2.13. Provision, Contingent Liabilities and Contingent Assets
Provisions are recognised 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:
(i) Possible obligations which will be confirmed only by future events not wholly within the
control of the Company or
(ii) 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 disclosed when probable and recognised when realisation of
income is virtually certain.
2.14. Earnings Per Share
Earnings per share is calculated by dividing the net profit or loss before OCI for the year
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the year. For the purpose of calculating diluted earnings per share, the
net profit or loss before OCI 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.
2.15. 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 108, 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.
2.16. 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 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 is determined
based on estimated fair value.
2.17. Operating Cycle
Based on the nature of products/activities of the company and the normal time between
acquisition of assets and their realisation in cash or cash equivalents, the company has
determined its operating cycle as 12 months.
2.18. Recent accounting pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to
time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards)
Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules,
2023, applicable from April 1,2023, as below:
Ind AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather
than their significant accounting policies. Accounting policy information, together with other
information, is material when it can reasonably be expected to influence decisions of
primary users of general purpose financial statements. The Company does not expect this
amendment to have any significant impact in its financial statements.
Ind AS 12 - Income Taxes
The amendments clarify how companies account for deferred tax on transactions such as
leases and decommissioning obligations. The amendments narrowed the scope of the
recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so
that it no longer applies to transactions that, on initial recognition, give rise to equal taxable
and deductible temporary differences. The Company does not expect this amendment to
have any significant impact in its financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments will help entities to distinguish between accounting policies and
accounting estimates. The definition of a change in accounting estimates has been
replaced with a definition of accounting estimates. Under the new definition, accounting
estimates are “monetary amounts in financial statements that are subject to measurement
uncertainty”. Entities develop accounting estimates if accounting policies require items in
financial statements to be measured in a way that involves measurement uncertainty. The
Company does not expect this amendment to have any significant impact in its financial
statements.
The Company’s principal financial liabilities comprise Current Tax Liabilities and Previsions. Tbe Company’s
fnancial assets include Investments, Loan, Interest receivable on Loan and Cash and Cash equivalents that
derive directly from its operations.
Tbe Company is exposed to credit risk, liquidity risk and market risk. Tbe Company's board of directors bas an
overall responsibility for the establishment and oversight of the Company's risk management framework. Tbe
board of directors bas established the risk management committee, which is responsible for developing and
monitoring the Compan/s risk management policies.
Tbe Company's risk management policies are established to identify and analyse the risks faced by tbe
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.
Tbe Company oversees how management monitors compliance with tbe Company's risk management policies
and procedures, and reviews tbe adequacy of the risk management framework in relation to tbe risks faced by
the Company.
1) Credit risk
Credit risk is tbe risk of financial loss to tbe Company if a customer fails to meet its contractual obligations and
arises principally from tbe Company's receivables from customers and loans. Tbe canying amounts of fnancial
assets represent the maximum credit risk exposure.
Loans
Tbe Company's exposure to credit risk is influenced mainly by tbe individual characteristics of each Borrower i
Customer, However, management also considers tbe factors that may influence the credit risk of its customer
base. Including tbe default risk associated with the industry. The Company's exposure to credit risk for loans and
advances by type of counterparty is as follows;
Tbe Loans are repayable on demand, however an impairment analysis is performed at each reporting date
based on tbe facts and circumstances existing on that date to identify expected losses on account of time value
of money and credit risk. For the purposes of this analysis, tbe trade receivables ate categorised into groups
based on days past due.
Investments
Tbe Company has made investments in the Quoted and unquoted Equity Shares as well as in the Preference
Shares for non trade long purpose.
The company has also made investments in the units of mutual funds on the basis of risk and returns of the
respective scheme during tbe year.
Cash and cash equivalent and Bank deposits
Credit risk on cash and cash equivalent and bank deposits is limited as the fund are in Current Account and
sometimes in invests in term deposits with banks.
2) Liquidity risk
Liquidity risk is the risk that tbe Company will encounter difficulty in meeting its obligations associated with its
fnancial liabilities. Tbe Company’s approach in managing liquidity is to ensure that it will have suffdent funds to
meet its liabilities when due.
Tbe Company is monitoring its liquidity risk by estimating tbe future infows and outflows during the start of tbe
year and planned accotdingly tbe funding lequirement. The Company manages its liquidity by term loans, inter¬
corporate deposit and 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 canying value as at the balance sheet date.
24 Contingent Liabilities not provided for:-
a. Estimated amount of contracts remaining to be executed on capital account and not provided for-Rs. Nil (PY- Rs. Nil).
b. Other Contingent Liabilities not provided for - Rs. Nil (PY - Rs. Nil).
25 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2024
26 Dues to Micro, Small and Medium Enterprises
Under the Micro, Small and Medium Enterprises Development Act, 2006, (M5MED) which came into force from 2nd October 2006, certain disclosure
are required to be made relating to Micro, Small and Medium Enterprises. As per the information available with the Company and relied upon by the
Auditors as follows:
2B Segment Reporting (Ind AS -108)
The Company is primarily engaged in investment & fnancial activities. These in context of Ind AS 106 on Segment Reporting, in the opinion of the
management, are considered to constitute one single primary segment.
30 Gratuity and other post employment benefit plans
Keeping in view the fact that there were no eligible employees with the Company during the current as well as previous years, no prevision towards
retrement benefits is required to be made in the Company's books as at the close of the year (Previous year- Nil) as per the recomendation of Ind-As
19, Employees Benefits.
32 a) Provision towards Current Tax has been made as per the Law stated under tine Income Tax Act, 1961. Rs. 8 Lac (Previous Year Rs. Nil)
b) Accounting for deferred taxation is made as per the requirement of Ind AS-12"Income Taxes".
33 In compliance of Section 45-IC of the Reserve Bank of India Act, 1934, the Company is required to create Special Reserve out of the profits aftertax
for the year. However,the Company has transferred Rs 254.43 Lac to special reserve. The aggregate amount standing to the credit of such Special
Reserve as at the Balance Sheet date is Rs. 1891.87. Lakhs (Previous Year - Rs. 1,637.44 Lakhs).
34 The previsions of Section 186 of the Act, pertaining to investment and lending activities are not applicable to the Company, since the Company is an
NBFC whose principal business is finance and investment activity, including lending.Further, during the year, the Company has not provided any
guarantee to any company.
35 Expected Credit Loss prevision as been considered as per the percentage prescnbed by the Reserve Bank of India vide Master Direction applicable
to the Company, considenng that the Management is hopeful of recovering the Principal amount.
43 Disclosure in respect of foreign exchange fluctuations during the year carried to the Statement of Profit and Loss for the current year - Nil (Previous
Year-Nil).
44 Compliance related to number of layers preschbed under clause (37) of Section 2 of the Act read with the Companies (Restriction on number of
Layers) Rules, 2017 is not applicable to the Company, keeping in view the fact that the Company has no subsidiaries.
46 Disclosure on transaction which is not recorded in the books of aooounts that has been surrendered or disclosed as income dunng the year in the tax
assessments under the Income Tax Act, 1961 is not applicable to the Company, since no such event occurred during the year.
46 Since the Company has no borrowings from banks or financial institutions on the basis of security of current assets, disclosure of the following is not
applicable:
(i) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions whether are in agreement with the books
of accounts.
(ii) Summary of reconciliation and reasons of material discrepancies.
47 The Company has rot advanoed or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the
understanding 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 oompany (Ultimate
Beneficiaries) or
(ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
48 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 Annaxure.
49 The Company has entered into Onetime Settlement Agreement with one of the borrowers which had classified as NPA. As per the terms of
arrangement the bonower has fully paid/settled the Principal amount of Rs. 49.92 Crores and the claim towards Interest was waived partially by the
Company which is amounting to Rs. 8.34 Crores.
50 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (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.
51 The Company does not have any unutilised amounts in respect of any issue of securities. No Long-term borrowings from banks and fnancial
institutions have been raised by the Company during the year.
52 The Company has no charges or satisfaction, which are yet to be registered with the Registrar of Companies.
53 a) Figures of the previous year have been re-grouped and re-classified wherever necessary to correspond with the figure of the current period,
b) Figures have been rounded off to nearest lakhs of rupees.
As per our report of even date attached For and on behalf of the Board of Directors
SKHD5 Associates
Chartered Accountants
Firm Reg. No. 105929 W
Sd /- Sd/- Sd/-
Hemanshu Solanki P.K.Jajodia Vikas Kulkarni
Partner Director Managing Director
Membership No: 132935 DIN: 00376220 DIN: 081S0938
Sd/- Sd/-
Place: Mumbai NehaTulsyan Abhijeet Salvi
?ate: 29th May, 2024 Company Secretary Chief Financial Officer
UDIN : 24132835BKGVRG6779
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