2.17 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
a) A provision is recognised when the Company has a present obligation as a result of a past event and it is probable
that an outflow of embodying economic benefits will be required to settle the obligation and there is a reliable estimate
of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle
the present obligation at the Balance sheet date. Provisions are determined by discounting the expected future cash
flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet
date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
liability. Provisions are reviewed at each balance sheet date and adjusted to effect current management estimates.
b) Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity
or a present obligation that arises from past events but is not recognised because it is not probable that an outflow
of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation
cannot be measured with sufficient reliability. Contingent liabilities are not recognised but are disclosed in the notes.
Contingent liabilities are recognised when there is possible obligation arising from past events.
c) A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The
company does not have any contingent assets in the financial statements. Contingent assets are neither recognised
nor disclosed in the financial statements.
2.18 CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of
a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular
revenue generating, investing and financing activities of the Company are segregated.
2.19 BORROWING COST
Borrowing cost includes interest, amoritsation 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 capitalised, if any. All other
borrowing costs are expensed in the period in which they occur.
2.20 GOODS AND SERVICES TAX PAID ON ACQUISITION OF ASSETS OR ON INCURRING EXPENSES
Expenses and assets are recognised net of the goods and services tax paid, except when the tax incurred on a purchase
of assets or services is not recoverable from the tax authority, in which case, the tax paid is recognised as part of the cost
of acquisition of the asset or as part of the expense item, as applicable.
The net amount of tax recoverable from, or payable to, the tax authority is included as part of receivables or payables,
respectively, in the balance sheet.
2.21 STANDARDS ISSUED AND EFFECTIVE
Ministry of Corporate Affairs (“MCA”) had notified the Companies (Indian Accounting Standards) Amendment Rules, 2023
dated 31 March, 2023 to amend the following Ind AS which were effective from 01 April, 2023. However, these amendments
does not have an impact on Financial Statements and material accounting policy information.
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material
accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is
annual periods beginning on or after 01 April, 2023. The Company has evaluated the amendment and the impact of the
amendment is insignificant in the Company’s financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a
definition of accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting
policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning
on or after 01 April, 2023. The Company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does
not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this
amendment is annual periods beginning on or after 01 April, 2023. The Company has evaluated the amendment and there
is no impact on its financial statement.
2.22 STANDARDS NOTIFIED BUT NOT YET EFFECTIVE
There are no standards that are notified and not yet effective as on the date.
Depreciation and Amortisation
Depreciation and amortisation is provided using straight-line method over the useful life of assets assuming no residual value at
the end of useful life of the asset.
Depreciation and amortisation on addition to assets and assets sold during the year is being provided from/up to the month in
which such asset is added or sold as the case may be.
Useful lives of assets are determined by the Management by an internal technical assessment except where such assessment
suggests a life significantly different from those prescribed by Schedule II of the Companies Act, 2013 where the useful life is as
assessed and certified by a technical expert.
No interest was paid during the year / previous year in terms of Section 16 of the Micro, Small and Medium Enterprises Development
Act, 2006 and no amount was paid to the supplier beyond the appointed day. No amount of interest is due and payable for the
year of delay in making payment but without adding the interest specified under the Micro, Small and Medium Enterprises
Development Act, 2006.
INR Nil (previous year INR Nil) interest was accrued and unpaid at the end of the accounting year. No further interest remaining
due and payable even in the succeeding years for the purpose of disallowance of a deductible expenditure under Section 23 of
the Micro, Small and Medium Enterprises Development Act, 2006.
The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been
identified on the basis of information available with the Company.
Note 37 Fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal
(or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of
whether that price is directly observable or estimated using a valuation technique.
The Company has determined that the carrying values of cash and cash equivalents, bank balances, trade receivables, short term
loans, floating rate loans, investments in equity instruments designated at FVOCI, trade payables, short term debts, borrowings,
bank overdrafts and other current liabilities are a reasonable approximation of their fair value and hence their carrying value are
deemed to be fair value.
Fair value hierarchy
The Company determines fair values of its financial instruments according to the following hierarchy:
Level 1: valuation based on quoted market price: financial instruments with quoted prices for identical instruments in active
markets that the Company can access at the measurement date.
Level 2: valuation based on using observable inputs: financial instruments with quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models
where all significant inputs are observable.
Level 3: valuation technique with significant unobservable inputs:- financial instruments valued using valuation techniques where
one or more significant inputs are unobservable. Equity investments designated under FVOCI has been valued using discounted
cash flow method.
Note- 38 Risk management
A) Liquidity and funding risk
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established Asset and
Liability Management Committee (ALCO) for the management of the Company’s short, medium and long term funding
and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities. The Company also has Inter corporate deposits line available from holding
company & fellow subsidiary companies within its group to meet any short term fund requirements.
B) Market risk
Market risk is the risk that the fair value of future cash flow of financial instruments will fluctuate due to changes in the
market variables such as interest rates, foreign exchange rates and equity prices. The Company do not have any exposure
to foreign exchange rate and equity price risk.
C) Interest rate risk
The Company uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day to- day operations.
Further, certain interest bearing liabilities carry variable interest rates.
The sensitivity analyses below have been determined based on exposure to financial instruments at the end of the reporting
year. For floating rate liabilities, analysis is prepared assuming the amount of liability outstanding at the end of the reporting
year was outstanding for the whole year. The following table demonstrates the sensitivity to a reasonably possible change
in interest rates on that portion of loans and borrowings affected.With all other variables held constant, the Company’s profit
before tax is affected through the impact on floating rate borrowings, as follows:
D) Credit risk
Credit risk is the risk of financial loss the Company may face due to current/potential inability or unwillingness of a customer
or counterparty to meet financial/contractual obligations. Credit risk also covers the possibility of losses associated with
diminution in the credit quality of counterparties. Inadequate collateral may also lead to financial losses in the event of
default. The company has adopted a policy of dealing with creditworthy counterparties and obtain sufficient collateral, where
appropriate, as a means of mitigating the risk of financial loss from defaults.
The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial
instruments presented in the financial statements.
Since the company is into retail lending business, there is no significant credit risk of any individual customer that may impact
company adversely, and hence the Company has calculated its ECL allowances on a collective basis.The Company’s major
classes of financial assets are cash and cash equivalents, loans, term deposits, trade receivables and security deposits.
The nature of loan products across broad categories are either unsecured or secured by collateral. Although collateral is an
important risk mitigant of credit risk, the Company’s practice is to lend on the basis of assessment of the customer’s ability
to repay rather than placing primary reliance on collateral. Based on the nature of product and the Company’s assessment
of the customer’s credit risk, a loan may be offered with suitable collateral. Depending on its form, collateral can have a
significant financial effect in mitigating the Company’s credit risk.The Company periodically monitors the market value of
collateral and evaluates its exposure and loan to value metrics for high risk customers.
E) Impairment Assessment
The Company is mainly engaged in the business of providing gold loans, consumer loans and unsecured personal loans
to salaries individuals, traders and self-employed. The tenure of the personal loans generally ranges from 9 months to 18
months.
F) Classification of financial assets under various stages
The Company considers a financial instrument as defaulted and therefore Stage 3 (credit-impaired) for Expected Credit
Loss (ECL) calculations in all cases when the borrower becomes more than 180 days past due on its contractual payments.
It is company’s policy to assess loss allowance calculations ( ECL ) in all cases where borrower becomes 90 days past due
on its contractual payment. The Company classifies its financial assets other than trade receivables in three stages having
the following characteristics:
Note- 39 Other Information & Events after reporting date
During the current year ended 31 March 2025, the Company has earned a net Profit of ' 66.29 Lakhs and has an accumulated
deficit of ' 1,572.04 Lakhs. However, based on the projected operations and the Company’s marketing efforts, the Company
expects to generate adequate surplus in the future and consequently does not foresee any difficulty in settling its liabilities as and
when they arise or continue as a going concern.
The company, in addition to its advisory services of Trade Finance, has successfully managed to scale its digital platform for
priority sector loans. These online loans are provided to prime customers not having access to mainstream banking products with
the objective of furthering financial inclusion and bridging the digital divide. The business has demonstrated significant traction
growing from Assets Under Management (AUM) of ' 2,698.70 Lakhs as on March 2024 to ' 3,328.74 Lakhs as on March 2025.
The number of loans disbursed in FY 2025 was 12,125 compared to 7,529 loans in FY 2024.
This online lending platform holds tremendous growth potential. The company is in the process of raising additional debt and
equity capital including Rights/Preferential issue etc. for financing the growth opportunity. The financial statements have been
prepared on a going concern basis and the assets and liabilities have been recorded in the financial statements on the basis that
the Company will be able to realise its assets and discharge its liabilities in the normal course of the business.
Note- 41 Employee Stock Option Plan
Pursuant to approval of the members at the Annual General meeting held on 27th September, 2019, the company adopted the “
Employees Stock Option Plan 2019 (ESOP 2019). As per the said plan, the Company granted 24,99,728 equity shares of Rs.10
each on 10th December, 2019.
The vesting period is over five years from the date of grant, commencing after one year from the date of grant.
Excersise period would commence one year from the date of grant, commencing after one year from the date of grant.
The options will be settled in equity shares of the company.
The Exercise price of the Vested Option shall be higher of (a) the market price of the shares or (b) the face value of the share.
Consequently no compensation cost has been recogonised by the Company in accordance with the Guidance Note on “Accounting
for Employee share based payments “ issued by the Institute of Chartered Accountants of India”.
The Nomination and Remuneration Committee of the Company has approved the following grants to select senior level executives
of the Company and its subsidiaries in accordance with the Stock Option Scheme. Details of grants given up to the reporting date
under the scheme, duly adjusted for sub-division of shares and issue of bonus shares thereon, are given as under:
Note- 42
As at the year ended 31 March 2025, the Company has an accumulated deficit of ' 1572.04 Lakhs. However, based on the
projected operations and the Company’s marketing efforts, the Company expects to generate adequate surplus in the future and
consequently does not foresee any difficulty in settling its liabilities as and when they arise or continue as a going concern.
Note- 43 Ultimate Beneficiary
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (‘Intermediaries’), with the
understanding, whether recorded in writing or otherwise, that the Intermediaries shall, 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 provide any
guarantee, security or the like on behalf of the ultimate beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘Funding Parties’), with
the understanding, whether recorded in writing or otherwise, that the Company shall,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.
Note- 44 Disclosure pertaining to stock statement filed with banks or financial institutions
The Company has availed of the facilities (secured borrowings) from the lenders inter alia on the condition that, the Company
shall provide or create or arrange to provide or have created, security interest by way of a first pari passu charge of the loans.
Security interest is created by charge creation towards security and debenture trustee on behalf of security holders and debenture
holders. For the financial year ended 31 March 2025 and previous year ended 31 March 2024, the Monthly statements filed by
the Company with banks are in agreement with books of accounts.
Note- 45 Note to Accounts - Change in Accounting Policy and Retrospective Application
During the year ended March 31,2025, the Company revised its accounting policy for measuring investment in subsidiaries and
associates from cost to fair value through profit or loss (FVTPL), in accordance with Ind AS 109. This change was made to better
reflect the economic substance of the underlying transactions. The change is in compliance with Ind AS 8.
Previously, these financial instruments were measured at cost. As of March 31, 2025, the Company has recognized unrealised
gains amounting to I NR 533.85 lacs under fair valuation through profit or loss. The change in policy has been applied retrospectively
in accordance with Ind AS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”.
Accordingly, comparative financial information for prior periods has been restated. The impact of this change is as follows:
a. Decrease in retained earnings as at April 1,2023: INR 561.01 lacs
b. Decrease in investment in subsidiary as at April 1,2023:- INR 561.01 lacs
c. Increase in profit before tax for the year ended March 31,2024: INR 365.06 lacs
Note- 46 Non-recognition of Deferred Tax Liability on Investment in Subsidiary
The Company has recognised its investment in Subsidiary at fair value in accordance with Ind AS 109, Financial Instruments.
As per Ind AS 12, Income Taxes, Paragraph 39, an entity shall not recognise a deferred tax liability for taxable temporary differences
associated with investments in subsidiaries to the extent that both of the following conditions are satisfied:
i. The parent is able to control the timing of the reversal of the temporary difference; and
ii. It is probable that the temporary difference will not reverse in the foreseeable future.
In the present case, though fair value recognition of investment results in a temporary difference between the carrying amount of
the investment (as per Ind AS) and its tax base (as per the Income-tax Act, 1961), the Company has not recognised a deferred
tax liability on such difference, since:
i. The Company has the ability to control the timing of reversal of such temporary difference, and
ii. The Company does not expect the temporary difference to reverse in the foreseeable future.
Accordingly, in line with Ind AS 12, para 39, no deferred tax liability has been recognised on temporary differences relating to
investments in subsidiaries.
Note- 47 The Company has written off Trade receivables and Other balance amounting to Rs. 210.20 Lakhs. The company has
also written off prior period Tax balances amounting to Rs.63.66 Lakhs. In the opinion of the management, recovery of the same
is doubtful in nature.
Note- 48 Capital management
Objective
The Group’s objective is to maintain appropriate levels of capital to support its business strategy taking into account the
regulatory,economic and commercial environment.
The Group aims to maintain a strong capital base to support the risks inherent to its business and growth strategies. The Group
endeavours to maintain a higher capital base than the mandated regulatory capital at all times.
Planning
The Group’s assessment of capital requirement is aligned to the mandatory regulatory capital and its planned growth which forms
part of an annual operating plan which is approved by the Board and also a long range strategy. These growth plans are aligned
to assessment of risks- which include credit, liquidity and market.
The company monitors its capital to risk-weighted assets ratio (CRAR) on a monthly basis through NBS-2 Return filed with RBI.
The Group endeavours to maintain its CRAR higher than the mandated regulatory norm. Accordingly, increase in capital is
planned well in advance to ensure adequate funding for its growth.
Further, the Parent Company supports funding needs of its wholly owned subsidiaries, associates and other investee companies
by way of capital infusion and loans.
Similarly, the Company also makes investment in other companies for operating and strategic reasons. These investments are
funded by the Company through its equity share capital and other equity which inter alia includes retained profits.
Note- 49 Title deeds of the Immovable Property not held in the name of the company
The company shall provide the details of all the immovable property (other than properties where the Company is the lessee and
the lease agreements are duly executed in favour of the lessee) whose title deeds are not held in the name of the company in
format given below and where such immovable property is jointly held with others, details are required to be given to the extent
of the company’s share - NIL
Note- 50 Ageing wise analysis of Intangible Assets under development
(a) Intangible assets under development - There are no Intangible Assets under Development
(b) For Intangible assets under development, whose completion is overdue or has exceeded its cost compared to its original
plan, following Intangible assets under development completion schedule shall be given - NOT APPLICABLE
Note- 51 Details of Benami Property held - There are no Benami Property Transactions
Where any proceedings have been initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder, the company shall disclose the following:-
a. Details of such property, including year of acquisition,
b. Amount thereof,
c. Details of Beneficiaries,
d. If property is in the books, then reference to the item in the Balance Sheet,
e. If property is not in the books, then the fact shall be stated with reasons,
f. Where there are proceedings against the company under this law as an abetter of the transaction or as the transferor then
the details shall be provided,
g. Nature of proceedings, status of same and company’s view on same.
Note- 52 Capital Work In Progress)
There is no Capital Work in Progress required to be maintained by the company.
Note- 53 Relationship with Struck off Companies
The Company does not have any relationship with any of the Struck Off Companies whether under section 248 of the Companies
Act or Section 560 of Companies Act, 1956.
Note- 54 Wilful Defaulter
The company is not declared as Wilful Defaulter by any Bank or Financial Institution or any other lender.
Note- 55 Corporate Social Responsibility (CSR)
The provisions of Corporate Social Responsibility (CSR) are not applicable to the company.
Note - 56 DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY
The company has not traded or invested in Crypto Currency or Virtual Currency during the Financial Year.
Note- 57 UNDISCLOSED INCOME
There are no transactions which are not 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). Further, there was no unrecorded income and related assets which are required to be recorded in
the books of accounts during the year.
Note- 58 NO OF LAYERS OF COMPANIES
The company has not made any default on No of layers of companies through which it has invested.
Note - 59
Figures have been regrouped and rearranged wherever necessary.
As per our attached report of even date
For Deoki Bijay & Co For and on Behalf of Board of Directors
Chartered Accountants
ICAI Firm Registration Number : 313105E
CA Sushil Kumar Agrawal Kumar Nair Ramachandran Unnikrishnan
Partner Managing Director Director & CFO
Membership Number: 059051 DIN: 00320541 DIN: 00493707
place: Mumbai Suhas Borgaonkar Place: Mumbai
Date : May 02, 2025 Company Secretary Date : May 02, 2025
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