(A) Terms, Rights and Preferences attached to Equity Shares
Each holder of Equity Shares is entitled to one vote per share. The Shareholders have right to receive interim dividends declared by the Board of Directors and Final dividend proposed by the Board of Directors and approved by the Shareholders.
In the event of liquidation of the Company, the Shareholders will be entitled in proportion to the number of Equity Shares held by them to receive remaining assets of the Company, after distribution of all preferential amounts. However, presently there are no such preferential amounts.
The Shareholders have all other rights as available to equity Shareholders as per the provisions of the Companies Act, 2013, read together with the Memorandum and Articles of Association of the Company, as applicable.
Nature and purpose of other equity and reserves :
General Reserve: General Reserves are created out of profits and kept aside for general purpose and financial strengthening of the Company, they don't have any special purpose to fulfill and can be used for any purpose in future.
Aditya birla finance limited (Non-banking financial institution-NBFC)
Carries interest as on the reporting date at 14.30% p.a. (Previous Year12.50 % p.a.). The Term loan is secured by Equitable Mortgage of Immovable property of Associate Company and personally guaranteed by the Directors. The loan is repayable in 155 monthly installments commencing from January, 2020 and ending on January, 2033.
ICICI Bank Ltd:
Carries interest as on the reporting date at 8.50% (Previous Year 8.50%) p.a.. The Term loan is secured by Equitable Mortgage of Immovable property of Directors and personally guaranteed by the Directors. The loan is repayable in 120 monthly installments commencing from December, 2021 and ending on November, 2031.
Rate of Interest .Details of Term of Repayment of ECLGS (Emergency Credit Line Guarantee Scheme) Loans Aditya Birla Finance Limited (Non-banking financial institution-NBFC)
Carries interest as on the reporting date at 14 % p.a. (Previous Year 13 % p.a.)The ECLGS loan is secured by Equitable Mortgage of Immovable properties of Associate Company. The loan is repayable in 48 monthly installments (including 12 months principal moratorium period) commencing from October, 2020 and ending on September, 2024.
Kotak Bank
Carries interest as on the reporting date at 7.92% p.a.(Previous Year 7.92% p.a.) The loan is repayable in 48 monthly installments (including 12 months principal moratorium period) commencing from August, 2020 and ending on July, 2024. Existing Securities of vehicle loans extended to this loan.
HDFC Bank
Carries interest as on the reporting date at 8.25% p.a. (Previous Year 8.25% p.a.)The loan is repayable in 48 monthly installments (including 12 months principal moratorium period) commencing from July, 2020 and ending on June, 2024. Existing Securities of vehicle loans extended to this loan.
* (For details of Securities-Refer Note 16 herein above)
* *Rate of interest ranging from 12% to 15% and a loan of Rs. 10 crore from Non Banking Finance Company is secured against pledge of share of the company held by the Managing Director.
***(The Overdraft facility is secured by Equitable Mortgage of Immovable properties of Director.Rate of interest 8.5% p.a, Previous year 8.5% p.a.)
41 Financial risk management
The Company's activities expose it to business risk, interest rate risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance, the Company's risk management is carried out by a corporate finance team under policies approved by the board of directors and top management. Company's treasury identifies, evaluates and mitigates financial risks in close cooperation with the Company's operating units. The board provides guidance for overall risk management, as well as policies covering specific areas.
(A) Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,
iv) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.
Credit risk is managed at segment as well as Company level. For banks and financial institutions, only high rated banks/institutions are accepted.
For other financial assets, the Company assesses and manages credit risk based on internal control and credit management system. Internal credit control and management is performed on a Company basis for each class of financial instruments with different characteristics.
The company considers whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. It considers available reasonable and supportive forward-looking information. Macroeconomic information (such as regulatory changes, market interest rate or growth rates) are also considered as part of the internal credit management system. A default on a financial asset is when the counterparty fails to make payments as per contract. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
Financial assests are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.
The Company measuresthe expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates.Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered. ( Ageing of Account receivables - Refer Note 8)
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company's treasury maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the group's liquidity position (comprising the unused cash and bank balances along with liquid investments) on the basis of expected cash flows. This is generally carried out at Company level in accordance with practice and limits set by the group. These limits vary to take into account the liquidity of the market in which the Company operates.
(i) Maturities of financial liabilities
The tables below analyse the group's financial liabilities into relevant maturity groupings based on their contractual maturities for:
Amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) 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 comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk includes investment, deposits, foreign currency receivables and payables. The Company's treasury team manages the Market risk, which evaluates and exercises independent control over the entire process of market risk management.
(i) Foreign currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. As on the balance-sheet date, the Company does not have foreign currency receivables or payables and is therefore not exposed to foreign exchange risk.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.
For details of the Company's current and non current loans and borrowings, including interest rate profiles, refer to Note 16 and 20 of these financial statements.
Interest rate sensitivity
The Group is expected the interest rate fluctuations over next 12 months. The following table demonstrates the sensitivity to a 1% increase or decrease in the interest rates with all other variables held constant. The sensitivity analysis is prepared as at the reporting date.
B While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied or partially satisfied performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied or partially satisfied performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time based and event based contracts.
The aggregate value of transaction price allocated to unsatisfied or partially satisfied performance obligations is Rs.1249.64 lakhs ( Previous Year RS.1239.62) which is expected to be recognised as revenue in the next year.
44 Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The Company's Directors are identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Company's performance and allocates resources based on an analysis of various performance indicators, however the Company is primarily engaged in only one segment viz.,'Educational Services' and that all operations are in India. Hence, the Company does not have any reportable Segments as per Indian Accounting Standard 108 “Operating Segments”.
45 ( a) Legal Disputes with Cerestra Infrastructure Trust (Registered AIF with SEBI) related to Mumbai and Udaipur School properties are under settlement process. Settlement agreement was executed on 21st November, 2022 between the parties to resolve the issues therefrom within 200 days period. The Company has made detailed assessment of its impact on interest free loans given of Rs.7785.02 Lakhs, (Including Rs.7302.77 Lakhs given after Commencement of legal dispute) guarantee given of Rs.13417 Lakhs, investment made of Rs.482 Lakhs and advance against purchase of shares of Rs.1005.44 Lakhs and based on the advice given by external legal counsel, no provision/adjustment has been considered necessary by the management with respect to the above matters in these standalone financial Statements , considering the uncertainty in the matter as legal cases are yet to be withdrawal by the parties.
(b) Payments of Rs.4,93,92,000 have been made on 29th November, 2022 and Rs.5,11,52,490 on 30th November, 2022 to Cerestra Infrastructure Trust as advance against purchase of 60% and 53.97% shares of VJTF Infraschool Services (Udaipur) Pvt. Ltd. (hereinafter called as VJTF Udaipur) and VJTF Infraschool services (Mumbai) Pvt. Ltd. (hereinafter called as VJTF Mumbai), respectively. Payment of Rs.10,290,000 ,Rs.1,02,90,000,Rs.57,62,400, Rs.57,62,400 and Rs.8,23,200 to Dr.Vinay Jain , Dr.Raina Jain , Dharamchand Shah ,Bimladevi Shah ,and Preeti Sogani , respectively against purchase of shares of VJTF Infraschool Services (Udaipur) Pvt. Ltd.
(c) The Board of the holding compnay, in their meeting held on 16th January, 2023, has approved the purchase of 100% shareholding in VJTF Udaipur and balance 53.97% shareholding in VJTF Mumbai.
46 The Board of the holding compnay, in their meeting held on 14th April, 2023, has approved the purchase of more than 51% shareholding of Happymongo Learning Solutions Private Limited at Rs 7.91 Crores.
47 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 31st March, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from 1st April, 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 Group 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 statementsthat 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 Group 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 Group does not expectthis amendment to have any significant impact in its financial statements.
49 The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date
50 The Company has not revalued its Property, Plant and Equipment .
51 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company.
52 The Company is not declared wilful defaulter by any bank or financial Institution or other lender.
53 The Company is not involve in any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956
54 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) 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;
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
55 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:
(a) 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;
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
56 The Company does not have any such transaction which has not been recorded in the books of accounts 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 Tax Act, 1961).
57 CSR Expenditure include expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs. Nil Lakh (Previous Year Rs. Nil Lakh).
Gross amount required to be spent as per aforesaid provision is Rs. Nil Lakh (Previous Year Rs. Nil Lakh)
58 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period except for Satisfaction of charge which is yet to be registered with Registrar of Companies (ROC) in respect of bus loan of Rs.78.99 lakhs sanctioned by Kotak Bank Limited. Charge of this loan is not satisfied with ROC as the Company has not received No Objection Certificate from kotak Bank Limited.
59 The Company has not traded or invested in any Crypto currency or Virtual Currency during the financial year.
60 There is no interest paid during the year and no principle and interest is outstanding to Micro, Small and Medium Enterprises as on Balance sheet date.
61 The accounts of certain trade receivables, trade payables, loans and advances and banks are, however, subject to formal confirmations or reconciliations and consequent adjustments, if any. However, there is no indication of dispute on these accounts, other than those mentioned in the financial statements. The management does not expect any material difference affecting the current year's financial statements on such reconciliation/adjustments.
62 The Company (Artheon Finance Limited) was registered as Non-Banking Financial Institution (NBFC) under Reserve Bank of India Act, 1034 vide Registration No. 13.00998 dated 5th September, 1998 as nonaccepting deposit NBFC. The Company had never accepted any deposits from the public during its tenure of business of NBFC.
The Board of Directors in its meeting held on 5th March, 2013 decided not to carry any activity which falls under the criteria of NBFC for which registration with RBI is required. The Management decided to venture in to the education sector and merged Vinay Jain's Training Forum Pvt. Ltd. with itself (appointed date being 1st April, 2011). The Company vide letter dated 30.05.2013 had submitted to the Department of NonBanking Supervision, Mumbai Regional Office, Reserve Bank of India an application for voluntary surrender of Certificate of Registration no. 13.00998 held as in the name of Artheon Finance Company. Subsequently, the company vide its letter dated 4th February, 2019 has surrendered Original Certificate of Registration as NBFC to The Department of Non-Banking Supervision, Reserve Bank of India.
As the company is not falling under NBFC category, the Company has not furnished any statements with RBI for the same. The Company is regularly following up with RBI towards cancellation of the NBFC licence for which their confirmation / approval is still awaited.
63 Previous years' figures have been re-grouped / re-arranged wherever necessary so as to make them comparable with those of the current year.
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