company estimates the expected cash flows by considering all the contractual
terms of the financial instrument but does not consider expected credit losses.
c. Other Operational Revenue
Other operational revenue represents income earned from the activities incidental to the business
and is recognized when the right to receive the income is established as per the terms of the
contract.
v. Expenditure:
Expenses are accounted on accrual basis.
vi. Income Taxes:
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the
Statement of Profit and Loss except to the extent it relates to a business combination or to an item
which is recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable/receivable on the taxable income/loss for the year using
applicable tax rates for the relevant period, and any adjustment to taxes in respect of previous years.
Interest expenses and penalties, if any, related to income tax are included in finance cost and other
expenses respectively. Interest Income, if any, related to income tax is included in other income.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets
and liabilities for financial reporting purposes and the corresponding amounts used for taxation
purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of
the reporting period. Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against whichthe asset can be utilised. Deferred tax assets are reviewed
at each reporting date and reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set
off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax
liabilities relate to income taxes levied by the same taxation authority.
vii. Earnings Per Share:
Basic EPS is arrived at based on net profit after tax available to equity shareholders to the weighted
average number of equity shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential
dilutive equity shares unless impact is anti-dilutive.
viii. Cash flow Statement
Cash flows are reported using the indirect method where by the profit before tax is adjusted for the
effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating
cash receipts or payments and items of income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing activities of the Company are segregated.
ix. Investments in associates
The Company measures investments in Equity instruments of associates at cost.
x. Employee Benefits
Defined benefit plans
For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit
Method, with actuarial valuations being carried out at each balance sheet date. Measurement,
comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on
plan assets (excluding interest), is reflected immediately in the balance sheet with a charge or credit
recognised in other comprehensive income in the period in which they occur. Past service cost, both
vested and unvested, is recognised as an expense at the earlier of:
(a) when the plan amendment or curtailment occurs; and
(b) when the entity recognises related restructuring costs or termination benefits.
The retirement benefit obligations recognised in the balance sheet represents the present value of the
defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this
calculation is limited to the present value of available refunds and deductions in future contributions to
the scheme.
The Company provides benefits such as gratuity to its employees which are treated as defined benefit
plans.
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia
are recognised in the period in which the employee renders the related service. A liability is recognised
for the amount expected to be paid when there is a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
xi. Borrowing Costs
Borrowing costs include interest expense calculated using the effective interest rate method, other
costs incurred in connection with borrowing of funds and exchange differences to the extent regarded
as an adjustment to the interest costs. Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset (net of income earned on temporary deployment of
funds) are added to the cost of those assets, until such time as the assets are substantially ready for
their intended use or sale. All other borrowing costs are recognised as an expense in the period in which
they are incurred.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale.
xii. Segment Reporting • Identification of Segments
An operating segment is a component of the Company that engages in business activities from which it
may earn revenues and incur expenses, whose operating results are regularly reviewed by the
Company's chief operating decision maker to make decisions for which discrete financial information is
available. Based on the management approach as defined in Ind AS IDS, the chief operating decision
maker evaluates the Company's performance and allocates resources based on an analysis of various
performance indicators by business segments and geographic segments.
xiii. Use of Critical Estimates, Judgements and Assumptions
The preparation of the financial statements requires the use of accounting estimates, which, by
definition would seldom equal the actual results. Management also needs to exercise judgment and
make certain assumptions in applying the Company's accounting policies and preparation of financial
statements.
In the process of applying the Company's accounting policies, management has made the following
judgments, which have most significant effect on the amounts recognised in the financial statement:
a. Estimation of Defined benefit obligations
The cost of the defined benefit plans and the present value of the obligations are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate, future
salary increases and mortality rates. Due to the complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each financial year end.
The parameter most subject to change is the discount rate. In determining the appropriate discount
rate for plans, the actuary considers the interest rates of government bonds. The mortality rate is
based on publicly available mortality tables. Those mortality tables tend to change only at interval in
response to demographic changes. Future salary increase is based on expected future inflation rates.
b. Estimated fair value of unlisted/listed but thinly traded securities
The fair values of financial instruments that are not traded in an active market and cannot be
measured based on quoted prices in active markets and financial instruments that are unquoted is
determined based on generally accepted valuation technique of net worth criteria.
Where impairment allowance under Ind AS 109 is lower than the provisioning required under IRACP (including
standard asset provisioning), NBFCs are required to appropriate the difference from their net profit or loss after tax
to a separate 'Impairment Reserve'. The balance in the 'Impairment Reserve' is not reckoned for regulatory capital.
Further, no withdrawals are permitted from this reserve without prior permission from the Department of
Supervision, RBI.
Retained Earnings
Retained Earnings are the profits of the Company which has earned till date less any transfers to general reserve,
dividends , impairment reserve, other distributions paid to shareholders.
Equity Instruments through Other Comprehensive Income : This represents the cumulative gains and losses arising
on the fair valuation of equity instruments measured at fair value through other comprehensive income. The
Company transfers amounts from this reserve to retained earnings when the relevant equity securities are de¬
recognised.
18. Contingent Liabilitynot provided for in respect of: -
a) Estimated amount of contracts remaining to be executed on capital account and not provided for -
Rs. Nil (Previous year -Rs. Nil).
b) Other Contingent Liabilities not provided for -Rs. Nil (Previous year-Rs. Nil).
19. There are no amounts due and outstanding to be credited to Investor Education ^Protection Fund as
at March 31, 2024.
20. There were no dues/outstanding amounts payable to Micro, Small and Medium Enterprises included
under Financial and Non Financial Liabilities, as per the information available with the Company and
relied upon by the auditors (Previous Year-Rs. Nil).
21. In the opinion of the Board, the Current Assets, and Loans and Advances have a value on realisation in
the ordinary course of the business at least equal to the amount at which they are stated in the books
of account and adequate provision has been made for all known liabilities.
B. Measurement of fair values
i) Valuation techniques and significant unobservable inputs:
The carrying amounts of financial assets and liabilities which are at amortised cost are considered to
be the same as their fair values as there is no material differences in the carrying values presented.
ii) Financial instruments - fair value
The fair value of financial instruments as referred to in note (A) above have been classified into three
categories depending on the inputs used in the valuation technique. The hierarchy gives the highest
priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and lowest priority to unobservable inputs (Level 3 measurement).
The categories used are as follows:
-Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
-Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. prices) or indirectly (i.e. derived from prices).
-Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
iii) Transfers between levels I and II
There has been no transfer in between level I and level II.
iv) Valuation techniques
Investment in equity instruments
The majority equity instruments held by the Company are actively traded on stock exchanges with
readily available active prices on a regular basis. Such instruments are classified as level 1.
Investments in mutual Funds are valued as per the NAV prevailing at the end of the financial years
and such investments are classified as level 1.
Equity investments in unquoted instruments and some quoted equity instruments which are not
actively traded on stock exchanges are fair valued using the generally accepted valuation technique
of networth criteria and accordingly classified asLevel 2.
The associates are valued at cost as per Ind AS 27 Separate Financial Statements and classified as
Level 3.
25. Financial risk management objectives and policies
The Company's principal financial liabilities comprise Borrowings and interest payable thereon. The
Company's financial assets include Investments, Loansand Interest receivable on Loan and Cash and Cash
Equivalents that it derives directly from its operations.
The Company is exposed to credit risk, liquidity risk and market risk. The Company's board of directors has
an overall responsibility for the establishment and oversight of the Company's risk management
framework.
The Company's risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed to reflect changes in market conditions and the Company's
activities.
The Company's Board of Directors oversees how management monitors compliance with the Company's
risk management policies and procedures, and reviews the adequacy of the risk management framework in
relation to the risks faced by the Company.
1} Credit risk
Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations
and arises principally from the Company's receivables from loans and interest thereon. The carrying
amounts of financial assets represent the maximum credit risk exposure.
Loans
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each
Borrower / Customer; however, management also considers the factors that may influence the credit risk of
its customer base including the default risk associated with the industry. The Company's exposure to credit
risk for loans and advances is as follows;
The Loans are repayable on demand, however an impairment analysis is performed at each reporting date
based on the facts and circumstances existing on that date to identify expected losses on account of time
value of money and credit risk.
Cash and cash equivalent
Credit risk on Cash and Cash Equivalent is limited as the fund are in Current Account.
2) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with
its financial liabilities. The Company's approach in managing liquidity is to ensure that it will have sufficient
funds to meet its liabilities when due.
The Company is monitoring its liquidity risk by estimating the future inflows and outflows at the beginning
of the year and planned accordingly the funding requirement. The Company manages its liquidity by
borrowings, inter-corporate depositsaccepted and redemption of investment in mutual funds.
The table below summarises the maturity profile of the Company's non-derivative financial liabilities based
on contractual undiscounted payments along with its carrying value as at the balance sheet date.
3) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices.
Market risk includes interest rate risk. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, while optimizing the return.
27. Capital Management:
The Company maintains an actively managed capital base to cover risks inherent in the business and is
meeting the capital adequacy requirements of the NBFC's Sector regulator and supervisor, RBI. The
adequacy of the Company's capital is monitored using, among other measures, the regulations issued by
RBI.
The Company has complied in full with all its externally imposed capital requirements over the reported
period. Equity share capital and other equity are considered for the purpose of Company's capital
management.
The primary objectives of the Company's capital management policy are to ensure that the Company
complies with externally imposed capital requirements and maintains strong credit ratings and healthy
capital ratios in order to support its business and to maximise shareholder value.
The Company manages its capital structure and makes adjustments to it according to changes in
economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital
structure, the Company may adjust the dividend payment policy, buy back or further issue of capital
securities.
No changes have been made to the objectives, policies and processes from the previous years. However,
they are under constant review by the Board.
28. Employee Benefits Expense:
Defined Benefit Plans
The gratuity liability is not funded but is ascertained on actuarial basis as per Ind AS 19.
There are no other post-retirement benefits provided to employees. The most recent actuarial valuation
of the plan assets and the present value of the defined benefit obligation were carried out at 31 March,
2024. The present value of the defined benefit obligation, and the related current service cost and past
service cost, were measured using the Projected Unit Credit Method.
Notes:
(a) The current service cost recognized as an expense is included in the Note 14 'Employee benefits expense'
as gratuity. The remeasurement of the net defined benefit liability is included in other comprehensive
income.
(b) The estimate of future salary increases considered in the actuarial valuation takes into account the rate of
inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment
market.
(c) Based on materiality the Company is recognizing the entire liability of Rs. 3.29 Lakhs (P.Y. Rs. 2.71 Lakhs)
as non current in Note No.9: Other Non Financial Liability, which includes the portion of current liability of
Rs. 0.04 Lakhs (P.Y. Rs.0.03 Lakhs).
Note No.29
Impairment on Financial Instruments
Background of Expected Credit Loss
Expected Credit loss is a calculation of the present value of the amount expected to be lost on a financial asset, for financial
reporting purposes. Credit risk is the potential that the obligor and counterparty will fail to meet its financial obligations to the
lender. This requires an effective assessment and management of the credit risk at both individual and portfolio level.
The key components of Credit Risk assessment are:
1. Probability of Default (PD): represents the likelihood of default over a defined time horizon.
2. Exposure at Default (EAD): represents how much the obligor is likely to be borrowing at the time of default.
3. Loss Given Default (LGD): represents the proportion of EAD that is likely to be lost post-default.
The definition of default is taken as 90 days past due for all retail and corporate loans.
Delinquency buckets have been considered as the basis for the staging of all loans in the following manner:
• 0-30 days past due loans classified as stage 1
• Between 31-90 days past due loans classified as stage 2 and
• Above 90 days past due loans classified as stage 3
EAD is the total amount outstanding including accrued interest as on the reporting date.
The ECL is computed as a product of PD, EAD and LGD.
Non-Individual Loans
1.1 Credit Quality of Assets
The Non-individual/corporate book is assessed at the loan type level and the provisioning is done at an account level, which is in
excess of provisioning requirements as per the Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016. In
certain cases, the assessment is done at an account level based on past experience for future cash flows from the project.
31. The Company is primarilyengaged in the Finance & Investment activities and accordingly there is no
separate reportable segment, as per the Ind AS 108 "Operating Segments".
32. The Company will recognize the deferred tax assets, if any, in future considering the prudence aspect.
33. The Company is not required to spent any amount in terms of Section 135 of the Companies Act, 2013
on Corporate Social Responsibility.
34. Additional Regulatory Information as per Schedule III of The Companies Act, 2013
I. The Company has not borrowed funds from banks and financial institutions.
II. No proceedings have been initiated or pending against the Company for holding any benami
property under The Prohibition of Benami Property Transactions Act, 1988 and the rules made
thereunder.
III. The Company has not been declared as a Wilful Defaulter by any Bank or Financial Institution
or other Lender.
IV. The Company does not have any transactions with the companies struck off under Section 248
of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.
V. There is no charge or satisfaction of charge which is yet to be registered with Registrar of
Companies beyond the statutory period.
VI. The Company is in compliance with the provisions of Section 2(87) of the Companies Act 2013
regarding number of layers of companies.
VII. Financial Ratios- Refer Note No: 35 of Notes to Financial Statement.
VIII. No Scheme of Arrangement concerning the Company has been approved by any Competent
Authority during the financial year.
IX. Utilization of Borrowed funds and share premium
A. No funds (which are material either individually or in the aggregate) have been advanced
or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company 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
i) directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries");
or
ii) provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.
B. No funds (which are material either individually or in the aggregate) has been received by
the Company from any person or entity, including foreign entity ("Funding Party"), with
the understanding (whether recorded in writing or otherwise) that the Company shall -
i) 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
ii) provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
X. The Company does not have any transactions not recorded in the books of account that has
been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income
37. Additional information as required under various notification issued by RBI, to the extend applicable,
(other than what is already disclose elsewhere) is disclosed as an Annexure.
38. The Financial Statements are presented in Indian Rupees and all values are rounded to the nearest
Rupees in Lakhs. Previous year figures have been regrouped/reclassified wherever necessary to
correspond with the figures of the current period.
As per our report of even date attached
For 5 S R C A & CO For and on behalf of the Board of Directors
Chartered Accountants
Firm Reg. NO.108726W
Sd/- Sd/- Sd/-
SHUBHAM JAIN G.M. Loyalka Seetha Ramaiya K. Vellore
Partner Director Manaing Director
M. No.:443522 DIN:00299416 DIN:08216198
Sd/- Sd/-
Disha Jain R.S. Jalan
Place: Mumbai Company Secretary Chief Financial Officer
Dated: 23rd May, 2024
UDIN: 24443522BKDCYE8850
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