2.05 Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of
resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. If the effect of
time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When
discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the
amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of
resources embodying economic benefits is remote, no provision or disclosure is made.
2.06 Cash and Cash Equivalents
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the
original maturity is three months or less and other short term highly liquid investments.
2.07 Employee Benefits
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the
period in which the employee renders the related service. The Company recognizes the undiscounted amount of short-term employee benefits expected to be
paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
2 Significant accounting policies (cont'd)
2.08 Borrowing Cost
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising
from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs, if any, directly attributable to the
acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized, if
any. All other borrowing costs are expensed in the period in which they occur.
2.09 Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is
adjusted within the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.
2.10 Property, plant & equipment
Measurement at recognition
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property,
plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses.
The cost of an item of property, plant and equipment comprises of its purchase price including import duties and other non-refundable purchase taxes or levies,
directly attributable cost of bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration and similar
liabilities, if any. Any trade discounts and rebates are deducted in arriving at the purchase price. Cost includes cost of replacing a part of a plant and equipment if
the recognition criteria are met. Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and
equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and
Loss as and when incurred.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.
2 Significant accounting policies (cont'd)
2.10 Property, plant & equipment (cont'd)
Capital work-in-progress and capital advances:
Cost of assets not ready for intended use, as on the balance sheet date, is shown as capital work-in-progress. Advances given towards acquisition of fixed assets
outstanding at each balance sheet date are disclosed as other non-financial assets.
Depreciation
Depreciation on each part of an item of property, plant and equipment is provided using the written down value method based on the useful life of the asset as
prescribed in Schedule II to the Act. Depreciation is calculated on a pro-rata basis from the date of installation till date the assets are sold or disposed.
Leasehold improvements are amortised over the underlying lease term on a straight line basis. Individual assets costing less than INR 5,000 are depreciated in
full in the year of acquisition.
De-recognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or
disposal. The gain or loss arising from the de-recognition of an item of property, plant and equipment is measured as the difference between the net disposal
proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
2.11 Impairment of non—financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Company estimates the assef s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash¬
generating unif s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other available fair value indicators.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment
losses no longer exist or have decreased. If such indication exists, the Company estimates the assef s or CGU’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the assef s recoverable amount since the last impairment loss
was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the
statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
2.12 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the
weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period is
adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss 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.
24 Financial risk management
The Company is a Non - Banking Financial Company - Non Deposit taking - Non - Systemically Important (NBFC - ND - NSI) registered with the Reserve Bank of
India. On account of it’s business activities it is exposed to various financial risks associated with financials products such as credit or default risk, market risk, interest
rate risk, liquidity risk and inflationary risk. However, the Company has a robust financial risk management system in place to identify, evaluate, manage and mitigate
various risks associated with its financial products to ensure that desired financial objectives are met. The Company’s senior management is responsible for establishing
and monitoring the risk management framework within its overall risk management objectives and strategies, as approved by the Board of Directors. Such risk
management strategies and objectives are established to identify and analyse potential risks faced by the Company, set and monitor appropriate risk limits and controls,
periodically review the changes in market conditions and assess risk management performance. Any change in Company’s risk management objectives and policies needs
prior approval of it’s Board of Directors.
(a) Credit risk
This risk is common to all investors who invest in bonds and debt instruments and it refers to a situation where a particular bond issuer is unable to make the expected
principal payments, interest rate payments, or both. Similarly, a lender bears the risk that the borrower may default in the payment of contractual interest or principal on
its debt obligations, or both. The entity continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk
controls.
(b) Market risk:
Market risk is a form of systematic risk associated with the day-to-day fluctuation in the market prices of shares and securities and such market risk affects all securities
and investors in the same manner. These daily price fluctuations follows its own broad trends and cycles and are more news and transaction driven rather than
fundamentals and many a times, it may affect the returns from an investment. Market risks majorly comprises of two types - interest rate risk and other price risk, such
as equity price risk and commodity risk. Financial instruments affected by market risks include borrowings and investments.
(c) Liquidity risk:
Liquidity refers to the readiness of the Company to sell and realise its financial assets. Liquidity risk is one of the most critical risk factors for Companies which is into
the business of investments in shares and securities. It is the risk of not being able to realise the true price of a financial asset, or is not being able to sell the financial
asset at all because of non-availability of buyers. Unwillingness to lend or restricted lending by Banks and Financial Institutions may also lead to liquidity concerns for
the entities.
The Company maintains a well-diversified portfolio of investments in shares and securities which are saleable at any given point of time. A dedicated team of market
experts are monitoring the markets on a continuous basis, which advises the management for timely purchase or sale of securities. The Company is currently having a
mix of both short-term and long-term investments. The management ensures to manage it’s cash flows and asset liability patterns to ensure that the financial obligations
are satisfied in timely manner.
(d) Inflationary risk:
Inflationary or purchasing power risk refers to the variation in investor returns caused by inflation. It is the risk that results in increase of the prices of goods and
services which results in decrease of purchasing power of money, and likely negatively impact the value of investments. The two important sources of inflation are rising
costs of production and excess demand for goods and services in relation to their supply. Inflation and interest rate risks are closely related as interest rates generally go
up with inflation.
The Company closely monitors the inflation data and analyses the reasons for wide fluctuations thereof and its effect on various sectors and businesses. The main
objective is to avoid inflationary risk and accordingly invest in securities and debt instruments that provides higher returns as compared to the inflation in long-term.
25 Capital management
For the purpose of Company’s capital management, capital includes issued equity share capital, other equity reserves and borrowed capital less cash and cash equivalents.
The primary objective of capital management is to maintain an efficient capital structure to reduce the cost of capital, support corporate expansion strategies and to
maximize shareholder’s value.
The entity manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain
or adjust the capital structure, the entity may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The entity monitors capital
using a gearing ratio, which is net debt divided by total capital plus net debt. The entity’s policy is to keep an optimum gearing ratio. The entity includes within net debt,
interest bearing loans and borrowings less cash and cash equivalents.
30 The disclosure on the following matters required under Schedule III as amended not being relevant or applicable in case of the Company:
a) The Company has not traded or invested in crypto currency or virtual currency during the financial year
b) The Company is not holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
c) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority
d) The Company has not entered into any scheme of arrangement.
e) No satisfaction of charges are pending to be filed with ROC.
f) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments
under the Income Tax Act, 1961.
31 The financial statements are approved for issue by the Board of Directors in its meeting held on 29th May 2024.
For H S K & CO LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm’s Reg. No. : 117014W/W100685
Sudhir S, Shah Shekh Hasina Kasambhai Irfan Ahmedbhai Belim
Partner Director Director
Membership No. 115947 (DIN: 07733184) (DIN: 08010290)
Place: Ahmedabad Place: Kolkata Place: Kolkata
Date: 29 May 2024
Anny Sachdev Shankarlal Siddharth Sharma
Chief Financial Officer Company Secretary
Place: Kolkata Place: Kolkata
Date: 29 May 2024
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