2 Significant accounting policies
A Statement of Compliance and basis of preparation
The financial statements for the year ended March 31, 2025 have been prepared by the Company in
accordance with Indian Accounting Standards (‘Ind AS’) notified by the Ministry of Corporate Affairs,
Government of India under the Companies (Indian Accounting Standards) Rules, 2015 notified under
Section 133 of the Companies of the Act.
Further, the Company has complied with all the directions related to implementation of Indian Accounting
Standards prescribed for Non-Banking Financial Companies (NBFCs) in accordance with the RBI notification
no. RBI/2019-20/170 DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020. Any
application guidance /regulators are implemented as and when they are issued/ applicable.
The financial statement are prepared and presented in the format prescribed in the Division III of Schedule
III of the Act.
A summary of the significant accounting policies and other explanatory information is in accordance
with the Companies (Indian Accounting Standards) Rules, 2015 as specified under section 133 of the
Act including applicable Ind AS and accounting principles generally accepted in India. The Company
consistently applies the following accounting policies to all periods presented in these financial statements,
unless otherwise stated.
B Functional and Presentation currency
These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency.
All amounts have been denominated in Lakh and rounded off to the nearest two decimal, except when
otherwise indicated. The Company has present currency of financial statements in H in Lakh and accordingly
all the figures have been rounded off to the nearest Lakh.
C Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following material items:
• Certain financial assets at Fair value through other comprehensive income (FVTOCI).
• Financial instruments at Fair value through profit and loss (FVTPL) that is measured at fair value
D Measurement of fair value
A number of Company’s accounting policies and disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities. The Company has established policies and procedures
with respect to the measurement of fair values. Fair values are categorised into different levels in a fair value
hierarchy based on the inputs used in the valuation techniques as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly or indirectly.
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
E Recent accounting pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to t ime. For the year ended March 31,
2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating
to sale and leaseback transactions, applicable to the company w.e.f. April 1, 2024. The Group has reviewed
the new pronouncements and based on its evaluation has determined that it does not have any significant
impact in its financial statements.
F Use of estimates and judgements and Estimation uncertainty
In preparing these financial statements, management has made judgements, estimates and assumptions
that affect the application of the Company’s accounting policies and the reported amounts of assets,
liabilities, income, expenses and the disclosures of contingent assets and liabilities as on the date of financial
statements and the reported income and expenses for the reporting period. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are
recognised prospectively.
Key sources of estimation of uncertainty at the date of financial statements, which may cause a material
adjustment to the carrying amount of assets and liabilities within the next financial year are included in the
following notes:
- Note J - Impairment of financial instruments: determining inputs into the Expected Credit Loss (ECL)
model, including incorporation of forward-looking information and assumptions used in estimating
recoverable cash flows
- Note J - determination of the fair value of financial instruments with significant unobservable inputs
- Note P - recognition of deferred tax assets: availability of future taxable profit against which carry-forward
tax losses can be used
- Note Q - estimation of claims and liabilities
Judgements:
Information about judgements made in applying policies that have the most significant effects on the
amount recognised in the standalone financial statements is included in the following note:
Classification of financial assets:
Assessment of the business model within which the assets are held for sell, held for sell and maturity and
held for maturity.
G Revenue Recognition
The Company recognises income on accrual basis to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured. However, where the ultimate collection
of revenue lacks reasonable certainty, revenue recognition is postponed.
i) Interest Income
Interest income from financial assets is recognised on accrual basis using the effective interest rate
(EIR) method. The effective interest rate is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the gross carrying amount of a financial asset. When
calculating the effective interest rate, the Company estimates the expected cash flows by considering
all the contractual terms of the financial instrument but does not consider the expected credit losses.
The calculation of the effective interest rate includes transaction costs and fees paid or received that are
an integral part of the effective interest rate. Transaction costs include incremental costs that are directly
attributable to the acquisition or issue of a financial asset or financial liability.
The ‘Amortised cost’ of a financial asset is the amount at which the financial asset is measured on
initial recognition minus the principal repayments, plus or minus the cumulative amortisation using
the effective interest method of any difference between that initial amount and the maturity amount
adjusted for any expected credit loss allowance.
Interest on loan other then above is recognised on accrual basis as per the term and condition of the
loan agreement, except in the case of non-performing assets where it is recognized, upon realization,
as per the Prudential Norms / Directions of the Reserve Bank of India, applicable to Non-Banking
Financial Companies.
ii) Dividends
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is
established and no significant uncertainty as to collectability exists.
iii) Net gain or fair value change
Any differences between the fair values of the financial assets classified as fair value through the profit
or loss, held by the Company on the balance sheet date is recognised as an unrealised gain/loss in the
statement of profit and loss. In cases there is a net gain in aggregate, the same is recognised in "Net
gains or fair value changes” under revenue from operations and if there is a net loss the same is disclosed
“Expenses”, in the statement of profit and loss.
iv) Income from financial instruments at FVTPL
Income from financial instruments at FVTPL includes all gains and losses from changes in the fair value
of financial assets and financial liabilities at FVTPL except those that are held for trading.
v) Sale of Securities (stock in trade)
Revenue from sale of stock in trade of shares and securities is recognised when a binding obligation has
been entered into and revenue can be reliably measured.
vi) Profit/Loss on derivative instrument (future and options) are recognised on a marked to market basis.
vii) Other Income
The Company recognises all other items of income on accrual basis as it becomes due.
H Property, Plant and Equipments (PPE)
PPE is recognised when it is probable that future. economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. PPE are stated at cost of acquisition (including
incidental expenses), less accumulated depreciation and accumulated impairment loss, if any.
Assets held for sale or disposals are stated at the lower of their net book value and net realisable value.
Advances paid towards the acquisition of PPE outstanding at each balance sheet date are disclosed
separately under other non-financial assets.
Capital work in progress comprises the cost of PPE that are not ready for its intended use at the reporting date.
Depreciation charge
Depreciation on PPE is provided on written down value (WDV) basis in accordance with the useful lives
specified in Schedule II to the Companies Act, 2013 on a pro-rata basis.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
The estimated useful lives used for computation of depreciation are as follows;
Computer and data Processing Units - 3 to 6 years
Office Equipments - 5 years
Furniture and fixtures - 10 years
Vehicle - 5 years
PPE is derecognised on disposal or when no future economic benefits are expected from its use. Any gain
or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the net carrying amount of the asset) is recognised in other income / netted off from any loss on disposal
in the Statement of profit and loss in the year the asset is derecognised.
I Impairment of non-financial assets
An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset
may be impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined.
If the carrying value of relevant asset is higher than the recoverable amount, the carrying value is written
down accordingly.
J Investment in subsidiaries, associates and joint ventures
Investment in subsidiaries, associates and joint ventures are recognised at cost and not adjusted to fair value
at the end of each reporting period. Cost represents amount paid for acquisition of the said investments.
Loan and other similar arrangements with subsidiaries which are probable to be settled for a fixed number
of equity share of the borrower for a fixed price are classified as equity investment.
The Company assesses at the end of each reporting period, if there are any indications that the said
investments may be impaired. If so, the Company estimates the recoverable value/amount of the investment
and provides for impairment, if any i.e. the deficit in the recoverable value over cost.
K Business Combination
A Common control business combination, involving entities or business in which all of the combining entities
or businesses are ultimately controlled by the same party or parties both before and after the business
combination and where control is not transitory, is accounted for in accordance with Appendix C to Ind AS
103 "Business Combination”.
Business combinations involving entities or business under common control are accounted for using the
pooling of interest method as follows:
a) The assets and liabilities of the combining entities are reflected at their carrying amounts.
b) No adjustments are made to reflect fair values, or recognize new assets or liabilities. Adjustments are
made only to harmonize significant accounting policies.
c) The financial information in the financial statements in respect of prior period are restated as if the
business combination had occurred from the beginning of the preceding period in the financial
statements, irrespective of the actual date of the combination.
d) The identity of the reserves are preserved and appear in the financial statements of the transferee in
same form in which they appeared in the financial statements of the transferor.
The difference, if any, between the amounts recorded as share capital issued plus any other assets and the
amount of share capital of the transferor is transferred to capital reserve and is presented separately from
other capital reserve with disclosure of its nature and purpose in the notes.
L Financial Instruments
i) Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised
immediately in Statement of profit and loss. Trade receivables are measured at transaction price.
ii) Classification of Financial Assets
On initial recognition, depending on the Company's business model for managing the financial assets
and its contractual cash flow characteristics, a financial asset is classified as measured at
- Amortised cost;
- Fair value through other comprehensive income (FVOCI);
- Fair value through profit and loss account (FVTPL) ;
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the
Company changes its business model for managing financial assets.
iii) Business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is
held at a portfolio level because this best reflects the way the business is managed and information is
provided to management.
At initial recognition of a financial asset, the Company determines whether newly recognised financial
assets are part of an existing business model or whether they reflect a new business model. The
frequency, volume and timing of sales of financial asset in prior periods, the reason for such sales and
expectations about future sales activity are important determining factors of the business model. The
Company reassess its business models each reporting period to determine whether the business models
have changed since the preceding period.
iv) Financial instruments at Amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met:
• It is held within a business model whose objective is to hold assets in order to collect contractual
cash flows.
• The contractual terms of the financial asset represent contractual cash flows that are solely payments
of principal and interest.
v) Financial instruments at Fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FTOCI only if both of the following conditions are met:
• It is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets.
• The contractual terms of the financial asset represent contractual cash flows that are solely payments
of principal and interest.
vi) Financial assets at Fair Value through Profit and Loss (FVTPL)
Any financial instrument, which does not meet the criteria for categorization as at amortized cost or as
FVOCI, is classified as at FVTPL.
vii) Equity Investments
For equity investments, the Company makes an election on an instrument-by-instrument basis to
designate equity investments as measured at FVOCI. These elected investments are measured at fair
value with gains and losses arising from changes in fair value recognised in other comprehensive income
and accumulated in the reserves.
Equity investments that are not designated as measured at FVOCI are designated as measured at FVTPL
and subsequent changes in fair value are recognised in Statement of profit and loss.
The Company accounts for its investments in subsidiaries, associates and joint ventures at cost less
accumulated impairment, if any.
viii) Subsequent measurement of financial asset
Financial assets at amortised cost are subsequently measured at amortised cost using effective interest
method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange
gains and losses and impairment are recognised in Statement of profit and loss. Any gain and loss on
derecognition is recognised in Statement of profit and loss.
For equity investments, the Company makes an election on an instrument-by-instrument basis to
designate equity investments as measured at FVOCI. These elected investments are measured at fair
value with gains and losses arising from changes in fair value recognised in other comprehensive
income and accumulated in the reserves. The cumulative gain or loss is not reclassified to Statement
of profit and loss on disposal of the investments. These investments in equity are not held for trading.
Instead, they are held for strategic purpose. Dividend income received on such equity investments are
recognised in Statement of profit and loss.
Equity investments that are not designated as measured at FVOCI are designated as measured at FVTPL
and subsequent changes in fair value are recognised in Statement of profit and loss.
Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in Statement of profit and loss.
ix) Financial liabilities and equity instruments:
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Financial liabilities are classified, at initial recognition, as financial liabilities at amortised cost or fair value
through profit or loss, as appropriate.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by Company are recognised at the proceeds
received. Transaction costs of an equity transaction are recognised as a deduction from equity.
Financial liabilities
A financial liability is classified as at FVTPL if it is classified as held-for trading or it is a derivative or
it is designated as such on initial recognition. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense are recognised in Statement of
profit and loss. Any gain or loss on derecognition is also recognised in Statement of profit and loss.
x) Derecognition
a) Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of ownership of the financial asset are transferred
or in which the Company neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance
sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the
transferred assets are not derecognised.
On derecognition of a financial asset, the difference between the carrying amount of the asset
(or the carrying amount allocated to the portion of the asset derecognised) and the sum of the
consideration received (including the value of any new asset obtained less any new liability assumed)
is transferred to statement of Profit or loss.
b) Financial liabilities
A financial liability is derecognised when the obligation in respect of the liability is discharged,
cancelled or expires. The difference between the carrying value of the financial liability and the
consideration paid is recognised in Statement of profit and loss.
xi) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet
when, and only when, the Company currently has a legally enforceable right to set off the amounts and
it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
xii) Impairment of financial assets
The Company applies expected credit losses (ECL) model for measurement and recognition of loss
allowance on the following:
> Trade receivables
> Financial assets measured at amortised cost (other than trade receivables and lease receivables)
> Financial assets measured at fair value through other comprehensive income (FVTOCI)
In case of trade receivables, the Company follows a simplified approach wherein an amount equal
to lifetime ECL is measured and recognised as loss allowance. In case of other assets, the Company
determines if there has been a significant increase in credit risk of the financial asset since initial
recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month
ECL is measured and recognised as loss allowance. However, if credit risk has increased significantly,
an amount equal to lifetime ECL is measured and recognised as loss allowance. Subsequently, if the
credit quality of the financial asset improves such that there is no longer a significant increase in credit
risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on
12-month ECL. ECL is the difference between all contractual cash flows that are due to the Company
in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash
shortfalls), discounted at the original effective interest rate.
M Inventories
Inventories of shares and securities are valued at lower of cost and net realizable value.
Cost includes cost of purchase and other costs i.e. brokerage, transactions charges etc. incurred in bringing
the inventories to their present location and condition. Cost is determined on FIFO basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.
Assessment of net realisable value is made at each subsequent reporting date. When the circumstances
that previously caused inventories to be written down below cost no longer exist or when there is clear
evidence of an increase in net realisable value because of changed economic circumstances, the amount of
the write-down is reversed.
N Borrowing Costs
Borrowing costs include interest expense calculated using the effective interest method, finance charges
in respect of assets acquired on finance lease and exchange differences arising from foreign currency
borrowings, to the extent they are regarded as an adjustment to interest costs.
Borrowing costs net of any investment income from the temporary investment of related borrowings, that
are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part
of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an
asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other
borrowing costs are recognised in profit or loss in the period in which they are incurred.
O Employee Benefits
i) Short term employee benefits
Employee benefits falling due wholly within twelve months of rendering the service are classified as
short-term employee benefits and are expensed in the period in which the employee renders the
related service. Liabilities recognised in respect of short-term employee benefits are measured at the
undiscounted amount of the benefits expected to be paid in exchange for the related service.
ii) Post-employment benefits
The Company does not operate any post employment benefit scheme as it is not liable to pay any
benefits under these plans due to the fact that the number of employees of the Company is less than
the threshold limit required under the relevant Act which makes it mandatory to pay such benefits by
the company.
P Leases
The Company as a Lessee
The Company assesses whether a contract is, or contains a lease, at inception of the contract. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: i) the contract involves the use of an identified asset, ii) the
Company has substantially all of the economic benefits from use of the asset through the period of the lease
and iii) the Company has the right to direct the use of the asset.
At the commencement date of the lease, the Company recognises a right-of-use asset and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for short-term leases (leases with a
term of twelve months or less), leases of low value assets and, for contract where the lessee and lessor has
the right to terminate a lease without permission from the other party with no more than an insignificant
penalty. The lease expense of such short-term leases, low value assets leases and cancellable leases, are
recognised as an operating expense on a straight-line basis over the term of the lease.
Q Earnings per share
Earning per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders, by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earning per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of share outstanding during the period are adjusted
for the effects of all diluted potential equity shares.
R Taxation
Tax expense comprises of current tax and deferred tax.
Current Tax
Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be
paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted
or substantively enacted, at the end of the reporting period.
Deferred tax
Deferred Income Tax assets and liabilities are recognised for all temporary differences arising between the
tax bases of assets and liabilities, and their carrying amounts in the financial statements. Deferred income tax
assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively
enacted by the Balance Sheet date. These are expected to apply in the years in which those temporary
differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income
tax assets and liabilities is recognised as income or expenses in the period that includes the enactment or
the substantive enactment date.
A Deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences and tax losses can be utilized.
The carrying amount of deferred income tax asset is reviewed at the end of each reporting period and are
reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized either in
other comprehensive income or in equity. Deferred tax items are recognized in correlation to the underlying
transaction either in OCI or directly in equity.
The Company offsets deferred tax assets and deferred tax liabilities when there is a legally enforceable right
to offset current tax assets and liabilities and when the deferred tax balance relate to the same taxation
authority. Current tax assets and liabilities are offset where the Company has a legally enforseable right to
offset and intends either to settle on a net basis or to realise the asset and and settle the liability simultaneously.
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