Accounting Policies of Manba Finance Ltd. Company

Mar 31, 2025

5. SIGNIFICANT ACCOUNTING POLICIES
a| Financial Instruments

I. Recognition and Initial Measurement

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability
or equity instrument of another entity. All financial
assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables
(without a significant financing component) which
are initially recognized at transaction price.

Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities, which are not at fair value through profit
or loss, are added to or deducted from the fair value
of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at fair value through
profit and loss are recognized immediately in profit
and loss.

II. Financial Assets

i. Classification of financial assets

Classification and measurement of financial assets
depends on the results of the business model test
and the Solely Payments of Principal and Interest
(''SPPI'').

Business Model Test: The Company determines the
business model at a level that reflects how Company''s
financial assets are managed together to achieve
a particular business objective. This assessment
includes judgement reflecting all relevant evidence
including how the performance of the assets is
evaluated and their performance measured, the
risks that affect the performance of the assets and
how these are managed and how the managers of
the assets are compensated. The Company monitors
financial assets measured at amortized cost or fair
value through other comprehensive income that are
derecognized prior to their maturity to understand
the reason for their disposal and whether the
reasons are consistent with the objective of the
business for which the asset was held. Monitoring

is part of the Company''s continuous assessment of
whether the business model for which the remaining
financial assets are held continues to be appropriate
and if it is not appropriate whether there has been
a change in business model and so a prospective
change to the classification of those assets.

The Solely Payments of Principal and Interest (SPPI)
test as a second step of its classification process,
the Company assesses the contractual terms of
financial assets to identify whether they meet the
SPPI test. ''Principal'' for the purpose of this test is
defined as the fair value of the financial asset at
initial recognition and may change over the life of the
financial asset (for example, if there are repayments
of principal or amortization of the premium/
discount). In making this assessment, the Company
considers whether the contractual cash flows are
consistent with a basic lending arrangement i.e.
interest includes only consideration for the time
value of money, credit risk, other basic lending
risks and a profit margin that is consistent with a
basic lending arrangement. Where the contractual
terms introduce exposure to risk or volatility that are
inconsistent with a basic lending arrangement, the
related financial asset is classified and measured at
fair value through profit or loss.

Basis the above tests for purposes of subsequent
measurement, financial assets are classified in
three categories:

• Financial asset at amortized cost

• Financial asset at fair value through other
comprehensive income (FVTOCI)

• Financial assets at fair value through profit and
loss (FVTPL)

Amortized Cost

A financial asset that meets the following conditions
is subsequently measured at amortized cost (except
for financial asset that are designated as at fair
value through profit or loss on initial recognition):

• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and

• The contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

Fair value through other comprehensive income
[FVTOCI]

Financial assets that meet the following conditions
are subsequently measured at fair value through
other comprehensive income (except for financial

asset that are designated as at fair value through
profit or loss on initial recognition):

• t he asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling financial
assets; and

• The contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

On initial recognition of an equity investment
that is not held for trading, the Company may
irrevocably elect to present subsequent changes
in the investment''s fair value in OCI. This election
is made on an investment-by-investment basis.
The Company does not have any financial assets
measured at FVTOCI.

Financial assets at fair value through profit or loss
[FVTPL]

Financial assets that do not meet the amortized
cost criteria or FVTOCI criteria (see above) are
measured at FVTPL. In addition, financial assets
that meet the amortized cost criteria or the FVTOCI
criteria may irrevocably be designated as at FVTPL
are measured at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that
would otherwise arise.

ii. Impairment of financial assets

The Company applies the expected credit loss
model for recognizing impairment loss on financial
assets measured at amortized cost. The amount of
expected credit losses is updated at each reporting
date to reflect changes in credit risk since initial
recognition of the respective financial instrument.

The expected credit losses on these financial assets
are estimated based on the Company''s historical
credit loss experience as well as data from peer
groups, adjusted for factors that are specific to
the debtors, general economic conditions and an
assessment of both the current as well as the
forecast direction of conditions at the reporting
date, including time value of money and management
overlay where appropriate.

The Company applies a three-stage approach
to measure ECL on loan assets. The underlying
receivables of borrowers migrate through the
following three stages based on the change in credit
quality since initial recognition

Stage 1

For exposures where there has not been a significant
increase in credit risk since initial recognition and

that are not credit impaired upon origination, the
portion of the lifetime ECL associated with the
probability of default events occurring within the
next 12 months is recognized. Exposures with days
past due (DPD) less than or equal to 30 days are
classified as stage 1.

Stage 2

For credit exposures where there has been a
significant increase in credit risk since initial
recognition but that are not credit impaired, a
lifetime ECL is recognized. Exposures with DPD
range of 31-90 days are classified as stage 2. At
each reporting date, the Company assesses whether
there has been a significant increase in credit risk
for underlying loan assets since initial recognition
by comparing the risk of default occurring over the
expected life between the reporting date and the
date of initial recognition.

Stage 3

Loan asset is assessed as credit impaired when one
or more events that have a detrimental impact on
the estimated future cash flows of that asset have
occurred. For loan assets that have become credit
impaired, a lifetime ECL is recognized on principal
outstanding as at period end. Exposures with DPD
equal to or more than 90 days are classified as
stage 3.

Significant increase in credit risk

For loan assets, the date that the Company becomes
a party to the contract with borrowers is considered
to be the date of initial recognition for the purposes
of assessing the financial instrument for impairment.

In assessing whether there has been a significant
increase in the credit risk since initial recognition of
a loan asset, the Company considers the changes
in the risk that the specified borrower will default
on the contract. The Company compares the risk
of a default occurring on the loan asset as at the
reporting date with the risk of a default occurring
on the loan asset as at the date of initial recognition
and considers both quantitative and qualitative
information that is reasonable and supportable,
including historical experience and forward- looking
information that is available without undue cost
or effort.

The definition of default for the purpose of
determining ECLs has been aligned to the Reserve
Bank of India definition of default, which considers
indicators that the borrower is unlikely to pay and
is no later than when the exposure is equal to or
more than 90 days past due. If one facility of the
borrower is classified as Stage 3, all the facilities of
that borrower are treated as Stage 3.

Measurement and recognition of expected credit
losses

The measurement of all expected credit losses for
loan assets held at the reporting date are based
on historical experience, current conditions,
and reasonable and supportable forecasts. The
measurement of expected credit losses is a function
of the probability of default (PD), loss given default
(LGD) (i.e. the magnitude of the loss if there is a
default) and the exposure at default (EAD). The
measurement of ECL involves increased complexity
and judgement, including estimation of PDs, LGD,
a range of unbiased future economic scenarios,
estimation of expected lives and estimation of EAD,
management overlay and assessing significant
increases in credit risk. The assessment of the
probability of default and loss given default is
based on historical data adjusted by forward-looking
information. As for the exposure at default, for
financial assets, this is represented by the assets''
gross carrying amount at the reporting date; for
loan assets, the exposure includes the amount
outstanding as at the reporting date, together with
expected drawdowns on committed facilities (if any)
in the future by default date determined based on
historical trend, the Company''s understanding of the
specific future financing needs of the borrowers, and
other relevant forward-looking information.

The Elements of ECL: The Company calculates
ECLs based on probability weighted scenarios to
measure the expected cash shortfalls, discounted
at an approximation to the EIR. A cash shortfall is
the difference between the cash flows that are
due to the Company and the cash flows that the
Company expects to receive. The mechanics of the
ECL calculations are outlined below and the key
elements are, as follows:

Probability of Default (PD) - The Probability of Default
is an estimate of the likelihood of default over a
given time horizon. A default may only happen at a
certain time over the assessed period, if the facility
has not been previously derecognized and is still in
the portfolio.

a) The Company has applied 12 months PD to
Stage 1 Advances

b) The Lifetime PD is computed using basic
exponentiation technique after considering
the residual maturity of the respective loan for
Stage 2 Advances.

c) PD of 100% is considered for Stage 3 Advances.

Exposure at Default (EAD) - EAD is taken as the
gross exposure under a facility upon default of an
obligor. The amortized principal and the interest
accrued is considered as EAD for the purpose of
ECL computation

Loss Given Default (LGD) - The Loss Given Default
is an estimate of the loss arising in the case where
a default occurs at a given time. It is based on the
difference between the contractual cash flows due
and those that the lender would expect to receive,
including from the realization of any collateral. It is
usually expressed as a percentage of the EAD.

The Company recognizes an impairment gain or loss
in profit or loss for all financial instruments with a
corresponding adjustment to their carrying amount
through a loss allowance account, except for
investments in debt instruments that are measured
at FVTOCI, for which the loss allowance is recognized
in other comprehensive income and accumulated in
a separate component of equity wherein fair value
changes are accumulated, and does not reduce
the carrying amount of the financial asset in the
balance sheet.

In its ECL models, the Company relies on a broad range
of forward-looking macro parameters and estimated
the impact on the default at a given point of time.
The Company regularly monitors the effectiveness
of the criteria used to identify whether there has
been a significant increase in credit risk and revises
them as appropriate to ensure that the criteria are
capable of identifying significant increase in credit
risk before the amount becomes past due.

iii. De-recognition of financial assets

The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another party. If the
Company neither transfers nor retains substantially
all the risks and rewards of ownership and continues
to control the transferred asset, the Company
recognizes its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the Company retains substantially all the risks
and rewards of ownership of a transferred financial
asset, the Company continues to recognize the
financial asset and also recognizes a collateralized
borrowing for the proceeds received.

De-recognition due to modification of terms
and conditions

The Company de-recognizes a financial asset, when
the terms and conditions have been renegotiated
to the extent that, substantially it becomes a
new loan, with the difference recognized as a
derecognition gain or loss, to the extent that an
impairment loss has not already been recognized. If
the modification does not result in cash flows that
are substantially different, the modification does
not result in derecognition. Based on the change
in cash flows discounted at the original EIR, the

Company recognize a modification gain or loss, to
the extent that an impairment loss has not already
been recognized.

III. Financial liabilities and equity instruments

i. Classification as debt or equity

Debt and equity instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

ii. Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
issued by the Company are recognized at the
proceeds received, net of direct issue costs.

iii. Financial liabilities

Financial liabilities are subsequently carried at
amortized cost using the effective interest method,
except for contingent consideration recognized in a
business combination (if any) which is subsequently
measured at fair value through profit or loss. The
carrying amounts of financial liabilities that are
subsequently measured at amortized cost are
determined based on the effective interest method.

The effective interest method is a method of
calculating the amortized cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

iv. De-recognition of financial liabilities

The Company derecognizes financial liabilities
when, and only when, the Company''s obligations
are discharged, cancelled or have expired. An
exchange with a lender of debt instruments with
substantially different terms is accounted for as
an extinguishment of the original financial liability
and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of
an existing financial liability (whether attributable to
the financial difficulty of the debtor) is accounted for
as an extinguishment of the original financial liability
and the recognition of a new financial liability. The
difference between the carrying amount of the

financial liability derecognized and the consideration
paid and payable is recognized in profit or loss.

v. Offsetting

Financial assets and financial liabilities are offset,
and the net amount presented in the balance
sheet when, and only when, the Company currently
has a legally enforceable right to set off the
amounts and it intends either to settle them on
a net basis or to realize the asset and settle the
liability simultaneously.

vi. Write offs

The gross carrying amount of a financial asset is
written off when there is no realistic prospect of
further recovery. This is generally the case when
the Company determines that the debtor/ borrower
does not have assets or sources of income that
could generate sufficient cash flows to repay the
amounts subject to the write-off. However, financial
assets that are written off could still be subject
to enforcement activities under the Company''s
recovery procedures, considering legal advice where
appropriate. Any recoveries made against or from
written off assets are recognized in Statement of
profit and loss.

b| Revenue Recognition

Revenue is recognized to the extent it is probable that
the economic benefits will flow to the Company and the
revenue can be reliably measured. However, where the
ultimate collection of revenue lacks reasonable certainty,
revenue recognition is postponed.

Revenue is recognized by allocating the transaction
price, net of variable consideration, to the performance
obligations. Variable considerations include discounts
and schemes offered as part of the contract. The net
transaction price for each obligation represents the
revenue recognized for its satisfaction.

i. Interest income

Interest income is recognized in Statement of profit
and loss using the effective interest method for
all financial instruments measured at amortized
cost. The ''effective interest rate'' is the rate that
exactly discounts estimated future cash payments
or receipts through the expected life of the financial
instrument to the gross carrying amount of the
financial assets.

The calculation of the effective interest rate includes
transaction costs and fees that are an integral part
of the contract. The Company recognizes interest
income using a rate of return that represents the
best estimate of a constant rate of return over the
expected life of the loan. Hence, it recognizes the

effect of potentially different interest rates charged
at various stages, and other characteristics of the
product life cycle (including prepayments, penalty
interest and charges). Transaction costs include
incremental costs that are directly attributable to
the acquisition of financial asset.

If expectations regarding the cash flows on the
financial asset are revised for reasons other than
credit risk, the adjustment is recorded as a positive
or negative adjustment to the carrying amount of
the asset in the balance sheet with an increase
or reduction in interest income. The adjustment is
subsequently amortized through Interest income in
the Statement of profit and loss.

The Company calculates interest income by applying
the EIR to the gross carrying amount of financial
assets other than credit-impaired assets.

For credit-impaired financial assets the interest
income is calculated by applying the EIR to the
amortized cost of the credit-impaired financial
assets (i.e. the gross carrying amount less the
allowance for expected credit losses.

ii. Interest income on deposits with banks

Interest income from deposits with banks is
recognized on time proportion basis taking into
account the outstanding amount and the applicable
rate of interest.

iii. Net gain/loss on fair value changes

Any differences between the fair values of financial
assets classified as fair value through the profit or
loss, held by the Company on the balance sheet
date is recognized as an unrealized gain/loss. In
cases there is a net gain in the aggregate, the same
is recognized in "Net gains on fair value changes"
under Revenue from operations and if there is a net
loss the same is disclosed under "Expenses - Net
Loss on fair value changes" in the statement of profit
and loss.

Similarly, any realized gain or loss on sale of financial
instruments measured at FVTPL is recognized in net
gain / loss on fair value changes.

iv. Loan Processing Fees

Processing fees on loans is collected towards
processing of loan, this is amortized on EIR basis
over the contractual life of the loan. Related cost
incurred towards processing of loans is netted off
against loan processing fees.

v. Fee Income

Fees and commissions are recognized when the
Company satisfies the performance obligation, at
fair value of the consideration received or receivable.

Foreclosure charges are collected from loan
customers for early payment/ closure of loan and
are recognized on realization. Initial money Deposit
charges are collected from customers for document
processing, which is non-refundable in the nature.
Initial money Deposit charges are recognized in
statement of profit and loss as fee income using
EIR method on disbursed cases. On non-disbursed
cases, it is taken to statement of profit and loss
on realization.

vi. Other operational revenue

Other operational revenue represents income earned
from the activities incidental to the business and is
recognized when the right to receive the income is
established as per the terms of the contract.

c| Employee benefits

The Company''s employee benefits mainly include salaries
and bonuses, defined contribution plans (i.e. provident
funds and employee state insurance scheme), defined
benefits plans (i.e. gratuity) and other long-term employee
benefits (i.e. compensated absences). The employee
benefits are recognized in the year in which the associated
services are rendered by the Company employees.

I. Short-term employee benefits

A liability is recognized for short-term employee
benefits accruing to employees in respect of
salaries, short term compensated absences,
performance incentives etc. in the period the related
service is rendered at the undiscounted amount of
the benefits expected to be paid in exchange for
that service.

Accumulated leave, which is expected to be utilized
within the next twelve months, is treated as short¬
term employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date.

II. Post-Employment Employee Benefits

i. Defined contribution plans

The contributions to defined contribution plans are
recognized in profit or loss as and when the services
are rendered by employees. The Company has no
further obligations under these plans beyond its
periodic contributions.

ii. Defined benefits plans

For defined benefit plans, the cost of providing
benefits is determined using the projected unit
credit method, with actuarial valuations being
carried out at the end of each annual reporting

period. Remeasurement, comprises actuarial gains
and losses which is reflected immediately in the
balance sheet with a charge or credit recognized in
other comprehensive income in the period in which
they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit
or loss. Past service cost is recognized in profit
or loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate
at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are
categorized as follows:

• service cost (including current service cost,
past service cost, as well as gains and losses
on curtailments and settlements);

• net interest expense or income; and

• remeasurement

III. Other Long-term employee benefits

The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
long-term employee benefit for measurement
purposes. Such long-term compensated absences
are provided for based on the actuarial valuation
using the projected unit credit method at the year-
end. Actuarial gain/loss are immediately taken to the
statement of profit and loss and are not deferred.

IV. Share-based payments

Employees of the Company also receive remuneration
in the form of share-based payment transactions
under Company''s Employee stock option plan (ESOP)-
2020.

The grant date fair value of equity settled share-
based payment awards granted to employees
is recognized as an employee expense, with a
corresponding increase in equity, over the period
that the employees unconditionally become entitled
to the awards. The amount recognized as expense is
based on the estimate of the number of awards for
which the related service conditions are expected to
be met, such that the amount ultimately recognized
as an expense is based on the number of awards
that do meet the related service conditions at the
vesting date.

d| Finance costs

Finance costs on borrowings is paid towards availing of
loan, is amortized on EIR basis over the contractual life of
loan. The EIR in case of a financial liability is computed:

a. As the rate that exactly discounts estimated future
cash payments through the expected life of the
financial liability to the gross carrying amount of
the amortized cost of a financial liability.

b. By considering all the contractual terms of the
financial instrument in estimating the cash flows

c. I ncluding all fees paid between parties to the
contract that are an integral part of the effective
interest rate, transaction costs, and all other
premiums or discounts.

e| Leases

The Company''s leased assets primarily consist of leases
for office Space. The Company assesses whether a
contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether: (I)
the contract involves the use of an identified asset (ii) the
Company has substantially all of the economic benefits
from use of the asset through the period of the lease
and (iii) the Company has the right to direct the use of
the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value
leases. For these short-term and low value leases, the
Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease
or another systematic basis.

Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes periods covered
by extension options when it is reasonably certain that
they will be exercised and includes periods covered by
termination options when it is reasonably certain that
they will not be exercised.

The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses. Right-of-use assets are depreciated
from the commencement date on a straight-line basis
over the shorter of the lease term and useful life of the
underlying asset unless the lease transfers ownership
of the underlying asset to the Company by the end of
the lease term or the cost of the right-of-use asset
reflect that the Company exercise a purchase option.
The Company applies Ind AS 36 to determine whether a
ROU asset is impaired and accounts for any identified
impairment loss as described in the accounting policy
below on "Impairment of non- financial assets".

The lease liability is initially measured at amortized
cost at the present value of the future lease payments
that are not paid at the commencement date. The lease
payments are discounted using the interest rate implicit
in the lease or, if not readily determinable, using the
Company''s incremental borrowing rates. Lease liabilities
are remeasured with a corresponding adjustment to
the related right of use asset (or in profit or loss if the
carrying amount of the right-of-use asset has been
reduced to zero) if the Company changes its assessment
whether it will exercise an extension or a termination or a
purchase option.

The interest cost on lease liability (computed using
effective interest method), is expensed off in the
statement of profit and loss. Lease liability and ROU asset
have been separately presented in the Balance Sheet and
lease payments have been classified as financing cash
flows. The Company accounts for each lease component
within the contract as a lease separately from non-lease
components of the contract in accordance with Ind AS 116
and allocates the consideration in the contract to each
lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand¬
alone price of the non-lease components.

f| Property, plant, and equipment |PPE|

Recognition and measurement

Property, plant and equipment are stated in the
balance sheet at cost less accumulated depreciation
and accumulated impairment losses. When significant
parts of property, plant and equipment are required to
be replaced at intervals, the Company depreciates then
separately based on their specific useful lives.

Cost of an item of property, plant and equipment
comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade
discounts and rebates, any directly attributable cost of
bringing the item to its working condition for its intended
use and estimated costs of dismantling and removing
the item and restoring the site on which it is located. The
cost of a self- constructed item of property, plant and
equipment comprises the cost of materials and direct
labor, any other costs directly attributable to bringing
the item to working condition for its intended use, and
estimated costs of dismantling and removing the item and
restoring the site on which it is located. Cost includes,
for qualifying assets, borrowing costs capitalized in
accordance with the Company''s accounting policy. Such
properties are classified to the appropriate categories of
property, plant and equipment when completed and ready
for intended use. Depreciation of these assets, on the
same basis as other property assets, commences when
the assets are ready for their intended use.

Subsequent costs relating to an item of Property, Plant
and Equipment are recognized in the carrying amount of
the item if the recognition criteria are met.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date are disclosed separately under other
non-financial assets.

Depreciation

Depreciation is calculated using the straight line
method to write down the cost of property and
equipment to their residual values over their
estimated useful lives as specified under schedule II
of the Companies Act, 2013. Land is not depreciated.

The estimated useful lives used for computation of
depreciation are as follows:

The useful lives, residual values and depreciation
method of property, plant and equipment are
reviewed, and adjusted appropriately, at-least as
at each financial year end so as to ensure that the
method and period of depreciation are consistent
with the expected pattern of economic benefits from
these assets. Depreciation is provided on a pro-rata
basis from the date on which such asset is ready for
its intended use.

The effect of any change in the estimated useful
lives, residual values and /or depreciation method
are accounted prospectively, and accordingly the
depreciation is calculated over the property, plant
and equipment''s remaining revised useful life.

An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. The gain or loss
arising on the disposal or retirement of an asset
is determined as the difference between the sales
proceeds and the carrying amount of the asset and
is recognized in profit or loss.

g| Intangible assets

I ntangible assets are recognized when the Company
controls the asset, it is probable that future economic
benefits attributed to the asset will flow to the Company
and the cost of the asset can be measured reliably.

The intangible assets are initially recognized at cost.
These assets having finite useful life are carried at cost
less accumulated amortization and any impairment
losses. Amortization is computed using the straight-line
method over the expected useful life of intangible assets.

The estimated useful lives and amortization method are
reviewed, and adjusted appropriately, at least at each
financial year end so as to ensure that the method and
period of amortization are consistent with the expected
pattern of economic benefits from these assets. The
effect of any change in the estimated useful lives and/
or amortization method is accounted for prospectively,
and accordingly the amortization is calculated over the
remaining revised useful life.

An intangible asset is derecognized on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, and are recognized in profit or loss when the asset
is derecognized.

| Capital work-in-progress (CWIP|

Capital Work in Progress (CWIP) of intangible assets refers
to the costs incurred on the acquisition or development of
intangible assets that are not yet ready for their intended
use. Such costs are capitalized until the intangible assets
are ready for use. CWIP of intangible assets are capitalized
if they meet the following criteria:

• The Company has control over the asset or rights to it

• It is probable that the future economic benefits
associated with the asset will flow to the Company

• The cost of the asset can be reliably measured

Impairment of non-financial assets

At the end of each reporting period, the Company reviews
the carrying amounts of its assets to determine whether
there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be
less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment
loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the
carrying amount that would have been determined had
no impairment loss been recognized for the asset in prior

years. A reversal of an impairment loss is recognized
immediately in profit or loss.

---

Mar 31, 2024

1 Corporate Information

The Company is a registered non-banking finance company engaged in the business of providing finance. The Company is registered with the Reserve Bank of India as a Non-Banking Finance Company (NBFC) with effect from 07-04-1998, with Registration No. 13.00610. The Company primarily deals in the financing of New 2Ws, 3Ws, EV2Ws, EV3Ws, Personal loan, Used Car Loan and Business Loan. The Company is having its head office at Mumbai and currently having 65 locations as on 31^st March 2024. Financial Statements were subject to review and recommendation of the Audit Committee and approval of the Board of Directors. On 25 May 2024, the Board of Directors of the Company approved and recommended the financial statements for consideration and adoption by the shareholders in its Annual General Meeting.

2 Basis of Preparation

2.1 Statement of compliance

The financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. In addition, the guidance notes/ announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied along with compliance with other statutory promulgations require a different treatment.

2.2 Basis of preparation

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period. Fair value measurements under Ind AS are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety.

Change in Accounting Policy for Amortization of Dealer Commissions and Associated Costs

"In the course of our financial review and in compliance with Ind AS 115 on Revenue Recognition, we have retrospectively adjusted our accounting policy for the recognition of dealer commissions, dealer incentives, and processing fees to dealers. This change is in accordance with IndAS 8, which requires changes in accounting policies and corrections of prior period errors to be carried out retrospectively. Pursuant to paragraph 19 of IndAS 8, the entity has accounted for this change in accounting policy retrospectively, as there are no specific transitional provisions applying to this change within IndAS 115. Consequently, the opening balances of affected components of equity for the earliest prior period presented and other comparative amounts have been adjusted as if the new accounting policy had always

been applied, in accordance with paragraph 22 of IndAS 8. The table below presents the opening financial impact of Equity and Disbursement payable under other financial liabilities, in a manner that reflects the systematic allocation of these costs over the average tenure of the loans, determined to be 27 months: "

(C In Lakh)
Opening Balance of Other Equity as on April 1, 2023 (without considering the effect of change in accounting policy)	15423.46
Increase/(decrease) due to change in accounting policy	400.25
Opening Balance of Other Equity as on April 1, 2023 (after considering the effect of change in accounting policy)	15823.71
Opening Balance of Disbursement Payable under Other Financial Liabilities as on April 1, 2023 (without considering the effect of change in accounting policy)	926.23
Increase/(decrease) due to change in accounting policy	400.25
Opening Balance of Disbursement Payable under Other Financial Liabilities as on April 1, 2023 (after considering the effect of change in accounting policy)	525.98

The adoption of this change in accounting policy, ensures the financial statements more accurately reflect the economic reality of the Company''s financial transactions over the loan period. It provides users of the financial statements with reliable and relevant information about the effects of transactions, other events, or conditions on the Company''s financial position, financial performance, and cash flows. The effect of this change on future periods is expected to continue to reflect the amortization of these costs over the tenure of the loans. This note is intended to provide full disclosure in accordance with IndAS 8 and should be read in conjunction with the rest of the financial statements.

2.3 Functional and presentation currency

The financial statements are presented in Indian Rupees (C) which is the currency of the primary economic environment in which the Company operates (the ''functional currency).

2.4 Use of estimates, judgements and assumptions

The preparation of the financial statements in conformity with Ind AS requires 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. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Following are the areas that involved a higher degree of estimates and judgement or complexity in determining the carrying amount of some assets and liabilities.

i| Fair value of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values.

ii| Effective interest rate (''EIR'') method

The Company''s EIR methodology, as explained in Note 3.1(A), recognises interest income / expense using a rate of return that represents the best estimate of a constant rate of return over the expected behavioural life of loans given / taken and recognises the effect of potentially different interest rates at various stages. This estimation, by nature, requires an element of judgement regarding the expected behaviour and life-cycle of the instruments, as well as expected changes to interest rates and other fee income/ expense that are integral parts of the instrument.

iii| Impairment of financial asset

The measurement of impairment losses across all categories of financial assets requires judgement, in particular, the estimation of the amount and timing of future cash flows and collateral values when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven by a number of factors, changes in which can result in different levels of allowances. The Company''s expected credit loss (ECL) calculations are output of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements

of the ECL models that are considered accounting judgements and estimates include:

a) The Company''s criteria for assessing if there has been a significant increase in credit risk and so allowances for financial assets should be measured on a life time expected credit loss (''LTECL'') basis.

b) Development of ECL models, including the various formulas and the choice of inputs.

c) Determination of associations between macroeconomic scenarios and economic inputs as gross domestic products, and the effect on probability of default (PD), exposure at default ("EAD) and loss given default (''LGD'')."

d) Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into ECL models

iv) Provisions and other contingent liabilities

The Company operates in a regulatory and legal environment that, by nature, has a heightened element of litigation risk inherent to its operations.

When the Company can reliably measure the outflow of economic benefits in relation to a specific case and considers such outflows to be probable, the Company records a provision against the case. Where the outflow is considered to be probable, but a reliable estimate cannot be made, a contingent liability is disclosed.

Given the subjectivity and uncertainty of determining the probability and amount of losses, the Company takes into account a number of factors including legal advice, the stage of the matter and historical evidence from similar incidents. Significant judgement is required to conclude on these estimates.

These estimates and judgements are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable.

2.5 Presentation of the financial statements

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Division III to Schedule III to the Companies Act, 2013 ("the Act") applicable for Non-Banking Finance Companies ("NBFC"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified

accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

3.1 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured and there exists reasonable certainty of its recovery. Revenue is measured at the fair value of the consideration received or receivable as reduced for estimated customer credits and other similar allowances.

A. Interest and dividend income

Interest income for all financial instruments except for those classified as held for trading or those measured or designated as at fair value through profit or loss (FVTPL) are recognised in ''Interest income'' in the profit or loss account using the effective interest method (EIR).

Effective Interest Rate (EIR) wherever applicable in case of a financial asset is computed as the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. It is computed by considering all contractual terms of the financial instrument in estimating the cash flows. The cash flows are estimated Including all fees and points paid or received between parties to the contract that are incremental and directly attributable to the specific lending arrangement, transaction costs, and all other premiums or discounts. For financial assets at FVTPL transaction costs are recognised in profit or loss at initial recognition.

Interest income is recognised by applying the Effective Interest Rate (EIR) to the gross carrying amount of financial assets other than credit-impaired assets and financial assets classified as measured at FVTPL. Interest Income on credit impaired assets are treated to accrue only upon realisation, due to uncertainty involved in its realisation and are accounted accordingly.

I ncome on NPA where interest/ principal has become overdue for more than 3 months is recognized as and when received and appropriated. Any such income recognized before the assets become non performing and remaining unrealized is reversed

Dividend income is recognised when the Company''s right to receive dividend is established by the reporting date and no significant uncertainty as to collectability exists

B. Fee and commission income

Fee and commission income and expense include fees other than those that are an integral part of EIR. Processing fees not considered in EIR, NACH charges, Processing Fees, Documentation fees, service income, bounce charges, penal charges and foreclosure charges, etc. are recognised on point in time basis.

Further, Disbursement income deferred over loan period

C. Net gain or fair value change

Any differences between the fair values of the financial assets classified as fair value through the profit or loss, held by the Company on the balance sheet date is recognised as an unrealised gain/loss in the statement of profit and loss. In cases there is a net gain in aggregate, the same is recognised in "Net gains or fair value changes" under revenue from operations and if there is a net loss the same is disclosed "Expenses", in the statement of profit and loss if any.

D. Other operational revenue

Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract.

3.2 Financial instrument - initial recognition

A. Date of recognition

Debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

B. Initial measurement of financial instruments

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss

3.3 Financial assets and liabilities A| Financial assets

Business model assessment

The Company determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective. The Company''s business model is not assessed on an instrument-byinstrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

a) How the performance of the business model and the financial assets held within that business model are evaluated and reported to the Company''s key management personnel.

b) The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed.

c) The expected frequency, value and timing of sales are also important aspects of the Company''s assessment.

The business model assessment is based on reasonably expected scenarios without taking worst case'' or stress case'' scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

Solely payments of principal and interest (SPPI) test As a second step of its classification process, the Company assesses the contractual terms of financial to identify whether they meet SPPI test. ''Principal'' for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of financial asset (for example, if there are repayments of principal or amortisation of the premium/ discount)

The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers relevant factors such as the period for which the interest rate is set. In contrast, contractual terms that introduce a more than de-minimise exposure to risks or volatility in the contractual cash flows that are unrelated to a basic tending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

Accordingly, financial assets are measured as follows i| Financial assets carried at amortised cost |''AC''|

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

ii| Financial assets measured at FVOCI

A financial asset is measured at FVOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms

of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

iii) Financial assets measured at FVTPL

A financial asset which is not classified in any of the above categories are measured at FVTPL.

B| Financial liabilities

i) Initial recognition and measurement Financial liabilities are classified and measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for trading or it is designated as on initial recognition.

ii| Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. The EIR amortization is included as finance costs in the statement of profit and loss.

3.4 Reclassification of financial assets and liabilities

The Company does not reclassify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances in which the Company acquires, disposes of, or terminates a business line. Financial liabilities are never reclassified. The Company did not reclassify any of its financial assets or liabilities in the year ended 31 March 2023 and 31 March 2022.

3.5 Derecognition of financial assets and liabilities

i| Financial assets

A. Derecognition of financial assets due to substantial modification of terms and conditions

The Company derecognises a financial asset, such as a loan to a customer, when the terms and conditions have been renegotiated to the extent that, substantially, it becomes a new loan, with the difference recognised as a derecognition gain or loss, to the extent that an impairment loss has not already been recorded. The newly recognised loans are classified as Stage 1 for ECL measurement purposes

B. Derecognition of financial assets other than due to substantial modification

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the contractual rights to the cash flows from the financial asset expires or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in the statement of profit and loss.

ii| Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in the statement of profit and loss.

3.6 Impairment of financial assets A. Overview of ECL principles

I n accordance with Ind AS 109, the Company uses ECL model, for evaluating impairment of financial assets other than those measured at FVTPL. Expected credit losses are measured through a loss allowance at an amount equal to:

i) The 12-months expected credit losses (expected credit losses that result from those default events on the financial Instrument that are possible within 12 months after the reporting date); or

ii) Full lifetime expected credit losses (''LTECL'') (expected credit losses that result from all possible default events over the life of the financial instrument)

Both LTECLs and 12 months ECLs are calculated on collective basis

Based on the above, the Company categorizes its loans into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: When loans are first recognised, the Company recognises an allowance based on 12 months ECL. Stage 1 loans includes those loans where there is no significant credit risk observed and also includes facilities where the credit risk has been improved and the loan has been reclassified from stage 2 or stage 3

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the life time ECL. Stage 2 loans also includes facilities where the credit risk has improved and the loan has been reclassified from stage 3.

Stage 3: Loans considered credit impaired are the loans which are past due for more than 90 days. The Company records an allowance for life time ECL.

B. Calculation of ECLs

The mechanics of ECL calculations are outlined below and the key elements are, as follows:

PD: Probability of Default (''PD'') is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio. For investments and balances with banks, the Company uses external ratings for determining the PD of respective instruments.

EAD: Exposure at Default (''EAD'') is an estimate of the amount outstanding when the borrower defaults. lt is the total amount of an asset the entity is exposed to at the time of default. It is defined based on characteristics of the asset.

LGD: Loss Given Default (''LGD'') is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the tender would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD.

The Company has calculated PD, EAD and LGD to determine impairment loss on the portfolio of loans. At every reporting date, the above calculated PDs, EAD and LGDs are reviewed and changes in the forward looking estimates are analysed. The mechanics of the ECL method are summarised below:

Stage 1: The 12 months ECL is calculated as the portion of LTECLs that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date. The Company calculates the 12 months ECL allowance based on the expectation of a default occurring in the 12 months following the reporting date. These expected 12-months default probabilities are applied to a EAD and multiplied by the expected LGD.

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the LTECLs. The mechanics are similar to those explained above, but PDs and LGDs are estimated over the lifetime of the instrument.

Stage 3: For loans considered credit-impaired, the Company recognises the lifetime expected credit losses for these loans. The method is similar to that for stage 2 assets, with the PD set at 100%.

3.7 Write-offs

Financial assets are written off when there are no prospects of recovery which are subject to management decision. If the amount to be written off is greater than the accumulated loss allowance, the difference is first treated as an addition to the allowance that is then applied against the gross carrying amount. Any recoveries made from written off assets are netted off against the

amount of financial assets written off during the year under Bad debts and write offs forming part of Impairment on financial instruments in Statement of profit and loss.

3.8 Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company has taken into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

3.9 I] Recognition of other expense

A. Borrowing costs

Borrowing costs are the interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are charged to the statement of profit and loss for the period for which they are incurred.

3.10 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.11 Property, plant and equipment

Property, plant and equipment (''PPE'') are carried at cost, less accumulated depreciation and impairment losses, if any. The cost of PPE comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use and other incidental expenses. Subsequent expenditure on PPE after its purchase is capitalized only if it is probable that the future economic benefits will flow to the enterprise and the cost of the item can be measured reliably.

Depreciation is calculated using the straight line method to write down the cost of property and equipment to their residual values over their estimated useful lives as specified under schedule II of the Act. Land is not depreciated.

The estimated useful lives are, as follows: i) Building - 60 years

ii) Office equipment - 5 years

iii) Computers - 3 years

iv) Furniture and electrical fittings - 10 years

v) Vehicles - 8 years

vi) Printers - 5 years

vii) Server - 6 years

viii) Generator-10 years

ix) Plant and Machinery -15 Years

Depreciation is provided on a pro-rata basis from the date on which such asset is ready for its intended use.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

PPE is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the asset is derecognised.

3.12 Intangible assets

The Company''s intangible assets include the value of software. An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to, will flow to the Company.

I ntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method, and is included in depreciation and amortisation in the statement of profit and loss.

3.13 Impairment of non financial assets - property, plant and equipments and intangible assets

The carrying values of assets / cash generating units at the each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and if the carrying amount of these assets exceeds their recoverable amount, impairment loss is recognised in the statement of profit and loss as an expense, for such excess amount. The recoverable amount is the greater of the net selling price and value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is

indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss.

3.14 Leases

The Company as a lessee, recognises the right-of-use asset and lease liability at the lease commencement date. Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, Less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, or a change in the estimate of the amount expected to be payable under a residual value guarantee, or a change in the assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation /impairment losses.

The right-of-use assets are depreciated from the date of commencement of the lease on a straightline basis over the shorter of the lease term and the useful life of the underlying asset. Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made.

Lease payments associated with following leases are recognised as expense on straight-line basis:

Low value leases; and

Leases which are short-term.

3.15 Defined benefit plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation / retirement. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.

The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.

As per Ind AS 19, the service cost and the net interest cost are charged to the statement of profit and loss. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI.

Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as shortterm employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

3.16 Provisions, contingent liabilities and contingent assets

A. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When the effect of the time value of money is material, the Company determines the level of provision by discounting the expected cash flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

B. Contingent liability

A possible obligation that arises from past events and 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; present obligation that arises from past events where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability are disclosed as contingent liability and not provided for.

C. Contingent asset

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are neither recognised not disclosed in the financial statements.

3.17 Taxes

A. Current Tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities. Current tax is the amount of tax payable on the taxable income for the period as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

Current income tax relating to items recognised outside profit or toss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or equity.

B. Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax taws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

A deferred tax asset is recognised for the carry forward of unused tax losses and accumulated depreciation to the extent that it is probable that future taxable profit will be available against which the unused tax losses and accumulated depreciation can be utilised.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity]. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or equity.

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.

C. Goods and services tax paid on acquisition of assets or on incurring expenses

Expenses and assets are recognised net of the goods and services tax paid, except when the tax incurred on a purchase of assets or availing of services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.

3.18 Earnings per share

Basic earnings per share (EPS) is computed by dividing the profit after tax (i.e. profit attributable to ordinary equity holders) by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the profit after tax (i.e. profit attributable to ordinary equity holders) as adjusted for after-tax amount of dividends and interest recognised in the period in respect of the dilutive potential ordinary shares and is adjusted for any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares, by the weighted average number of equity shares considered for deriving basic earnings per share as increased by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. 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. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits, right issue and bonus shares, as appropriate.

3.19 Dividends on ordinary shares

The Company recognises a liability to make cash or noncash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Act, final dividend is authorised when it is approved by the shareholders and interim dividend is authorised when the it is approved by the Board of Directors of the Company. A corresponding amount is recognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value remeasurement recognised directly in equity.

Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.

3.2 Cash flows are reported using the indirect method as prescribed under Ind AS 7, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,

investing and financing activities of the Company are segregated based on the available information.

3.20 Recognisation of Expenditure

i) Finance Cost : Borrowing Cost on financial liabilities are recognised using the EIR.

ii) Impairment of financial instrument : Impairment of Financials instrument are recognised based on ECL model (refer note3.6 and 3.7)

iii) Employee benefit expenses: Expenses are recognised on accrual basis.

iv) Depreciation and amortisation expenses: Expenses are booked as per Companies Act 2013

v) Other Expenses: Expenses are recognised on accrual basis net of goods and service tax, except where the credit of the input tax is not statutorily permitted

4. Standards (including amendments) issued but not yet effective

Ministry of Corporate Affairs ("MCA") has not notified any new or amendments in existing Ind AS which would be applicable with effect from April 1, 2023, other relavent notification, disclosure issued where applicable disclosed correctly

5. The Company have prepared the Financial Statement as per Ind AS.