17.1 The rights, preference and restrictions attached to each class of shares including restrictions on the distribution of dividends and the repayment of capital are as under:

Equity Shares

The equity shares have a par value of? 10 per share. Each shareholder is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval shareholders ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

27 Segment Reporting

As per Indian Accounting Standard (Ind AS)-108 "Operating Segments", the Company’s segment reporting is as below:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The managing director has been identified as being the chief operating decision maker to assess the financial performance and position of the Company and make strategic decisions. The Company is engaged primarily in the business of "Financing and providing Consultancy ”. Accordingly, In the context of Indian Accounting Standard 108 - Operating Segments, it is considered to constitute single reportable segment.

28 Related Party Disclosure

As per Indian Accounting Standard (Ind AS)-24 "‘Related Party Disclosures”, the Company’s related parties and transactions are disclosed below:

29 In the opinion of the management, the value on realization of current assets, loans & advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet and provisions for all known liabilities have been made.

30 The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of current assets which includes loans given, cash and cash equivalents, other bank balances and other financial assets approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

37 Financial risk management

The Company’s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s senior management has the overall responsibility for establishing and governing the Company’s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

Management of liquidity and funding risk

Liquidity risk arises from mismatches in the timing of cash flows.

Funding risk arises:

when long term assets cannot be funded at the expected term resulting in cashflow mismatches; amidst volatile market conditions impacting sourcing of funds from banks and money markets.

Liquidity and funding risk is measured by identifying gaps in the structural and dynamic liquidity statements.

Liquidity and funding risk is monitered by :

- assessment of the gap between visibility of funds and the near term liabilities given current liquidity conditions and evolving regulatory directions for NBFCs.

- a constant calibration of sources of funds in line with emerging market conditions in banking and money markets.

- periodic reviews by risk management committee relating to the liquidity position and stress tests assuming varied ‘what if scenarios and comparing probable gaps with the liquidity buffers maintained by the Company.

Liquidity and funding risk is managed by the Company’s treasury team under the guidance of risk management committee.

Management of 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.

Management of credit risk

Credit risk is the risk of financial loss arising out of a customer or counterparty failing to meet their repayment obligations to the Company. It has a diversified lending model and focuses on six broad categories viz: (i) consumer lending, (ii) SME lending, (iii) rural lending, (iv) mortgages, (v) loan against^ffi^sj^nd (vi) commercial lending. The-C$n^iy^ssesses the credit quality of all

financial instruments that are subject to credftyteic:---^o\v f

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a). Classification of financial assets under various stages

The Company classifies its financial assets in three stages having the following characteristics:

Stage 1

Unimpaired and without significant increase in credit risk since initial recognition on which a 12 month allowance for ECL is recognised;

Stage 2:

A significant increase in credit risk since initial recognition on which a lifetime ECL is recognised;

Stage 3:

Objective evidence of impairment, and are therefore considered to be in default or otherwise credit impaired on which a lifetime ECL is recognised.

Unless identified at an earlier stage, all financial assets are deemed to have suffered a significant increase in credit risk when they are 30 days past due (DPD) and are accordingly transferred from stage 1 to stage 2. For stage 1 an ECL allowance is calculated based on a 12 month Point in Time (PIT) probability weighted probability of default (PD). For stage 2 and 3 assets a life time ECL is calculated based on a lifetime PD.

Financial instruments other than loans were subjected to simplified ECL approach under Ind AS 109 'Financial Instruments' and accordingly were not subject to sensitivity of future economic conditions.

38 The figures for the previous year have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III, Division III.

39 All amounts in the financial statements are rounded off to the nearest amount in Indian Rupees '000, unless stated otherwise.