l) Provisions, contingent assets and contingent liabilities
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:
• Possible obligations which will be confirmed only by future events not wholly within the control of the
Company or
• 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 neither recognised nor disclosed except when realisation of income is virtually certain, a
related asset is disclosed.
m) Financial instruments
A Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs.
Subsequent measurement of financial assets and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement
i. Financial assets carried at amortised cost -
A financial asset is measured at the amortised cost if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in interest income in the Statement of Profit and Loss.
ii. Investments in equity instruments -
Investments in equity instruments which are held for trading are classified as at fair value through profit or
loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial
recognition, on an instrument-by-instrument basis, to classify the same either as at fair value through other
comprehensive income (FVOCI) or fair value through profit or loss (FVTPL). Amounts presented in other
comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the
cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless
the dividend clearly represents a recovery of part of the cost of the investment.
iii. Investments in mutual funds -
Investments in mutual funds, if any, are measured at fair value through profit and loss (FVTPL).
iv. Financial guarantee contracts:
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with
the terms of a debt instrument.
Financial guarantee contracts issued by a Company are initially measured at their fair values and, if not
designated as at FVTPL, are subsequently measured at the higher of:
-the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109 -
Financial Instruments; and
- the amount initially recognised less, when appropriate, the cumulative amount of income recognised in
accordance with the principles of Ind AS 18 - Revenue.
De-recognition of financial assets
Financial assets (or where applicable, a part of financial asset or part of a group of similar financial assets) are
derecognized (i.e. removed from the Company’s balance sheet) when the contractual rights to receive the cash
flows from the financial asset have expired, or when the financial asset and substantially all the risks and
rewards are transferred. Further, if the Company has not retained control, it shall also de-recognise the
financial assets and recognise separately as assets or liabilities any rights and obligations created or retained in
the transfer.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using
the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or
expired. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realize the assets and settle the liabilities simultaneously.
n) Earnings per share
Basic earnings per share are 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 (interest and other finance cost
associated) 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.
o) Segment reporting
The Company identifies the segment basis of the internal organization and management structure. The
operating segments are the segments for which separate financial information is available and for which
operating profit/loss amounts are regularly reviewed by the management and in assessing performance. The
accounting policies adopted for segment reporting are in line with the accounting policies of the Company.
Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments
on the basis of their relationship with the operating activities of the segment.
p) Dividend/ Distribution
Dividend distribution to the company shareholders is recognised as a liability in the financial statements in the
period in which the dividend is approved by the company shareholders.
q) Significant management judgement in applying accounting policies and estimation uncertainty
The preparation of the Company’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the related
disclosures. Actual results may differ from these estimates.
Significant management judgements
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the
future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external
and internal factors which could result in deterioration of recoverable amount of the assets.
Expected credit loss (‘ECL’)
The measurement of expected credit loss allowance for financial assets measured at amortised cost requires
use of complex models and significant assumptions about future economic conditions and credit behavior
(e.g. likelihood of customers defaulting and resulting losses). The Company makes significant judgements
with regard to the following while assessing expected credit loss:
• Determining criteria for significant increase in credit risk;
• Establishing the number and relative weightings of forward-looking scenarios for each type of
product/market and the associated ECL; and
• Establishing groups of similar financial assets for the purposes of measuring ECL.
Provisions
At each balance sheet date basis, the management judgment, changes in facts and legal aspects, the Company
assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual
future outcome may be different from this judgement.
Significant estimates
Useful lives of depreciable/amortisable assets
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date,
based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic
obsolescence that may change the utility of assets.
Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active
market quotes are not available). This involves developing estimates and assumptions consistent with how
market participants would price the instrument.
Other Equity
Description of the nature and purpose of Other Equity :
Capital Reserve
Capital reserve is the excess of net assets taken over cost of consideration paid during amalgamation.
Statutory Reserve
Statutory reserve represents reserve fund created pursuant to Section 45-IC of the RBI Act, 1934 through transfer of specified percentage (20%) of net
profit every year before any dividend is declared. The reserve fund can be utilised only for limited purposes as specified by RBI from time to time and
every such utilisation shall be reported to the RBI within specified period of time from the date of such utilisation.
Retained Earnings
Retained earnings or accumulated surplus represents total of all profits retained since Company’s inception. Retained earnings are credited with current
year profits, reduced by losses, if any, dividend payouts, transfers to General reserve or any such other appropriations to specific reserves.
Equity instruments through other comprehensive income
This represents the cumulative gains and losses arising on the fair valuation of equity instruments measured at fair value through other comprehensive
income.
28 Capital Management
The Company’s capital management objectives are
- to ensure the Company’s ability to continue as a going concern
- to comply with externally imposed capital requirement and maintain strong credit ratings
- to provide an adequate return to shareholders
Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding
excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the
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, issue new shares, or sell assets to reduce debt.
ii) Commitments
The company has not been any commitments during the year.
31 FINANCIAL RISK MANAGEMENT FRAMEWORK
The Company has exposure to the following risks arising from financial instruments: • Credit risk • Liquidity risk; and • Market risk
• Credit Risk
Credit risk is the risk of financial loss to the company if a counter-party fails to meet its contractual obligations. The Company has adopted
a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. The Company's
exposure to financial loss from defaults are continuously monitored.
• Liquidity Risk:
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its
liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
• Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and
prices (such as equity price, interest rates etc.) or in the price of market risk-sensitive instruments as a result of such adverse changes in
market rates and prices. The Company is exposed to market risk primarily related to the market value of its investments and cash credit
facities
a) Interest Rate Risk :
The company's policy is to minimise interest rate cash flow risk exposures on long-term financing as at March 31, 2024, the company is
exposed to changes in market interest rates through overdraft facilties.
b) Currency Risk:
Currently company does not have transaction in foreign currencies and hence the company is not exposed to currency risk.
c) Price Risk:
The Company is exposed to equity price risk arising from investments held by the Company and classified in the balance sheet either as
fair value through OCI or fair value through profit and loss.
I) Certain ratios/ line items marked with remark "N/A" are not applicable since the Company is a NBFC registered with RBI
ii) Debt Equity Ratio = [ Debt Securities Borrowings (Other than Debt Securities) Deposits Subordinated Liabilities]/[Equity
Share Capital Other Equity
iii) Net Worth = [Equity Share Capital Other Equity]
iv) Total debts to total Assets = [ Debt Securities Borrowings (Other than Debt Securities) Deposits Subordinated Liabilities]/
Total Assets
v) Net Profit Margin (%) = Profit After Tax / Total Income
vi) Capital Adequacy Ratio has been computed as per RBI guidelines
vii) Gross NPA Ratio = Gross Stage 3 loans / Gross Loans
viii) Net NPA Ratio = Net Stage 3 Loans / (Gross loans - ECL on stage 3 loans) where Net stage 3 loan = Gross Stage 3 loans - ECL on
stage 3 loans
ix) NPA Provision Coverage Ratio = ECL on Stage 3 loans / Gross stage 3 loans
x) Liquidity Coverage Ratio has been computed as per RBI guidelines
xi) NPA = Non Performing Assets
39 Public Deposits
The company has not accepted any public deposits within the meaning of Section 45 I(bb) of RBI Act, 1934 during the year in question & the company
has also passed resolution for non- acceptance of any public deposits.
40 Brokerage
Since the company has not accepted any public deposits the question of brokerage does not arise.
41 The company has complied with the prudential norms on income recognition accounting standards assets clarification & provisioning for bad & doubtful
debts as applicable to it & specified in the directions issued by the RBI on the NBFC prudential Norms (Reserve Bank) Directions, 1909.
42 All the assets are Standard Assets, accordingly Contingent Provision for Standard Assets are provided @ 0.25% as per the Master Circular No DNBS.
(PD). CC.No 279/03.02.001/2012-13 dated July 2,2012 (Revised).
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
vi) 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
vii) 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 Group 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,
48 NBFC Registrations
The company is having a valid certificate of registration No 05.00509 dated 2nd March, 1998 issued by the RBI under Section 45 IA of the Reserve Bank
of India Act,1934.
49 Previous year figures have been regrouped / reclassified, where necessary, to confirm to the current years’ classification.
50 Schedule to the Balance Sheet of a non- deposit taking Non -Banking Financial Company (as required in terms of Paragraph 13 of Non - Systematically
Important Non-Banking Financial (Non - Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Direction, 2016 issued vide
Notification No. DNBR. PD.007 /03.10.119 /2016-17 are attached, under separate Annexure - 1.
As per our report attached of even date
Signature to Notes 1 to 50
For S K Naredi & Co For and on behalf of the Board
Chartered Accountants For J.A. Finance Ltd.
ICAI Firm Regn. No. 003333C (CIN: L65999WB1993PLC058703)
(Anand Harnathka) (Akshay Goyal) (Dilip Kumar Goyal)
Partner Managing Director Director
M. No. 401726 (DIN - 00201393) (DIN - 00033590)
(Raju Patro) (Megha Goyal)
Jamshedpur, India. Company Secretary Chief Financial Officer
May 29, 2024_(M.No - 37271)_(PAN- BGUPA5324E)
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