14 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there
is a reliable estimate of the amount of the obligation. When a provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time
value of money is material). The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due
to the passage of time is recognised as interest expense. Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence
of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises
from past events where it is either not probable that an outflow of resources will be required to settle the obligation or
a reliable estimate of the amount cannot be made.
A contingent asset is disclosed, where an inflow of economic benefit is probable. An entity shall not recognize a
contingent asset unless the recovery is virtually certain.
15 Amendments in Ind AS
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not
notified any new standards or amendments to the existing standards applicable to the Company.
(a) During the year, due to the repayment of the default loans and change in method of Expected credit loss calculation
companies impairment allowances has been reduces from ' 460.29 Lakhs to ' 459.62 Lakhs and impact of reversal
of impairment has been consider in profit and loss account.
i) All Housing and other loans are originated in India.
ii) Loans granted by the company are secured by equitable mortgage/ registered mortgage of the property and assets
financed and/or undertaking to create a security and/or assignment of Life Insurance Policies and/or personal
guarantees and/or hypothecation of assets and are considered appropriate and good.
iii) There were no loans given against the collateral of gold jewellery and hence the percentage of such loans to the
total outstanding asset is ' Nil (March 31, 2023: ' Nil).
19.1 Nature and purpose of reserves:
(i) Capital Reserve: The Capital Reserve represents profit on forfeiture of equity shares by the Company. This reserve is
not freely available for distirbution to the shareholders.
(ii) Securities Premium: The amount of difference between the issue price and the face value of the shares is recognised
in Securities Premium.
(iii) General Reserve: General Reserve is the accumulation of the portions of the net profits transferred by the Company in
the past years. The reserve is free available for distribution to the shareholders.
(iv) Special Reserve: As per Section 29C of National Housing Bank Act 1987, the Company is required to transfer atleast
20% of its Net profit every year to a reserve before any dividend is declared. No withdrawals are permitted from this
reserve without prior permission of the RBI/NHB.
(v) Retained earnings: Retained earnings comprise of the profits of the Company earned till date net of appropriation,
distributions and other adjustments.
(vi) Other Comprehensive Income: Other Comprehensive Income represents recognized remeasurement gains/ (loss) on
defined benefit plans in other comprehensive income. These changes are accumulated within other item of the other
comprehensive income under "Other Equity".
19.2 As per Section 29C of National Housing Bank Act, 1987, the Company is required to transfer atleast 20% of its Net profit
every year to a Special Reserve before any dividend is declared. For this purpose any Special Reserve created by the
Company under Section 36(1)(viii) of the Income Tax Act,1961 is considered to be an eligible transfer. The Company has
transferred an amount of ' 29.22 Lakhs (March 31, 2023: ' 27.28 Lakhs) to Special Reserve as per provisions of the
Section 36(1)(viii) of the Income Tax Act, 1961.
Level 1 : hierarchy includes financial instruments measured using quoted prices.
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 and rely as little as possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
(i) Valuation technique used to determine fair value
The carrying amounts of cash and cash equivalents, other bank balances, trade payables and other financial liabilities are
considered to be the same as their fair values, due to their short-term nature.
The fair values for loans and other financial assets were calculated based on cash flows discounted using a current lending rate.
They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter
party credit risk.
The fair values of debt securities and borrowings other than debt securities are based on discounted cash flows using a current
borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs,
including own credit risk.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
Note 33: Financial Risk Management and Capital Management
(A) Financial Risk Management
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's
financial risk management policy is set by the Board. While the Company is exposed to various types of risks, the most important
among them are credit risk, liquidity risk, interest rate risk and regulatory risk. This measurement, monitoring and management of
risks remain a key focus area for the Company.
Credit Risk
Credit risk is the risk of loss that may occur from the failure of any party to abide by the terms and conditions of any contract,
principally the failure to make required payments of amounts due to company. In lending operations, the Company is principally
exposed to credit risk.
The credit risk is governed by various Product Policies. The Product Policy outlines the type of products that can be offered, customer
categories, the targeted customer profile and the credit approval process and limits.
The Company measures, monitors and manages credit risk at an individual borrower level. The credit risk for individual borrowers
is being managed at portfolio level for Housing Loans and Non Housing Loans. The Company has a structured and standardized
credit approval process, which includes a well-established procedure of comprehensive credit appraisal. The Risk Management
Policy addresses the recognition, measurement, monitoring and reporting of the Credit risk.
Credit Approval Authorities
The Board of Directors has delegated credit approval authority on the basis of cadre of employees with approval limits.
Credit Risk Assessment
Housing and Non-housing Loan to Individuals: Company's customers for housing loans and non housing loans are primarily
low, middle and high-income, salaried and self-employed individuals. All housing loans and non housing loans are also subjected
to risk based pricing wherein the individual cases are graded on a credit score linked to multiple parameters of appraisal.
The Company's credit officers evaluate credit proposals on the basis of active credit policies as on the date of approval.The criteria
typically include factors such as the borrower's income & obligations, the loan-to-value ratio, Fixed obligation to income ratio and
demographic parameters subject to regulatory guide lines. Any deviations need to be approved at the designated levels.
The various process controls such as KYC Check, CERSAI database scrubbing, Credit Bureau Report analysis are undertaken
prior to approval of a loan. In addition External agencies such as field investigation agencies facilitate a comprehensive due diligence
process including visits to offices and homes.
The housing loans and non housing loans are fully secured and have full recourse against the borrower. The Company has a
equitable mortgage over the borrowers property. Where-ever the state laws provide, the memorandum of deposit of title deeds are
also registered.
Builder/Project Finance : Loans advanced for the purpose of construction of Residential/Commercial Properties. The Company
has a framework for appraisal of the application and subsequent execution of Builder/Project Finance loan that is encompassed
in the Builder/Project Loan Policy. The Policy has been framed bearing in mind to create optimal risk identification, allocation and
mitigation and helps minimize residual risk.
The Builder / Project Finance approval process includes intrinsic evaluation of technical, commercial, financial and legal with respect
to the Projects and additionally evaluate the strength, experience and previous track record of the Borrower Group's and its
promoters/venture partners/associates.
As part of the appraisal process, a note is generated, which identifies each of the project risks, mitigating factors and residual risks
associated with the project and after internal credit appraisal, the Sanction Letter is issued to the applicant, which outlines the
principal financial terms of the proposed facility, Borrowers/Security providers obligations, conditions precedent to disbursement,
undertakings from and covenants on the borrower.
After satisfactory completion of all the security formalities by the applicant, a Loan Agreement is entered into with the applicant/borrower.
Such loans are generally fully secured and have full recourse against the borrower. In most cases, the Company has registered
mortgage of the financed Project. Security typically includes the project property (in part or full) as well as other tangible assets of
the borrower, both present and future. The Company also takes additional credit comforts such as personal guarantees and
undertaking from one or more promoters of the project. The Company mandates the borrower to submit periodic reports and
continues to monitor the exposure until the loans are fully repaid.
Risk Management and Portfolio Review
The Company ensures effective monitoring of credit facilities through a risk-based asset review framework under which the frequency
of asset review is determined depending on the risk associated with the product.
The Operations team monitors compliance with the terms and conditions for credit facilities prior to disbursement. It also reviews
the completeness of documentation, creation of security and compliance with regulatory guidelines.
The Company, regularly reviews the credit quality of the portfolio. A summary of there views carried out is submitted to the concerned
teams.
Liquidity Risk
Liquidity Risk is defined as the risk that the Company will not be able to settle of meet its obligations on time or at a reasonable
price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, trade payables and other
financial liabilities. The Company manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast
and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Maturity Analysis is given in note 31.
Adequate liquidity cover is maintained by the company in line with the RBI's liquidity risk management frame work to the extent
applicable to the company.
Market risk
(i) Interest Rate Risk
The Company is exposed to interest rate risk as it has assets on floating interest rates and borrowing on fixed interest rates. The
Company has an approved Asset and Liability Management Policy which empowers the Asset and Liability Management Committee
(ALCO) to assess the interest rate risk run by it and provide appropriate guidelines to manage the risk. The ALCO reviews the
interest rate risk on periodic basis and decides on the asset profile and the appropriate funding mix. The ALCO reviews the interest
rate gap statement and the interest rate sensitivity analysis. However, the Company does not have any exposure to interest rate
risk in respect of its existing borrowing/debt securities as the rate of Interest is fixed.
(ii) Price Risk
The Company's exposure to investment in Equity is not significant and hence the Company's exposure to price risk is insignificant.
Regulatory Risk
The Company requires certain statutory and regulatory approvals for conducting business and failure to obtain retain or renew these
approvals in a timely manner, may adversely affect operations. Any change in laws or regulations made by the government or a
regulatory body that governs the business of the Company may increase the costs of operating the business, reduce the attractiveness
of investment and / or change the competitive landscape.
(B) Capital Management
The Company maintains an actively managed capital base to cover risks inherent in the business and is meeting the capital adequacy
requirements of Reserve Bank of India (RBI). The adequacy of the Company's capital is monitored using, among other measures,
the regulations issued by RBI/NHB from time to time.
The Company has complied with the applicable capital requirements over the reported period.
Risk management
The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to
stakeholders through the optimisation of the debt and total equity balance.
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. Consistent with others in the industry, the Company monitors
capital on the basis of the following gearing ratio: Net debt (total borrowings (undiscounted) net of cash and cash equivalents) divided
by 'Equity' (as shown in the balance sheet). The gearing ratios are as follows :
Note 35 Employee Benefits:
In compliance with the Indian Accounting Standard on 'Employee Benefits' (Ind AS 19), following disclosures have been made:
Defined Benefit Plans:
Provident Fund
An amount of ' 12.66 Lakhs (March 31, 2023: ' 12.87 Lakhs) has been charged to Statement of Profit and Loss on account of this
defined benefit scheme.
Employees State Insurance
An amount of ' 0.83 lakhs (March 31, 2023: ' 1.04 lakhs) has been charged to Statement of Profit and Loss of this defined benefit
scheme.
Leave Encashment
An amount of ' 2.55 Lakhs (March 31, 2023: ' 2.70 Lakhs) has been charged to Statement of Profit and Loss of this benefit scheme
during the year.
Gratuity Plan
Gratuity is payable to all the members at the rate of 15 days salary for each completed year of Service.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring
at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual changes in the projected benefit obligation
as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may
be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been
calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied
in calculating the projected benefit obligation as recognised in the balance sheet.
36. Contingent Liabilities and Other Commitments
(i) Contingent Liabilities not provided for in respect of Income Tax Matters:
A demand of Income Tax of ' 38.78 Lakhs (March 31, 2023: '38.78 Lakhs) is pending with respect to the financial year
2009-10 against certain disallowances under the Income Tax Act, 1961 against which appeal is pending before the
Commissioner of Income Tax (Appeal). The Company had deposited '7.76 Lakhs (March 31, 2023, '7.76 Lakhs) in
protest against this demand.
(ii) Other commitments: ' Nil (March 31, 2023: ' Nil)
(iii) Company has sanctioned but not disbursed Loan amounting of ' 517.21 Lakh as on March 31, 2024 (March 31, 2023
' 130.46 Lakhs)
37. Segment Reporting
The Company's main business is financing by way of loans for the purchase or construction of residential houses, commercial
real estate or certain other purposes, in India. All other activities of the Company revolve around the main business. Hence,
there are no separate reportable segments, as per Ind AS 108 dealing with Operating Segments as specified under
Section 133 of the Companies Act, 2013
XXXX. Liquidity Coverage Ratio (LCR) guidelines as defined in Para No.3.1.2 of Master Direction - Non-Banking Financial
Company - Housing Finance Company (Reserve Bank) Directions, 2021 are not applicable presenly to the Company.
XXXXI. Institutional Set-up for liquidity risk management
The Board of Directors of the Company has constituted the Asset Liability Management Committee (ALCO) and the Risk
Management Committee. The Board has the overall responsibility for management of liquidity risk. The board decides
the strategy, policies and procedures to manage liquidity risk in accordance with liquidity risk tolerance/ limits approved
by it. The Risk Management Committee (RMC), which is a committee of the board, is responsible for evaluating and
monitoring the integrated risk management system of the Company including liquidity risk. The ALCO is responsible for
ensuring adherence to the liquidity risk tolerance/limits set out in the board approved Asset Liability Management (ALM)
policy.
The role of the ALCO with respect to liquidity risk includes, inter alia, decision on desired maturity profile for assets &
liabilities, responsibilities and control for managing liquidity risk, and overseeing the liquidity position of the Company. The
ALM Policy is reviewed periodically to realign the same pursuant to any regulatory changes/changes in the economic
landscape or business needs and tabled to the Board for approval.
Management regularly reviews the position of cash equivalents by aligning the same with the projected maturity of financial
assets and financial liabilities, economic environment, liquidity position in the financial market, anticipated pipeline of future
borrowing & future liabilities and threshold of minimum liquidity define in the ALM policy with additional liquidity buffers
as management overlay.
XXXXII. In compliance with Master Direction - Non-Banking Financial Company - Housing Finance Company (Reserve Bank)
Directions, 2021 dated February 17, 2021 issued by Reserve Bank of Indi read with RBI circular no. RBI/DNBS/2016-
17/49/Master Direction DNBS.PPD.01/66.15.001/2016-17 dated September 09, 2016, during the year the company has
reported "NIL" fraud case in relation to loans advanced to the borrowers to NHB (March 31, 2023 Nil).
45. Other disclosures/information
45.1 Additional information required as per Schedule III of the Companies Act, 2013:
(i) Details of benami property held
No proceedings have been initiated or are pending against the Company as at March 31, 2024 for holding benami
property under the Benami Transactions (Prohibition) Act (45 of 1988), as amended and rules made thereunder.
(ii) Borrowing secured against current assets
The Company has not borrowed any money from any bank or financial institution against security of current assets
during the year.
(iii) Wilful defaulter
The company is not declared wilful defaulter by any bank, financial institution or lender as at March 31, 2024.
(iv) Relationship with struck off companies
There are no transactions made by the Company during the year with struck off companies as at March 31, 2024.
(v) Compliance with number of layers of companies
The Company does not have any subsidiary or Associate or Joint Venture company during the year.
(vi) Compliance with approved scheme(s) of arrangements
During the year, no scheme of arrangements in relation to the Company has been approved by the competent authority
in terms of Section 232 to 237 of the Companies Act, 2013. Accordingly, this clause is not applicable to the company.
(vii) Utilisation of borrowed funds and share premium
As a part of normal lending business, the company grants loans and advances on the basis of security/guarantee provided
by the Borrower/Co borrower. These transactions are conducted after exercising proper due diligence.
Other than transactions described above, during the year the Company has not advanced or lend or invested funds
(either from the borrowed funds or share premium or any other sources or kind of funds) to any person or entity, including
foreign entity (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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
The Company has not received any fund from any person or entity, including foreign entity (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
(viii) Undisclosed income
The Company does not have any unrecorded transactions in the books of account which have been surrendered or
disclosed as Income during the year in the tax assessment under the Income Tax Act,1961.
(ix) Transactions in crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the year ended March 31, 2024.
(x) Revaluation of property, plant & equipment and intangible asset
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the year ended March 31, 2024.
(xi) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are pending to be registered with the Registrar of Companies as on
March 31, 2024.
45.2 Other Statutory information
(i) Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Company was not required to spend any
amount on Corporate Social Responsibility (CSR) activities during the year ended March 31, 2024.
(ii) There was no amount outstanding and due for transfer to the Investor Education and Protection Fund during the year
ended March 31, 2024.
(iii) The Company has no long term contracts including derivative contracts having material foreseeable losses as at
March 31, 2024 other than disclosed in the other notes of the Financial Statement
(iv) The Company has not received any whistleblower complaint during the year ended March 31, 2024.
(v) There is no Core Investment Company within the group as defined in the regulations made by the Reserve Bank of
India.
47 Expenditure and Income in Foreign Currency : ' Nil (March 31, 2023 : ' Nil)
48 During the financial year 2015-16, maturity proceeds of ' 6.14 lakhs in respect of investment in 11.43% GOI Stocks held
in CSGL Account of the Company with ICICI Bank Limited was transferred to the Sahara-Sebi Account by the bank without
any authorization from the Company, in compliance to an Order of the Hon'ble Supreme Court of India and directions by
SEBI. On October 5, 2023, the maturity amount ' 6.14 lakhs was realised in bank account of the Company in respect of
the aforesaid investment.
49 Figures for previous year have been regrouped / restated where necessary to the extent required by Schedule III
amendments and Circulars/Directions/Clarification issued by RBI/NHB to make comparable with current year presentation.
50 All amounts in the financial statements and notes have been presented in lakhs upto two decimals as per requirement
of Schedule III except per share data and unless otherwise stated. Figures in brackets represent corresponding previous
year figures.
As per our report of even date attached
For B.M.Chaturvedi & Co FOR AND ON BEHALF OF THE BOARD
Chartered Accountants
ICAI FRN : 114317W A.K. SRIVASTAVA Director (DIN 02323304)
ANMOL SONAWANE ANSHU ROY Director (DIN 05257404)
Partner D. J. BAGCHI Chief Executive Officer & Company Secretary
ICAI Membership No. 603614
UDIN : 24603614BKGTVN1465 VIVEK KAPOOR Chief Financial Officer
Date : May 29, 2024 Date : May 29, 2024
Place: Mumbai Place: Kolkata
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