#Represent loans given to two subsidiaries on account of working capital loan ' 293.88 lakhs to Nir Advisors Private limited bearing fixed interest at the rate 12% per annum and ' 29.5 lakhs interest free working capital loan to Boutonniere Hospitality Private Limited.
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of ' 1 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.
No shares were alloted as fully paid up by way of bonus issue and/or brought back in the current reporting year and in last five years immediately preceding the current reporting year.
During the year, the Company has issued 1,39,28,226 equity shares of ' 1/- each, fully paid-up at a premium of ' 8.5 per share, Out of this 60,33,491 equity shares issued consequent to and as part of the acquisition of Boutonniere Hospitality Private Limited (BHPL) on 05 November 2022 and 78,94,737 equity shares issued to Mahakram Developers Private Limited for cash consideration as preferential allotment.
General reserve
The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders.
Securities premium
Securities premium is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Companies Act, 2013.
Retained earnings
Retained earnings represents surplus in the statement of profit and loss.
Terms/Rights attached to Preference Shares
During the current year, the Company issued 3,32,91,901 10% Redeemable Non-Convertible NonCumulative Preference Shares of ' 1/- each, fully paid-up at a premium of ' 8.5 per share to parties mentioned below. The Preference Shares were redeemable at the end of 5 years from the date of issue at a price of ' 14.5 per share. On 28 February 2023, With the consent of the preference share holder, the period of redemption was extended by 1 years from November 2027 to November 2028. Due to this, Company has recorded gain on modification of non current financial liabities amouting to ' 260.77 lakhs.
Terms and Conditions
*From Birbal Advisory Private Limited of ' 250 lakhs bearing fixed interest at the rate 9% per annum. The working capital loan is payable on demand.
*From Mahakaram Devlopers Private Limited of ' 14 lakhs bearing fixed interest at the rate 10% per annum. The working capital loan is payable on demand.
‘During the current year, the Company has acquired 100% shareholding in Acquisition of NIR Advisors Private Limited for a consideration of ' 11 lakhs and on 14 February 2023, the Company sold the investment of equity shares in NIR Advisory Private Limited for a consideration of ' 11 lakhs.
“The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year-end are unsecured and interest free. The settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.”
27. Employee benefits obligation- Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of continuous service gets a gratuity on departure at fifteen day salary (last drawn salary) for each completed year of service in terms of the provisions of the Payments of Gratuity Act, 1972. The Company provides for liability in its books of accounts based on actuarial valuation.
‘Investment in subsidiaries are measured at cost as per Ind AS 27, ‘Separate financial statements’ and hence, not presented here.
** Since the borrowings were taken in the current year itself and interest rates have not significantly changed. Hence, amortised cost represent fair value of long term borrowings.
(ii) Fair Value hierarchy
Financial assets and financial liabilities measured at fair value in the balance sheet are divided into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Valuation techniques used to determine fair value
The fair value of the financial instruments are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants. The following methods were used to estimate the fair values:-- Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments.
b. Fair value of financial assets and liabilities measured at amortised cost:
The carrying amounts of trade receivables, trade payables, cash and cash equivalents, other bank balances, other current financials assets and liabilities are considered to be the same as their fair values, due to their short-term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
29. Financial risk management
The Company's activities expose it to market risk, liquidity risk and credit risk. The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
(a) Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. The Company's maximum exposure to credit risk is limited to the carrying amount of following types of financial assets. - cash and cash equivalents, - trade receivables, - loans and receivables carried at amortised cost, and- deposits with banks
Credit risk on cash and cash equivalents and other financial assets is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. The loans primarily represents loan given to related parties. Other financial assets measured at amortized cost includes others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.
The exposure to the credit risk at the reporting date is primarily from trade receivables.Trade receivables are typically unsecured and are derived from revenue earned from Sale of service located in India. The Company does monitor the economic environment in which it operates. The Company manages its credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business.
The Company closely monitors the credit-worthiness of the receivables through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company uses a simplified approach for the purpose of computation of expected credit loss for trade receivables where specific allowance is made by assessing party wise outstanding receivables based on review of payment default and communication between sales team and customers.
(b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
Maturity of financial liabilities:
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.
(c) Market risk - Interest rate risk
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. At the reporting periods end, the Company is not exposed to changes in market interest as it does not have any variable interest rate borrowings.
30. Capital management
The Company's objectives when managing capital are to:
- To ensure Company's ability to continue as a going concern, and
- To provide adequate return to shareholders
The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
31. Revenue from contracts from customers
Indian Accounting Standard 115 Revenue from Contracts with Customers (“Ind AS 115”), establishes a framework for determining whether, how much and when revenue is recognised and requires disclosures about the nature, amount, timingand uncertainty of revenues and cash flows arising from customer contracts. Under Ind AS 115, revenue is recognised through a 5-step approach:
(i) Identify the contract(s) with customer;
(ii) Identify separate performance obligations in the contract;
(iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations; and (v) Recognise revenue when a performance obligation is satisfied.
(a) Disaggregation of revenue
The Company has performed a disaggregated analysis of revenues considering the nature, amount, timing and uncertainty of revenues. This includes disclosure of revenues by geography and timing of recognition.
(d) Revenue recognised in relation to contract liabilities
Ind AS 115 also requires disclosure of ‘revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period' and ‘revenue recognised in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods, but there is no contract liability balance at the beginnning of the period so there is no revenue recognised during the year.
Capital employed refers to total shareholders' equity and debt.
Average = (Opening Closing)/2
33. Additional regulatory information not disclosed elsewhere in the standalone financials statements
(a) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(b) The Company has no borrowings from banks and financial institutions on the basis of security of current assets.
(c) The Company has not been declared willful defaulter by any bank or financial institution or other lender.
(d) The Company does not have any transactions with struck off companies.
(e) The Company has complied with the number of layers of companies prescribed under the Companies Act, 2013.
(f) The Company has entered into any scheme of arrangement which has an accounting impact in current financial year.
(g) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.
(h) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries'), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.
(i) No funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties'), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(j) The Company does not have any transactions which is not recorded in the books of accounts but 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)
(k) There are no debts / loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or amounts due by firms or private companies respectively in which any director is a partner or a director or a member other than those disclosed in Note 7.
(l) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(m) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
34. Corporate Social Responsibility
Section 135 of the Companies Act, 2013 (the Act), requires the Board of Directors of every company having a net worth of ' 500 crores or more, or turnover of ' 1,000 cores or more or a net profit of ' 5 crores or more, during any financial year, to ensure that the Company spends in every financial year at least 2% of the average net profits of the Company made during the three immediately preceding financial years on Corporate Social Responsibility (CSR) in pursuance of its policy in this regard. The Act requires such companies to constitute a Corporate Social Responsibility Committee which shall formulate and recommend to the Board a Corporate Social Responsibility Policy which shall indicate the CSR activities to be undertaken by the Company as specified in Schedule VII to the Act. In view of the aforesaid requirement since the Company does not meet any of the above mentioned criteria during the immediately preceding financial years and hence there is no requirement of such expenditure for year ended 31 March 2023.
35. The Company's primary business segment is reflected based on principal business activities carried on by the Company i.e. providing Advisory and Consultancy Services and all other related activities which as per Ind AS 108 on ‘Operating Segments' is considered to be the only reportable business segment. The Company primarily operates in India which is considered as a single geographical segment.
36. The figures of the corresponding previous year have been regrouped wherever considered necessary to correspond to current year disclosures.The impact of such reclassification/regrouping is not material to the financial statements
37. No subsequent event occurred post balance sheet date which requires adjustment in the financial statements for the period ended 31 March 2023.
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