X. Contingent liabilities and provisions
Contingent liabilities are disclosed after evaluation of the facts and legal aspects of the matter involved, in line with theprovisions of Ind AS 37. The Company records a liability for any claims where a potential loss probable and capable ofbeing estimated and discloses such matters in its financial statements, if material. For potential losses that are consideredpossible, but not probable, the Company provides disclosures in the financial statements but does not record a liability inits 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 itis 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 thepresent 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-linebasis over the lease term unless another systematic basis is more representative of the time pattern of the Company'sbenefit. Where the rentals are structured solely to increase in line with expected general inflation to compensate for thelessor'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 thatare necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of thoseassets, until such time as the assets are substantially ready for their intended use of sale. All other borrowing costs arerecognised 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 equityshareholders by the weighted average number of equity shares outstanding during the year. The number of shares used incomputing 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 alldilutive potential equity shares. Potential dilutive equity shares are deemed to be converted as at the beginning of theperiod, unless they have been issued at a later date. The number of equity shares and potentially dilutive equity sharesare 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 thetaxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted orsubstantively enacted, at the reporting date. Current income tax relating to items recognised outside profit or lossis recognised outside profit or loss i.e. in other comprehensive income. Management periodically evaluates positionstaken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation andestablishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form ofadjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company willpay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable thatfuture 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 carryingamounts at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantivelyenacted as at the reporting date. Deferred tax assets and liabilities are offset if such items relate to taxes on income leviedby 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 longerprobable 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 hasbecome 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 transactionbetween market participants at the measurement date. The fair value measurement is based on the presumption that thetransaction to sell the asset or transfer the liability takes place in the accessible principal market or the most advantageousaccessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data isavailable to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservableinputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within thefair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair valuemeasurement as a whole.
For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determineswhether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest levelinput 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 requiresthe 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 underlyingassumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in whichestimates are revised if the revision affects only that period or in the period of the revision and future periods if the revisionaffects both current and future periods. The following are the key assumptions concerning the future, and other sources ofestimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustmentto 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 termemployee benefit plans are determined using actuarial valuations. An actuarial valuation involves making variousassumptions 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, adefined benefit obligation is highly sensitive in these assumptions. All assumptions are reviewed by the company at eachreporting date. The parameters must subject to change in the discount rate. The management considers the interest rateof 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 amountand timing of future taxable income. The company establishes provision, based on reasonable estimates. The amount ofsuch 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 therespective domicile of the company. In assessing the recoverability of deferred tax assets, management considerswhether it is probable that taxable profit will be available against which the losses can be utilised. The ultimate realisationof deferred tax assets is dependent upon the generation of future taxable income during the periods in which thetemporary 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 May1998 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 dulyincorporated 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 Company’s business activity falls within single primary/secondary business segment viz., business of loans and Advances & all relatedservices in all areas of information technology in India. The disclosure requirement of Indian Accounting Standard (AS) - 108 “OperatingSegments” 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 theshort- 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 transactionbetween 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 aquantitatives 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 carryingamounts 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 unobservableand consists of the following three levels:
Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
NOTE : 35 Financial Risk Management:
The Company’s principal financial liabilities, comprise Current Tax Liabilities. The main purpose of these financial liabilities is limited tomaintained the Company's operations. The Company’s principal financial assets includes Investments,loans, Cash and cash equivalents andCurrent Tax Assets.
The Company is exposed to credit risk and Liquidity risk. The Company's Senior management oversees the management of these risks. TheComaopny's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured andmanaged 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 contractualobligations, and arises principally from the Company’s loans and advances to customers. For risk management reporting purposes, the Companyconsiders 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 ‘three-stage’ 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 ‘ Stage 1 ’ and has its credit risk continuously monitoredby the Company.
2. If a significant increase in credit risk (‘SICR’) since initial recognition is identified, the financial instrument is moved to ‘Stage 2’ but is notyet deemed to be credit-impaired.
3. If the financial instrument is credit-impaired, the financial instrument is then moved to ‘Stage 3’.
Financial instruments in Stage 1 have their ECL measured at an amount equal to the portion of lifetime expected credit losses that result fromdefault events possible within the next 12 months. Instruments in Stages 2 or 3 have their ECL measured based on expected credit losses on alifetime 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 followingquantitative, 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 daysQualitative 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 ormore of the following 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 borrower’s financial difficulty It is becoming probable that the borrower will enterbankruptcy
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 incredit risk has occurred since initial recognition or whether an asset is considered to be creditimpaired. Expected credit losses are the discountedproduct 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 “Definition of default and credit-impaired” 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 client’s 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.Forstage 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 Group’s 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 thetime 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 thedefault occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remainingexpected 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 orcollective segment. These three components are multiplied together and adjusted for the likelihood of survival (i.e. the exposure has not prepaidor defaulted in an earlier month). This effectively calculates an ECL for each three buckets, which is then discounted back to the reporting dateand 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 aportfolio from the point of initial recognition throughout the lifetime of the loans. The maturity profile is based on historical observed data and isassumed 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 committedfacilities. This is based on the contractual repayments owed by the borrower over a 12month or lifetime basis. This will also be adjusted for anyexpected 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 assumptionsmade 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 “step up” 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 tomodels;
(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 distressedloans, with a view to maximising recovery.
Such restructuring activities include extended payment term arrangements, payment holidays and payment forgiveness. Restructuring policiesand practices are based on indicators or criteria which, in the judgement of management, indicate that payment will most likely continue. Thesepolicies 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 initialrecognition, when the modification is not substantial and so does not result in derecognition of the original asset. The Company monitors thesubsequent performance of modified assets. The Company may determine that the credit risk has significantly improved after restructuring, sothat 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 haveperformed 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 itsliquidity 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 orshareholder'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-Deposittaking Company (Reserve Bank) Directions, 2016, has been annexed to Balance Sheet as Annex 1.
NOTE : 37 CAPITAL MANAGEMENT:
The company’s 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 provisionrequired 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 theRBI 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 onapplicable 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, determinedconsidering 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 leaseagreements 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 thecompanies 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 onnumber 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) toany opther person's or entities including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) thatthe intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of thecompany (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries;The company hasnor received any fund from any person's or entities including foreign entities (Funding Party) with the understanding (whether recorded indirectly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (UltimateBeneficiaries) 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 at31st March, 2024. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 hasbeen 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
AUDITOR’S REPORT
AS PER OUR REPORT OF EVEN DATE ANNEXEDFOR M/s T.K. GUPTA & ASSOCIATESCHARTERED ACCOUNTANTSFIRM REGN NO. 011604N
PLACE : NEW DELHIDated:21/05/2025
CA. T.K. GUPTA (PARTNER)
M.NO. 82235