3.17 Provisions, contingent liabilities and contingent assets
A. Provisions
Provisions are recognized when the Company has a present obligation (legal or
constructive) as a result of past events, and 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. When the effect
of the time value of money is material, the Company determines the level of
provision by discounting the expected cash flows at a pre-tax rate reflecting the
current rates specific to the liability. The expense relating to any provision is
presented in the statement of profit and loss net of any reimbursement.
B. Contingent liability
A possible obligation that arises from past events and 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; present obligation
that arises from past events where it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation; or the amount
of the obligation cannot be measured with sufficient reliability are disclosed as
contingent liability and not provided for.
C. Contingent asset
A contingent asset is a possible asset that arises from past events and whose existence
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. Contingent assets are
neither recognized not disclosed in the financial statements.
3.18 Taxes
A. Current tax
Current tax assets and liabilities for the current and prior years are measured at the
amount expected to be recovered from, or paid to, the taxation authorities. Current tax
is the amount of tax payable on the taxable income for the period as determined in
accordance with the applicable tax rates and the provisions of the Income Tax Act,
1961.
Current income tax relating to items recognized outside profit or loss is recognized
outside profit or loss (either in other comprehensive income or in equity). Current tax
items are recognized in correlation to the underlying transaction either in OCI or
equity.
B. Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the standalone financial statements and the corresponding tax
bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected
to apply in the period in which the liability is settled or the asset realized, based
on tax rates (and tax laws) that have been enacted or substantively enacted by the end
of the reporting period. The carrying amount of deferred tax liabilities and assets are
reviewed at the end of each reporting period.
Deferred tax relating to items recognized outside profit or loss is recognized outside
profit or loss (either in other comprehensive income or in equity). Deferred tax items
are recognized in correlation to the underlying transaction either in OCI or equity.
Deferred tax assets and liabilities are offset if such items relate to taxes on income
levied by the same governing taxJaj&s and the Company has a legally enforceable
right for such set off.
C. Goods and services tax paid on acquisition of assets or on incurring expenses for
assets are recognized net of the goods and services tax paid, except when the tax
incurred on a purchase of assets or availing of services is not recoverable from the
taxation authority, in which case, the tax paid is recognized as part of the cost of
acquisition of the asset or as part of the expense item as applicable.
The net amount of tax recoverable from, or payable to the taxation authority is
included as part of receivables or payables in the balance sheet.
3.19 Earnings per share
Basic earnings per share ("EPS") is computed by dividing the profit after tax (i.e., profit
attributable to ordinary equity holders) by the weighted average number of equities shares
outstanding during the year.
Diluted EPS is computed by dividing the profit after tax (i.e., profit attributable to ordinary
equity holders) as adjusted for after-tax amount of dividends and interest recognized in the
period in respect of the dilutive potential ordinary shares and is adjusted for any other
changes in income or expense that would result from the conversion of the dilutive potential
ordinary shares, by the weighted average number of equity shares considered for deriving
basic earnings per share as increased by the weighted average number of additional
ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares
Potential equity shares are deemed to be dilutive only if their conversion to equity shares
would decrease the net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. Dilutive potential equity shares are determined
independently for each period presented. The number of equity shares and potentially
dilutive equity shares are adjusted for share splits / reverse share splits, right issue and
bonus shares, as appropriate.
3.20 Dividends on ordinary shares
The Company recognizes a liability to make cash or non-cash distributions to equity holders
of the Company when the distribution is authorized and the distribution is no longer at the
discretion of the Company. As per the Act, final dividend is authorized when it is approved
by the shareholders and interim dividend is authorized when it is approved by the Board of
Directors of the Company. A corresponding amount is recognized directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with
fair value re-measurement recognized directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the
liability and the carrying amount of the assets distributed is recognized in the statement of
profit and loss.
2. General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage In
accordance with applicable regulations. Consequent to Introduction of Companies Act 2013, the requirement to mandatorily transfer a
specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general
reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.
3. Surplus in the Statement of Profit and Loss
Surplus in the statement of profit and loss is the accumulated available profit of the Company carried forward from earlier years. These
reserves are free reserves which can be utilized for any purpose as may be required.
4. FVOCI Equity Investments
The Company has elected to recognize changes In the fair value of investments in equity securities (other than Investment in subsidiary) In
other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity.
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Note 29.3 Derivatives
The Company has not entered into any derivative transactions and hence the disclosure required has not been made.
Note 29.4 Disclosures relating to securitization
The Company has not entered into any securitization / assignment transactions and hence the disclosure required has
not been made.
Note 29.5 Details of financial assets sold to securitization L reconstruction Company for asset reconstruction
The Company has not sold financial assets to securitization / reconstruction Company for asset reconstruction during the
year (previous year Nil)
Note 29.6 Details of assignment transactions undertaken by NBFCs
• «
The Company has not undertaken any assignment transactions and hence the disclosure required has not been made.
Note 29.7 Details of non-performance financial assets purchased/ sold.
The Company has not purchased or sold non-performing financial assets during the year (previous year Nil).
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8. Measurement of fair values
i) Valuation techniques and significant unobservable inputs
The carrying amounts of financial assets and liabilities which are at amortized cost are considered
tobe 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: Level 1 hierarchy includes financial instruments measured using quoted prices;
Level 2: The fair value of financial instruments that are not traded in active market is determined
using valuation technique which maximizes the use of observable market data and rely as little as
possible on entity specific estimates. If all significant inputs required to fair value on instrument are
observable, the instrument is included in level 2; and
Level 3: If one or more of significant input is not based on observable market data, the instrument
is included in level 3.
iii) Transfers between levels I and II
There has been no transfer in between level 1, level 2 and level 3
C. Capital
The Company maintains an actively managed capital base to cover risks inherent in the business
and is meeting the capital adequacy requirements of the local banking 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 consider the purpose of Company's
capital management.
C.l 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 maximize 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 to shareholders, return capital to
shareholders or issue 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.
Note 33 Emnlovee benefit nlan
Disclosure in respect of employee benefits under Ind AS 19 - Employee Benefit are as under:
As there are no permanent employee as on the date on balance sheet the same has not made
applicable.
Note 34 Financial risk management objectives and .policies
While 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.
The Board of Directors are responsible for the overall risk management approach and for approving
the risk management strategies and principles.
The Risk Committee has the overall responsibility for the development of the risk strategy and
implementing principles, frameworks, policies and limits. The Risk Committee is responsible for
managing risk decisions and monitoring risk levels and reports to the Supervisory Board.
The company's management is responsible for managing it assets and liabilities and the overall
financial structure. It is also primarily responsible for the funding and liquidity risks of the
company.
a) Credit risk
The company manages and controls credit risk by setting limits on the amount of risk it is willing to
accept for individual counterparties and for geographical and industry concentrations, and by
monitoring exposures in relation to such limits.
Financial assets measured on a collective
The company splits its exposure into smaller homogeneous portfolios, based on shared credit risk
characteristics, as described below in the following order:
loans are Secured
if the loans are determined to be secured
- Nature of loan i.e., based on the nature of loan
Liquid.ty risk arises because of the possibility that the Group might be unable to meet its payment
o igations when they fall due as a result of mismatch in the timing of cash flows under both
normal and stress circumstances. To limit this risk, management has devised for diversified funding
sources, and adopted a policy of managing assets with liquidity in mind and monitoring future cash
flows and liquidity on daily basis.
Maturity profile of financial liabilities
Since the company no financial liabilities in the form of borrowing, the maturity profiles of the
undiscounted cash flows are not applicable.
c) Market risk
Market risk represents the risk that the fair value or future cash flows of financial instruments will
fluctuate due to changes in market variables such as interest rates, foreign exchange rates and
equity prices.
iNofe j? Revenue from contracts with customers.
During the year the company did not earn revenue from Contracts with customers and hence
reconciliation to profit and loss account is not applicable
£jpte 36 Events occurring after the balance sheet date
There have been no events after the reporting date that require disclosure in these financial
statements.
Note 37 Standards issued hut not vet effective
There are neither new standards nor amendments to existing standards which are effective for the
annual period beginning from 1st April 2023.
Eiote 38 Previous year comparatives
Previous year's figures have been regrouped/reclassified wherever necessary, to conform to current
year's classification.
In terms of our report of even date attached
For M/s Harsh Jain & Associates
_ (Chartered Accountants)
. FRN- 007639C
m\
CA Harsh Jain
(Partner)
Ml.No. 076736
UDIN- 24076736BKDQGZ6056
Place: Durg
Date : 30.05.2024
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