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Notes to Accounts of Kalyan Capitals Ltd.
Mar 31, 2025
X. Contingent liabilities and provisions
Contingent liabilities are disclosed after evaluation of the facts and legal aspects of the matter involved, in line with the
provisions of Ind AS 37. The Company records a liability for any claims where a potential loss probable and capable of
being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered
possible, but not probable, the Company provides disclosures in the financial statements but does not record a liability in
its financial statements unless the loss becomes probable.
Provisions are recognised when the Company has a legal / constructive obligation as a result of a past event, for which it
is probable that a cash outflow may be required and a reliable estimate can be made 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).
XI. Leases
Lease payments under operating leases are recognised as an expense in the statement of profit and loss on a straight-line
basis over the lease term unless another systematic basis is more representative of the time pattern of the Company''s
benefit. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the
lessor''s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
XII. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets which are assets that
are necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are
recognised in the statement of profit and loss in the period in which they are incurred.
XIV. Earnings per share
Basic earnings / (loss) per share is calculated by dividing the net profit / (loss) for the current year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. The number of shares used in
computing diluted earnings per share comprises the weighted average share considered for calculating basic earnings /
(loss) per share, and also the weighted average number of shares, which would have been issued on the conversion of all
dilutive potential equity shares. Potential dilutive equity shares are deemed to be converted as at the beginning of the
period, unless they have been issued at a later date. The number of equity shares and potentially dilutive equity shares
are adjusted for bonus shares as appropriate.
XV. Income taxes
Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss
is recognised outside profit or loss i.e. in other comprehensive income. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of
adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will
pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying
amounts at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantively
enacted as at the reporting date. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied
by the same governing tax laws and the Company has a legally enforceable right for such set off.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
XVI. Fair Value Measurement
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.
Fair value is the price that would be received against sale of an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place in the accessible principal market or the most advantageous
accessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair value
measurement as a whole.
For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Note 2.3 Significant accounting Judgements, estimates and assumptions
Significant accounting Judgements, estimates and assumptions
"The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires
the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities
(including contingent liabilities) and the reported income and expenses during the year. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which
estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision
affects both current and future periods. The following are the key assumptions concerning the future, and other sources of
estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities in future are:
(i) Defined benefit plans/other Long term employee benefits: The cost of the defined benefit plans and other long term
employee benefit plans are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These includes the determination of the discount rate,
future salary increases and mortality rates. Due to the complexities involved in the valuation and it long term nature, a
defined benefit obligation is highly sensitive in these assumptions. All assumptions are reviewed by the company at each
reporting date. The parameters must subject to change in the discount rate. The management considers the interest rate
of the government securities based on expected settlement period of various plans.
(ii) Taxes : Uncertainty exist with respect to interpretation of complex tax regulations, changes in tax laws and the amount
and timing of future taxable income. The company establishes provision, based on reasonable estimates. The amount of
such provisions is based on various factors such as experience of previous tax auditors and responsible tax authority.
Such differences in interpretation may arise on a wide variety of issues depending on the conditions prevailing in the
respective domicile of the company. In assessing the recoverability of deferred tax assets, management considers
whether it is probable that taxable profit will be available against which the losses can be utilised. The ultimate realisation
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the
temporary differences become deductible.
NOTE : 23 Revised Guidelines of Reserve Bank of India vide their notification dated 2nd January 1998, 31 st January 1998 and 12th May
1998 and revised on 22nd Februrary 2007, vide notificated no. DNBS. 192/DG(VL)-2007 and DNBS PD CC No.
207/03.02.002/2011-11 dt. 17 Jamuary 2011 in respect of Income Recognition and assets classification has been duly
incorporated in the audited statements of accounts.
NOTE : 24 "There is no Employee drawing remuneration in excess of ? 1,02,00,000/- during the year ended 31 st March 2025 or ? 8,50,000/-
per month."
NOTE : 29 SEGMENT REPORTING
The Companyâs business activity falls within single primary/secondary business segment viz., business of loans and Advances & all related
services in all areas of information technology in India. The disclosure requirement of Indian Accounting Standard (AS) - 108 âOperating
Segmentsâ notified under the Companies Act, 2013 and rules made thereunder is, therefore is not applicable.
NOTE : 30 FAIR VALUES
The Management assessed that the cash and cash equivalents and Current Tax Assets approximate their carrying amounts largely due to the
short- term maturities of these instruments.
The fair value of the financial assets and liabilities is 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
Additionally, financial liabilities such as Current Tax Liabilities are not measured at FVTPL, whose carrying amounts approximate fair value,
because of their short-term nature.
(i) The Significant unadjusted inputs used in the fair value measurement categorised within level 2 of the fair value hierarchy together with a
quantitatives sensitivity analysis as at 31 March 2024 are as shown below.
Description Valuation technique Significant observable inputs
1. Investment in Equity Shares Market approach Rate of Market of Issuing
company
(ii) Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include :
⢠Quoted equity investments - Quoted closing price on stock exchange
⢠Mutual fund - net asset value of the scheme
⢠Alternative investment funds - net asset value of the scheme
⢠Unquoted equity investments - price multiples of comparable companies.
⢠Private equity investment fund - NAV of the audited financials of the funds.
(iii) Financial instruments not measured at fair value
Financial assets not measured at fair value includes cash and cash equivalents and Current Tax Assets. These are financial assets whose carrying
amounts approximate fair value, due to their short-term nature.
Additionally, financial liabilities such as Current Tax liabilities are not measured at FVTPL, whose carrying amounts approximate fair value,
because of their short-term nature.
NOTE : 31 FAIR VALUE HIERARCHY:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable
and consists of the following three levels:
Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
NOTE : 35 Financial Risk Management:
The Companyâs principal financial liabilities, comprise Current Tax Liabilities. The main purpose of these financial liabilities is limited to
maintained the Company''s operations. The Companyâs principal financial assets includes Investments,loans, Cash and cash equivalents and
Current Tax Assets.
The Company is exposed to credit risk and Liquidity risk. The Company''s Senior management oversees the management of these risks. The
Comaopny''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and
managed in accordance with Company;s policies and risk objectives.
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Companyâs loans and advances to customers. For risk management reporting purposes, the Company
considers and consolidates all elements of credit risk exposure.
Management of credit risk
Expected credit loss measurements
(i) Expected credit loss measurement for Loans :
Ind AS 109 outlines a âthree-stageâ model for impairment based on changes in credit quality since initial recognition as summarised below:
1. A financial instrument that is not credit-impaired on initial recognition is classified in â Stage 1 â and has its credit risk continuously monitored
by the Company.
2. If a significant increase in credit risk (âSICRâ) since initial recognition is identified, the financial instrument is moved to âStage 2â but is not
yet deemed to be credit-impaired.
3. If the financial instrument is credit-impaired, the financial instrument is then moved to âStage 3â.
Financial instruments in Stage 1 have their ECL measured at an amount equal to the portion of lifetime expected credit losses that result from
default events possible within the next 12 months. Instruments in Stages 2 or 3 have their ECL measured based on expected credit losses on a
lifetime basis.
The following diagram summarises the impairment requirements under Ind AS 109 (other than purchased or originated credit-impaired financial
The key judgements and assumptions adopted by the Company in addressing the requirements of the standard are discussed below:
Significant increase in credit risk (SICR)
The Company considers a financial instrument to have experienced a significant increase in credit risk when one or more of the following
quantitative, qualitative or backstop criteria have been met:
Quantitative criteria:
When days passed dues from the borrower is more than 30 days but less than 90 days
Qualitative criteria:
If the borrower meets one or more of the following criteria:
(i) In short-term forbearance
(ii) Direct debit cancellation
(iii) Extension to the terms granted
(iv) Previous arrears within the last [12] months
Default and credit-impaired assets
The Company defines a financial instrument as in default, which is fully aligned with the definition of credit impaired, when it meets one or
more of the following criteria:
Quantitative criteria:
The borrower is more than 90 days past due on its contractual payments.
Qualitative criteria:
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial difficulty. These are
(i) The borrower is in long-term forbearance
(ii) The borrower is deceased
(iii) The borrower is insolvent
(iv) Concessions have been made by the lender relating to the borrowerâs financial difficulty It is becoming probable that the borrower will enter
bankruptcy
Measuring ECL - Explanation of inputs, assumptions and estimation techniques
The Expected Credit Loss (ECL) is measured on either a 12-month basis (12M) or Lifetime basis depending on whether a significant increase in
credit risk has occurred since initial recognition or whether an asset is considered to be creditimpaired. Expected credit losses are the discounted
product of the Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD), defined as follows:
The PD represents the likelihood of a borrower defaulting on its financial obligation (as per âDefinition of default and credit-impairedâ above),
either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.
The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the impairment calculation,
addressing both the clientâs ability to increase its exposure while approaching default and potential early repayments too.
To calculate the EAD for a Stage 1 loan, the Group assesses the possible default events within 12 months for the calculation of the 12mECL.For
stage 2, Stage 3 Financial Assets, , the exposure at default is considered for events over the lifetime of the instruments.
Loss Given Default (LGD) represents the Groupâs expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty,
type and seniority of claim and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure at the
time of default. LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the
default occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining
expected lifetime of the loan.
The ECL is determined by projecting the PD, LGD and EAD for each three bucket explained above and for each individual exposure or
collective segment. These three components are multiplied together and adjusted for the likelihood of survival (i.e. the exposure has not prepaid
or defaulted in an earlier month). This effectively calculates an ECL for each three buckets, which is then discounted back to the reporting date
and summed. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.
The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile looks at how defaults develop on a
portfolio from the point of initial recognition throughout the lifetime of the loans. The maturity profile is based on historical observed data and is
assumed to be the same across all assets within a portfolio and credit grade band. This is supported by historical analysis.
The 12-month and lifetime EADs are determined based on the expected payment profile. Estimate of an exposure at a future default date -
expected changes in exposure after the reporting date, including repayment of principal and interest, and expected drawdowns on committed
facilities. This is based on the contractual repayments owed by the borrower over a 12month or lifetime basis. This will also be adjusted for any
expected overpayments made by a borrower. Early repayment / refinance assumptions are also incorporated into the calculation.
The 12-month and lifetime LGDs are determined based on the factors which impact the recoveries made post default. These vary by collateral
type.
Forward-looking economic variable / assumptions used are - such as how the maturity profile of the PDs and how collateral values change etc. -
are monitored and reviewed on a quarterly basis. There have been no significant changes in estimation techniques or significant assumptions
made during the reporting period.
Loss allowance
The loss allowance recognised in the period is impacted by a variety of factors, as described below:
(i) Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases (or
decreases) of credit risk or becoming credit-impaired in the period, and the consequent âstep upâ between 12-month and Lifetime ECL;
(ii) Additional allowances for financial instruments de-recognised in the period;
(iii) Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the period, arising from regular refreshing of inputs to
models;
(iv) Financial assets derecognised during the period and write-offs of allowances related to assets that were written off during the period.
Modification of financial assets
The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed
loans, with a view to maximising recovery.
Such restructuring activities include extended payment term arrangements, payment holidays and payment forgiveness. Restructuring policies
and practices are based on indicators or criteria which, in the judgement of management, indicate that payment will most likely continue. These
policies are kept under continuous review.
The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial
recognition, when the modification is not substantial and so does not result in derecognition of the original asset. The Company monitors the
subsequent performance of modified assets. The Company may determine that the credit risk has significantly improved after restructuring, so
that the assets are moved from Stage 3 or Stage 2 (Lifetime ECL) to Stage 1 (12-month ECL). This is only the case for assets which have
performed in accordance with the new terms for a year or more. Currently there hasnt been any case.
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.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus operating funds or
shareholder''s fund. The Company''s policy is to run organisation as a debt free company.
NOTE : 36 ANNEX TO BALANCE SHEET
The Annexure to Balance Sheet in terms of (Non-Banking Financial Company - Non-Systemically Important Non-Deposit
taking Company (Reserve Bank) Directions, 2016, has been annexed to Balance Sheet as Annex 1.
NOTE : 37 CAPITAL MANAGEMENT:
The companyâs objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other
- maintain an optimal capital structure to reduce the cost of capital.
The capital composition is as follows:
NOTE : 38 IMPAIRMENT OF FINANCIAL ASSETS
The Company has booked an impairment of financial assets as on 31st March, 2025 of Rs. 17.61 lacs ( as on 31st March 2024 Rs 17.61 Lacs).
As per the Reserve Bank (Non-Systematically Important Non-Deposit Taking Non-Banking Finance Companies) Directions, the provision
required to be prepared is Rs. 106.24 Lacs. The Company has transfered balance of Rs. 74.42 lacs to the impairment reserve as required by the
RBI Circular No. DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13.03.2020.
NOTE 39 MATURITY ANALYSIS OF ASSETS AND LIABILITIES:
The table below shows an analysis of assets and liabilities analysed according to when they are expected to be recovered or settled.
The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields/ rates available on
applicable bonds as on the current valuation date.
The salary growth rate indicated above is the Company''s best estimate of an increase in salary of the employees in future years, determined
considering the general trend in inflation, senority, promotions, past experience and other relevant factors such as demand and supply in
NOTE : 41 Title deeds of immovable property not held in the name of the company.
The Company doesn''t hold any type of immovable property in its name (Other than properties where the company is the lessee, the lease
agreements are duly executed in favour of the lessee, i.e., in the name of the company.)
NOTE : 43 Capital Work in progess under development
The company has no Capital Work in progress under development
NOTE : 44 Details of Benami Property held
No proceedings have been initiated or pending against the company for holding any benami property under the benami transactions (Prohibition)
Act, 1988 and the rules made thereunder.
NOTE : 45 Wilful defaulter
The company has not made any default in the repayment of any borrowing, as such the declaration as wilful defaulter is not applicable.
NOTE : 46 Relationship with stuck of the company
The company did not have any transaction with companies struck off under section 248 of the companies act 2013 or section 560 of the
companies act, 1956 as such no declaration is required to be furnished.
NOTE : 47 Registration of Charge/Satisfaction
There is no change or satisfactory changes which is pending for registration beyond the statutory period.
NOTE : 48 Compliance with number of layer of completion
There was no non compliance with the number of layers prescribed under clause (87) section 2 of the Act read with companies (Restriction on
number of layers) Rules, 2017.
NOTE : 50 Compliance with approved scheme (s) of arrangements
No scheme of arrangements was required u/s 230 to 237 of the companies Act, 2013 during the year, as such disclosure is not required.
NOTE : 51 Utilisation of borrowed fund & Share Premium
The company has nor advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kinds of funds) to
any opther person''s or entities including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that
the intermediary 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 to or on behalf of the ultimate beneficiaries;The company has
nor received any fund from any person''s or entities including foreign entities (Funding Party) with the understanding (whether recorded in
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 to or on behalf of the ultimate beneficiaries;
NOTE : 52 Undisclosed Income
The company has neither surrenderednor disclosed any income during the year in the tax assessments under the Income Tax Act, 1961.
NOTE : 53 Corporate Social Responsibility (CSR)
The Company is not required to comply with CSR requirements.
NOTE : 54 Cryptocurrency or Virtual Currency
The company has neither traded nor invested in cryptocurency or virtual currency as such no dislosure is required.
NOTE : 55 There were no Micro, Small and Medium Enterprises, to whom the Company owed dues, which were outstanding for more than 45 days as at
31st March, 2024. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has
been determined to the extent, such parties have been identified on the basis of information available with the Company.
NOTE : 56 Previous year''s figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current year''s classification
/ disclosure.
Sanjeev Singh Chandan Kumar Bhardwaj Sunil Kumar Malik
Chairman & Director CEO Director
DIN:00922497 PAN:BFFPB0820N DIN:00143453
Abhijeet Sharma Rohit Kumar
CFO Company Secretary
PAN:CLIPA7740L PAN:CPKPK5378A
AUDITORâS REPORT
AS PER OUR REPORT OF EVEN DATE ANNEXED
FOR M/s T.K. GUPTA & ASSOCIATES
CHARTERED ACCOUNTANTS
FIRM REGN NO. 011604N
PLACE : NEW DELHI
Dated:21/05/2025
CA. T.K. GUPTA (PARTNER)
M.NO. 82235
Mar 31, 2024
VII. Contingent liabilities and provisions
Contingent liabilities are disclosed after evaluation of the facts and legal aspects of the matter involved, in line with the provisions of Ind AS 37. The Company records a liability for any claims where a potential loss probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosures in the financial statements but does not record a liability in its financial statements unless the loss becomes probable.
Provisions are recognised when the Company has a legal / constructive obligation as a result of a past event, for which it is probable that a cash outflow may be required and a reliable estimate can be made 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).
VIII. Leases
Lease payments under operating leases are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the Companyâs benefit. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
IX. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets which are assets that are necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
X. Earnings per share
Basic earnings / (loss) per share is calculated by dividing the net profit / (loss) for the current year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average share considered for calculating basic earnings / (loss) per share, and also the weighted average number of shares, which would have been issued on the conversion of all dilutive potential equity shares. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares as appropriate.
XI. Income taxes
Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss i.e. in other comprehensive income. Management periodically evaluates positions taken in the tax returns withrespect tosituations in which applicabletax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
XII. Fair Value Measurement
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.
Fair value is the price that would be received against sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place in the accessible principal market or the most advantageous accessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair value measurement as a whole.
For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Note 2.3 Significant accounting Judgements, estimates and assumptions
Significant accounting Judgements, estimates and assumptions
"The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The following are the key assumptions concerning the future, and other sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in future are:
(i) Defined benefit plans/other Long term employee benefits: The cost of the defined benefit plans and other long term employee benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and it long term nature, a defined benefit obligation is highly sensitive in these assumptions. All assumptions are reviewed by the company at each reporting date. The parameters must subject to change in the discount rate. The management considers the interest rate of the government securities based on expected settlement period of various plans.
(ii) Taxes : Uncertainty exist with respect to interpretation of complex tax regulations, changes in tax laws and the amount and timing of future taxable income. The company establishes
provision, based on reasonable estimates. The amount of such provisions is based on various factors such as experience of previous tax auditors and responsible tax authority. Such differences in interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the company. In assessing the recoverability of deferred tax assets, management considers whether it is probable that taxable profit will be available against which the losses can be utilised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. "
(ii) Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include :
⢠Quoted equity investments - Quoted closing price on stock exchange
⢠Mutual fund - net asset value of the scheme
⢠Alternative investment funds - net asset value of the scheme
⢠Unquoted equity investments - price multiples of comparable companies.
⢠Private equity investment fund - NAV of the audited financials of the funds.
(iii) Financial instruments not measured at fair value
Financial assets not measured at fair value includes cash and cash equivalents and Current Tax Assets. These are financial assets whose carrying amounts approximate fair value, due to their short-term nature. Additionally, financial liabilities such asCurrent Tax liabilities are not measured at FVTPL, whose carrying amounts approximate fair value, because of their short-term nature.
NOTE : 32 FAIR VALUE HTF.R AR CHY:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 â Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 â Inputs are not based on observable market data (unobservable inputs).
NOTE : 36 Financial Risk Management:
The groupâs principal financial liabilities, comprise Current Tax Liabilities. The main purpose of these financial liabilities is limited to maintained the group''s operations. The groupâs principal financial assets includes Investmentsjoans, Cash and cash equivalents and Current Tax Assets.
The group is exposed to credit risk and Liquidity risk. The group''s Senior management oversees the management of these risks. The group''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with group''s policies and risk objectives.
Credit Risk
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the groupâs loans and advances to customers. For risk management reporting purposes, the group considers and consolidates all elements of credit risk exposure.
Management of credit risk
Expected credit loss measurements
(i) Expected credit loss measurement for Loans :
Ind AS 109 outlines a âthree-stageâ model for impairment based on changes in credit quality since initial recognition as summarised below:
1. A financial instrument that is not credit-impaired on initial recognition is classified in âStage 1â and has its credit risk continuously monitored by the group.
2. If a significant increase in credit risk (âSICRâ) since initial recognition is identified, the financial instrument is moved to âStage 2â but is not yet deemed to be credit-impaired.
3. If the financial instrument is credit-impaired, the financial instrument is then moved to âStage 3â.
Financial instruments in Stage 1 have their ECL measured at an amount equal to the portion of lifetime expected credit losses that result from default events possible within the next 12 months. Instruments in Stages 2 or 3 have their ECL measured based on expected credit losses on a lifetime basis.
The following diagram summarises the impairment requirements under Ind AS 109 (other than purchased or originated credit-impaired financial assets):
Significant increase in credit risk (SICR)
The group considers a financial instrument to have experienced a significant increase in credit risk when one or more of the following quantitative, qualitative or backstop criteria have been met:
Quantitative criteria:
When days passed dues from the borrower is more than 30 days but less than 90 days Qualitative criteria:
If the borrower meets one or more of the following criteria:
(i) In short-term forbearance
(ii) Direct debit cancellation
(iii) Extension to the terms granted
(iv) Previous arrears within the last [12] months
Default and credit-impaired assets
The groupdefines a financial instrument as in default, which is fully aligned with the definition of credit impaired, when it meets one or mere of the following criteria:
Quantitative criteria:
The borrower is more than 90 days past due on its contractual payments.
Qualitative criteria:
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial difficulty. These are instances where:
(i) The borrower is in long-term forbearance
(ii) The borrower is deceased
(iii) The borrower is insolvent
(iv) Concessions have been made by the lender relating to the borrowerâs financial difficulty It is becoming probable that the borrower will enter bankruptcy Measuring ECL - Explanation of inputs, assumptions and estimation techniques
The Expected Credit Loss (ECL) is measured on either a 12-month basis (12M) or Lifetime basis depending on whether a significant increase in credit risk has occurred since initial recognition or whether an asset is considered to be creditimpaired. Expected credit losses are the discounted product of the Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD), defined as follows:
The PD represents the likelihood of a borrower defaulting on its financial obligation (as per âDefinition of default and credit-impairedâ above), either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.
The exposure at default (EAD) represents the gross carrying amount of the financial instruments subject to the impairment calculation, addressing both the clientâs ability to increase its exposure while approaching default and potential early repayments too.
To calculate the EAD for a Stage 1 loan, the Group assesses the possible default events within 12 months for the calculation of the 12mECL.For stage 2, Stage 3 Financial Assets, , the exposure at default is considered for events over the lifetime of the instruments.
Loss Given Default (LGD) represents the Groupâs expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure at the time of default. LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan.
The ECL is determined by projecting the PD, LGD and EAD for each three bucket explained above and for each individual exposure or collective segment. These three components are multiplied together and adjusted for the likelihood of survival (i.e. the exposure has not prepaid or defaulted in an earlier month). This effectively calculates an ECL for each three buckets, which is then discounted back to the reporting date and summed. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.
The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile looks at how defaults develop on a portfolio from the point of initial recognition throughout the lifetime of the loans. The maturity profile is based on historical observed data and is assumed to be the same across all assets within a portfolio and credit grade band. This is supported by historical analysis.
The 12-month and lifetime EADs are determined based on the expected payment profile. Estimate of an exposure at a future default date - expected changes in exposure after the reporting date, including repayment of principal and interest, and expected drawdowns on committed facilities. This is based on the contractual repayments owed by the borrower over a 12month or lifetime basis. This will also be adjusted for any expected overpayments made by a borrower. Early repayment / refinance assumptions are also incorporated into the calculation.
The 12-month and lifetime LGDs are determined based on the factors which impact the recoveries made post default. These vary by collateral type.
Forward-looking economic variable / assumptions used are - such as how the maturity profile of the PDs and how collateral values change etc. - are monitored and reviewed on a quarterly basis. There have been no significant changes in estimation techniques or significant assumptions made during the reporting period.
Loss allowance
The loss allowance recognised in the period is impacted by a variety of factors, as described below:
(1) Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases (or
decreases) of credit risk or becoming credit-impaired in the period, and the consequent âstep upâ between 12-month and Lifetime ECL;
(ii) Additional allowances for financial instruments de-recognised in the period;
(111) Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the period, arising from regular refreshing of inputs to models;
(iv) Financial assets derecognised during the period and write-offs of allowances related to assets that were written off during the period.
Modification of financial assets
The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed loans, with a view to maximising recovery.
Such restructuring activities include extended payment term arrangements, payment holidays and payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement of management, indicate that payment will most likely continue. These policies are kept under continuous review.
The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial recognition, when the modification is not substantial and so does not result in derecognition of the original asset. The group monitors the subsequent performance of modified assets. The group may determine that the credit risk has significantly improved after restructuring, so that the assets are moved from Stage 3 or Stage 2 (Lifetime ECL) to Stage 1 (12-month ECL). This is only the case for assets which have performed in accordance with the new terms for a year or more. Currently there hasnt been any case.
Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they become due. The group manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
The group''s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus operating funds or shareholder''s fund. The group''s policy is to run organisation as a debt free company.
NOTE : 37 CAPITAL MANAGEMENT:
The companyâs objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
NOTE : 38 IMPAIRMENT OF FINANCIAL ASSETS Parent Company
The Holding Company has booked an impairment of financial assets as on 31st March, 2024 of Rs. 17.61 lacs ( as on 31st March 2023 Rs 17.61 Lacs). As per the Reserve Bank (Non-Systematically Important Non-Deposit Taking Non-Banking Finance Companies) Directions, the provision required to be prepared is Rs. 31.83 Lacs. The Holding Company has transfered balance of Rs. 14.22 lacs to the impairment reserve as required by the RBI Circular No. DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13.03.2020.
Subsidiary Company
The Subsidiary Company has booked an impairment of financial assets as on 31st March 2024 of Rs.22.83 /-lacs . As per the Reserve Bank (Non-Systematically Important Non-Deposit Taking Non-Banking Finance Companies) Directions, the provision required to be prepared is Rs. 19.75/- lacs. Hence there is no deficit with respect to the RBI Directions.
NOTE : 43 Capital work In progress aging & overdue or has exceeded to its original place
NOTE : 44 Intangible assets under development
Details of Benami Property held
No proceedings have been initiated or pending against the group for holding any benami property under the benami transactions (Prohibition) Act, 1988 and the rules made thereunder.
NOTE : 45 Wilful defaulter
The group has not made any default in the repayment of any borrowing, as such the declaration as wilful defaulter is not applicable.
NOTE : 46 Relationship with stuck of the company
The group did not have any transaction with companies struck off under section 248 of the companies act 2013 or section 560 of the companies act, 1956 as such no declaration is required to be furnished.
NOTE : 47 Registration of Charge/Satisfaction
There is no change or satisfactory changes which is pending for registration beyond the statutory period.
NOTE : 48 Compliance with number of layer of completion
There was no non compliance with the number of layers prescribed under clause (87) section 2 of the Act read with companies (Restriction cn number of layers) Rules, 2017.
NOTE : 49 Compliance with approved scheme (s) of arrangements
No scheme of arrangements was required u/s 230 to 237 of the companies Act, 2013 during the year, as such disclosure is not required.
NOTE : 50 Utilisation of borrowed fund & Share Premium
The group has nor advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kinds of funds) to any opther person''s or entities including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary 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 to or on behalf of the ultimate beneficiaries;
The group has nor received any fund from any person''s or entities including foreign entities (Funding Party) 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 company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries;
NOTE : 51 Undisclosed Income
The group has neither surrenderednor disclosed any income during the year in the tax assessments under the Income Tax Act, 1961.
NOTE : 52 Corporate Social Responsibility (CSR)
The Group is not required to comply with CSR requirements.
NOTE : 53 Cryptocurrency or Virtual Currency
The group has neither traded nor invested in cryptocurency or virtual currency as such no dislosure is required.
NOTE : 56 Previous year''s figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current year''s classification / disclosure.
Sanjeev Singh Sunil Kumar Malik Pradeep Kumar Deepak Garg Isha Agarwal
Director Director CEO CFO Company Secretary
DIN: 00922497 DIN:00143453 PAN:DCFPK8892E PAN: BNLPG4443E M.No.:25763
AUDITORâS REPORT
AS PER OUR REPORT OF EVEN DATE ANNEXED FOR M/s TK. GUPTA & ASSOCIATES CHARTERED ACCOUNTANTS FIRM REGN NO. 011604N
PLACE : GHAZIABAD Dated:29/05/2024
CA. KRITI BINDAL (PARTNER)
M.NO. 516627
Mar 31, 2023
X. Contingent liabilities and provisions
Contingent liabilities are disclosed after evaluation of the facts and legal aspects of the matter involved, in line with the provisions of Ind AS 37. The Company records a liability for any claims where a potential loss probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosures in the financial statements but does not record a liability in its financial statements unless the loss becomes probable.
Provisions are recognised when the Company has a legal / constructive obligation as a result of a past event, for which it is probable that a cash outflow may be required and a reliable estimate can be made 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).
XI. Leases
Lease payments under operating leases are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern of the C°mpanyâs benefit. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the less°râs expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
XII. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets which are assets that are necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs are recognised in the statement of profit and loss in the period in which they are incurred.
XIV. Earnings per share
Basic earnings / (loss) per share is calculated by dividing the net profit / (loss) for the current year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average share considered for calculating basic earnings / (loss) per share, and also the weighted average number of shares, which would have been issued on the conversion of all dilutive potential equity shares. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The number of equity shares and potentially dilutive equity shares are adj usted for bonus shares as appropriate.
XV. Income taxes
Income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss i.e. in other comprehensive income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
XVI. Fair Value Measurement
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.
Fair value is the price that would be received against sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place in the accessible principal market or the most advantageous accessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair value measurement as a whole.
For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Note 2.3 Significant accounting Judgements, estimates and assumptions
Significant accounting Judgements, estimates and assumptions
"The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. The following are the key assumptions concerning the future, and other sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adj ustment to the carrying amounts of assets and liabilities in future are:
(i) Defined benefit plans/other Long term employee benefits: The cost of the defined benefit plans and other long term employee benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These includes the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and it long term nature, a defined benefit obligation is highly sensitive in these assumptions. All assumptions are reviewed by the company at each reporting date. The parameters must subject to change in the discount rate. The management considers the interest rate of the government securities based on expected settlement period of various plans.
(ii) Taxes : Uncertainty exist with respect to interpretation of complex tax regulations, changes in tax laws and the amount and timing of future taxable income. The company establishes
provision, based on reasonable estimates. The amount of such provisions is based on various factors such as experience of previous tax auditors and responsible tax authority. Such differences in interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the company. In assessing the recoverability of deferred tax assets, management considers whether it is probable that taxable profit will be available against which the losses can be utilised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. "
NOTE : 29 FAIR VALUES
The Management assessed that the cash and cash equivalents and Current Tax Assets approximate their carrying amounts largely due to the short- term maturities of these instruments.
The fair value of the financial assets and liabilities is 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
Additionally, financial liabilities such as Current Tax Liabilities are not measured at FVTPL, whose carrying amounts approximate fair value, because of their short-term nature.
(i) The Significant unadjusted inputs used in the fair value measurement categorised within level 2 of the fair value hierarchy together with a quantitatives sensitivity analysis as at 31 March 2023 & 31 December 2023 are as shown below.
(iii) Financial instruments not measured at fair value
Financial assets not measured at fair value includes cash and cash equivalents and Current Tax Assets. These are financial assets whose carrying amounts approximate fair value, due to their short-term nature.
Additionally, financial liabilities such asCurrent Tax liabilities are not measured at FVTPL, whose carrying amounts approximate fair value, because of their short-term nature.
NOTE : 30 FAIR VALUE HIERARCHY:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
Level 1 _ Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 _ Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 â Inputs are not based on observable market data (unobservable inputs).
Significant increase in credit risk (SICR)
The Company considers a financial instrument to have experienced a significant increase in credit risk when one or more of the following quantitative, qualitative or backstop criteria have been met:
Quantitative criteria:
When days passed dues from the borrower is more than 30 days but less than 90 days Qualitative criteria:
If the borrower meets one or more of the following criteria:
(i) In short-term forbearance
(ii) Direct debit cancellation
(iii) Extension to the terms granted
(iv) Previous arrears within the last [12] months
Default and credit-impaired assets
The Company defines a financial instrument as in default, which is fully aligned with the definition of credit impaired, when it meets one or more of the following criteria:
Quantitative criteria:
The borrower is more than 90 days past due on its contractual payments.
Qualitative criteria:
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial difficulty. These are instances where:
(i) The borrower is in long-term forbearance
(ii) The borrower is deceased
(iii) The borrower is insolvent
(iv) Concessions have been made by the lender relating to the borrowerâs financial difficulty It is becoming probable that the borrower will enter bankruptcy Measuring ECL - Explanation of inputs, assumptions and estimation techniques
The Expected Credit Loss (ECL) is measured on either a 12-month basis (12M) or Lifetime basis depending on whether a significant increase in credit risk has occurred since initial recognition or whether an asset is considered to be creditimpaired. Expected credit losses are the discounted product of the Probability of Default (PD), Exposure at Default (EAD), and Loss Given Default (LGD), defined as follows:
The PD represents the likelihood of a borrower defaulting on its financial obligation (as per âDefinition of default and credit-impairedâ above), either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.
The exposure at default (EAD) represents the gross carding amount of the financial instruments subject to the impairment calculation, addressing both the clientâs ability to increase its exposure while approaching default and potential early repayments too.
To calculate the EAD for a Stage 1 loan, the Group assesses the possible default events within 12 months for the calculation of the 12mECL.For stage 2, Stage 3 Financial Assets, , the exposure at default is considered for events over the lifetime of the instruments.
Loss Given Default (LGD) represents the Groupâs expectation of the extent of loss on a defaulted exposure. LGD varies by type of counterparty, type and seniority of claim and availability of collateral or other credit support. LGD is expressed as a percentage loss per unit of exposure at the time of default. LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan.
The ECL is determined by projecting the PD, LGD and EAD for each three bucket explained above and for each individual exposure or collective segment. These three components are multiplied together and adjusted for the likelihood of survival (i.e. the exposure has not prepaid or defaulted in an earlier month). This effectively calculates an ECL for each three buckets, which is then discounted back to the reporting date and summed. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.
The Lifetime PD is developed by applying a maturity profile to the current 12M PD. The maturity profile looks at how defaults develop on a portfolio from the point of initial recognition throughout the lifetime of the loans. The maturity profile is based on historical observed data and is assumed to be the same across all assets within a portfolio and credit grade band. This is supported by historical analysis.
The 12-month and lifetime EADs are determined based on the expected payment profile. Estimate of an exposure at a future default date - expected changes in exposure after the reporting date, including repayment of principal and interest, and expected drawdowns on committed facilities. This is based on the contractual repayments owed by the borrower over a 12month or lifetime basis. This will also be adjusted for any expected overpayments made by a borrower. Early repayment / refinance assumptions are also incorporated into the calculation.
The 12-month and lifetime LGDs are determined based on the factors which impact the recoveries made post default. These vary by collateral type.
Forward-looking economic variable / assumptions used are - such as how the maturity profile of the PDs and how collateral values change etc. - are monitored and reviewed on a quarterly basis. There have been no significant changes in estimation techniques or significant assumptions made during the reporting period.
Loss allowance
The loss allowance recognised in the period is impacted by a variety of factors, as described below:
(i) Transfers between Stage 1 and Stages 2 or 3 due to financial instruments experiencing significant increases (or
decreases) of credit risk or becoming credit-impaired in the period, and the consequent âstep upâ between 12-month and Lifetime ECL;
(ii) Additional allowances for financial instruments de-recognised in the period;
(iii) Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the period, arising from regular refreshing of inputs to models;
(iv) Financial assets derecognised during the period and write-offs of allowances related to assets that were written off during the period.
Modification of financial assets
The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed loans, with a view to maximising recovery.
Such restructuring activities include extended payment term arrangements, payment holidays and payment forgiveness. Restructuring policies and practices are based on indicators or criteria which, in the judgement of management, indicate that payment will most likely continue. These policies are kept under continuous review.
The risk of default of such assets after modification is assessed at the reporting date and compared with the risk under the original terms at initial recognition, when the modification is not substantial and so does not result in derecognition of the original asset. The Company monitors the subsequent performance of modified assets. The Company may determine that the credit risk has significantly improved after restructuring, so that the assets are moved from Stage 3 or Stage 2 (Lifetime ECL) to Stage 1 (12-month ECL). This is only the case for assets which have performed in accordance with the new terms for a year or more. Currently there hasnt been any case.
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.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of surplus operating funds or shareholder''s fund. The Company''s policy is to run organisation as a debt free company.
NOTE : 35 ANNEX TO BALANCE SHEET
The Annexure to Balance Sheet in terms of (Non-Banking Financial Company - Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016, has been annexed to Balance Sheet as Annex 1.
NOTE : 36 CAPITAL MANAGEMENT:
The companyâs objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
NOTE : 49 Compliance with approved scheme (s) of arrangements
No scheme of arrangements was required u/s 230 to 237 of the companies Act, 2013 during the year, as such disclosure is not required.
NOTE : 50 Utilisation of borrowed fund & Share Premium
The company has nor advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kinds of funds) to any opther person''s or entities including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary 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 to or on behalf of the ultimate beneficiaries;
The company has nor received any fund from any person''s or entities including foreign entities (Funding Party) 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 company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries;
NOTE : 51 Undisclosed Income
The company has neither surrenderednor disclosed any income during the year in the tax assessments under the Income Tax Act, 1961.
NOTE : 52 Corporate Social Responsibility (CSR)
The Company is not required to comply with CSR requirements.
NOTE : 53 Cryptocurrency or Virtual Currency
The company has neither traded nor invested in cryptocurency or virtual currency as such no dislosure is required.
NOTE : 54 There were no Micro, Small and Medium Enterprises, to whom the Company owed dues, which were outstanding for more than 45 days as at 31st March, 2023. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent, such parties have been identified on the basis of information available with the Company.
NOTE : 55 Previous year''s figures have been regrouped / reclassified and rearranged wherever necessary to correspond with the current year''s classification / disclosure.
Rabindra Kumar Das Arun Agarwal Sunil Kumar Malik IshaAgarwal
Director & CEO CFO Director Company Secretary
DIN: 00233306 PAN: AAGPA1340K DIN:00143453 MNo.:25763
Add:801, Raheha Majestic, Manamala Tank Road, Add:B-702,Ganesh Nagar-2 Add: 159, Gagan Vihar, PAN:AJSPA0893N
Near Star City Cinema, Delhi-110092 East Delhi-110051 Add:C1-1504, Supertech Livingstone
Crossing Republic, ghaziabad-201014
AUDITORâS REPORT
AS PER OUR REPORT OF EVEN DATE ANNEXED FOR M/s T.K. GUPTA & ASSOCIATES CHARTERED ACCOUNTANTS FIRM REGN NO. 011604N
PLACE : NEW DELHI Dated: 25-05-2023
CA. KRITI BINDAL (PARTNER)
M.NO. 516627
Mar 31, 2018
1 Corporate Overview
Akashdeep Metal Industries Limited is a Limited Company domiciled in India and incorporated under the provisions of the companies act, 1956. The Company is a registered NBFC with RBI.
- Depreciation on fixed assets is provided on W.D.V. method at the rates specified in Companies Act, 2013 and made adjustments according to it.
- Depreciation on addition of fixed assets is provided on pro rata basis from the date, the assets is ready to use.
- Useful life of Furniture & Fixture is 15 years instead of 10 years as prescribed in part C of Schedule-II of the Companies Act, 2013.
- Useful life of Computer & Printer is 6 years instead of 3 years as prescribed in part C of Schedule-II of the Companies Act, 2013.
- Depreciation on ownership rights of resorts is charged as per useful life of the asset i.e. 99 years. Depreciation is charged for 23 years.
- Figures in bracket pertain to previous year.
Note 2: Defined benefit plans
The Company does not recognise its liability for ''Gratuity'' and ''Leave encashment'' on the basis as prescribed in AS-15 Employee Benefits. The company provides for the actual liability (if any) or recognises as expense when such Gratuity or Leave encashment is paid to the employee.
Note 3: Segment reporting
The disclosures on primary segment as required under Accounting Standard 17 on ''Segment Reporting'' has not been provided as the Company has only a single reportable segment and exclusively operates in the business of "sale/purchase of shares". Further, disclosures in the secondary segment i.e., geographical segment, has not been provided as the company operates only in India.
Being a Non banking finance company not accepting public deposits. Management of the company has confirmed the following:
1) The Board of Directors has passed a resolution for the non acceptance of any public deposit.
2) The company has complied with the prudential norms relating to income recognition, accounting standards, assets, classification, and provisioning for bad debts as applicable.
3) The Board has transferred an amount of Rs. 2,19,872/- for current year towards âSpecial Reserve Account â and the same has been shown under the head Special Reserve Account under Note No. 4 of Reserve and Surplus, as per the requirement under section 45-IC of the Reserve Bank of India Act, 1934. i.e. 20% of Profit after Tax.
4) As per the prudential norms on Income Recognition, Asset Classification with reference to Master Circular No. DNBR (PD) CC.No.043/03.10.119/2015-16 dated July 1, 2015. The Board has transferred an amount of Rs. 55,466/- towards âContingent provision against Standard Assetsâ i.e. 0.40% of standard assets.
- Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Non-Deposit Accepting or holding) Companies Prudential Norms (Reserve Bank ) Direction, 2007.
All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of Unquoted investments should be disclosed irrespective of whether they are classified as long term or current (4) above.
In the opinion of the Board the value of Current assets, Loans & advances, if realized in the ordinary courses of business, shall not be less than the amount at which the same are stated in the Balance Sheet. Confirmation of balances have not been received from debtors, creditors, loans and advances given through request was sent to major parties and therefore balances are as per books of accounts only.
Note 4: Grouping and classification
Figures of the previous year have been rearranged wherever necessary to them comparable with the current year''s classification.
Mar 31, 2014
1. In the opinion of the management the current assets, loans and
advances are approximately of the value stated if realized in the
ordinary course of business. The provisions for all the known
liabilities are adequate and not in excess of the amount considered
reasonably necessary.
2. Previous year figures have been re-grouped or re-arranged wherever
necessary.
3. Note 1 to 20 are annexed to and from an integral part of the
Balance Sheet as at 31st March 2014 and Statement of Profit & Loss for
the year ended as on that date.
Notes:
(1) Provisioning norms shall be applicable as prescribed in the
Non-Banking Financial (Non-Deposit Accepting or holding) Companies
Prudential Norms (Reserve Bank ) Direction, 2007.
(2) All Accounting Standards and Guidance Notes issued by ICAI are
applicable including for valuation of investments and other assets
acquired in satisfaction of debt. However, market value in respect of
quoted investments and break up/fair value/NAV in respect of Unquoted
investments should be disclosed irrespective of whether they are
classified as long term or current (4) above.
Mar 31, 2013
1. In the opinion of the management the current assets, loans and
advances are approximately of the value stated if realized in the
ordinary course of business. The provisions for all the known
liabilities are adequate and not in excess of the amount considered
reasonably necessary.
2. Previous year figures have been re-grouped or re-arranged wherever
necessary.
Mar 31, 2011
1. Related party disclosures as required by Accounting Standard-18
issued by the Institute of Chartered Accountants of India.
a) Parties where control exists
Mr. Surendra Kumar Jain along with his relatives.
b) Enterprises over which major shareholder or key management personnel
along with his relatives exercises significant influence _
Asia Capital Limited
Deepak & Company
D.M. International Pvt. Ltd.
Transcend Electronics Pvt. Ltd.
Competent Electronics Pvt. Ltd.
Rose Electronics Pvt. Ltd.
Petal Electronics Pvt. Ltd.
Novelty Electricals Pvt. Ltd.
Sandal Auto Pvt. Ltd.
Posh Electronics Pvt. Ltd.
Shree Ganpati Educational Society (Regd.)
c) Key Management Personnel
Mr. Surendra Kumar Jain, Managing Director
Accounting policies & notes forming part of balance sheet as at 31st
March 2011 Schedule "H"
d) Relatives of key Managerial personnel
Details of relatives of Mr. Surendra Kumar Jain
Mr. Deepak Kumar Jain Son
Mr. Manoj Kumar Jain Son
Mrs. Alka Jain Daughter
Mrs. Sangeeta Agarwal Daughter
Mr. Dinesh Kumar Jain Brother
Mr. Navneet Kumar Jain Brother
Mrs. Sulochna Jain Sister
Mrs. Sudha Jain Sister
2. Since the Company''s operations primarily comprise of investment
and financing, as such there is no other reportable segment as
specified by Accounting Standard-17 issued by Institute of Chartered
Accountants of India.
3. The Company has not received any intimation from supplier
regarding their status under Micro/Small & Medium Enterprises
Development Act, 2006 and hence disclosure if any relating amount
unpaid as at year end together with interest paid/payable as required
under the Act have not been given.
4. Schedule "A" to "H" form as integral part of Balance Sheet, Profit
and Loss Account and Cash Flow Statement.
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